Overview of Crypto Proprietary Trading Firms

crypto prop trading firms

What is a Crypto Proprietary Trading Firm?

A crypto proprietary trading firm offers crypto traders the chance to trade with a funded account. After completing a crypto trading challenge, traders can retain up to 90% of the profits. To receive a funded account, traders must successfully complete a trading challenge with a profit target of up to 15%.

How crypto prop trading firms works?

Crypto proprietary trading firms provide capital to crypto traders, and it’s important to distinguish between tier 1, tier 2, and tier 3 firms.

Tier 1: Real crypto proprietary trading firms engage in trading on the actual market with real liquidity. These firms typically do not offer remote capital provision; for instance, to trade for a crypto proprietary trading firm, you might need to work at a desk in London within an office environment. Tier 1 firms have their own trading strategies, often focusing on market making, algorithmic trading, or high-frequency trading (HFT). To be hired by such a firm, you need to possess genuine talent and skills. Although traders can receive a profit share, the percentage might be lower because they trade with significantly larger liquidity. These firms seek algorithmic traders and highly educated individuals with a mathematical background. Wintermute is among the most successful tier 1 crypto proprietary trading firms.

Tier 2: These firms target talented retail traders worldwide, allowing them to leverage trading skills remotely without needing to be in an office. Tier 2 firms offer simulated trading to evaluate traders and review their track records. Importantly, they allow traders to operate with real liquidity. These firms collect evaluation fees from unsuccessful traders and use these fees to fund successful traders. Currently, HyroTrader is considered the sole tier 2 crypto prop trading firm. To join, traders must complete a trading challenge aimed at achieving a 15% profit target over two stages, with no time limit. Initially, the first few payouts are conducted on a demo account, but traders are eligible for a profit split ranging from 70 to 90%. After passing this test period, traders can trade with real liquidity on the ByBit platform. HyroTrader’s goal is to identify profitable traders, establish relationships, and offer professional support and guidance for scaling crypto trading accounts.

Tier 3: These firms focus on inexperienced crypto traders, providing only simulated trading accounts without real capital. They often operate on CFD platforms characterized by wicks, high fees, swap fees, and unfavorable conditions for serious crypto traders. The trading challenges set by these firms are typically easier and less expensive, with profit targets of about 8-12%. The aim is not to pay traders in the long term but to collect evaluation fees, make a few payouts to successful traders, and then create conditions that disadvantage the trader. Traders might receive a payout or two but are likely to face bans or worsened trading conditions without clear reasons. These firms often operate on CFD platforms or have their own trading platforms, which they can manipulate. For retail traders, it can be difficult to identify such firms due to paid reviews and social media presence. Before signing up, always check the trading platform (CFD or proprietary platforms are red flags) and the challenge conditions (if it’s cheap or seems too easy, it might be a scam).

What Are the Best Crypto Proprietary Trading Firms?

In the crypto proprietary trading market, there are only a few genuine firms, so your options are limited. Wintermute stands out as the top firm for professional traders, but it requires working from their London office. HyroTrader is the premier choice for serious retail traders, offering the ability to trade remotely with the best market conditions. There are a few other crypto proprietary trading firms, but we lack experience with them, and in most cases, they require traders to work from the firm’s local office.

How Do Fake Crypto Proprietary Trading Firms Make Money?

Fake crypto proprietary trading firms profit from their traders. They do not offer real accounts, meaning they trade against their traders. When a trader passes the trading challenge and succeeds, the fake prop firm may process a few payouts and then impose restrictions on the trader for various reasons.

Common tactics used by these firms to disadvantage traders include:

  • Failing traders without a reason.
  • Increasing fees on the trading platform (if the firm operates its own platform, it can alter fees and conditions during trading).
  • Removing stop loss orders to fail successful traders.
  • Introducing trading spikes, latency issues, incorrect trading data, and other platform problems.

Thousands of successful traders have been scammed by these fraudulent prop trading firms.

How Does HyroTrader Earn Money?

HyroTrader, based in Prague, Czech Republic, near FTMO, a highly reputable forex prop trading company, has devised a new model for crypto traders. HyroTrader collects evaluation fees from traders who are unsuccessful in trading challenges and allocates this capital to talented crypto traders who have passed the trading challenge. This business model allows HyroTrader to profit when traders do, especially since the best traders are given real ByBit sub-accounts to trade with.

HyroTrader offers accounts on ByBit, a platform that cannot be manipulated, ensuring that your trades are executed under the best market conditions. With HyroTrader, you can be confident that your trading experience is secure and favorable.

HyroTrader is an excellent choice for talented traders looking for long-term growth and support. The company generates revenue through its own crypto trading strategies, evaluation fees from unsuccessful traders, profit shares with successful traders, and commissions from crypto trading platforms.

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