MarketsCap Review: Is this Broker Safe?

| Publish date: 12/09/2019 (Last updated: December 25, 2019 11:22 AM)
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Stop! It’s a Scam! Your money is not safe if you are trading with this unregulated, off-shore broker.

MarketsCap - DO NOT TRADE WITH THIS PROVIDER
1.7/10
$100
Minimum Deposit
X

updated 2020

MarketsCap is a Forex brokerage that is based in St. Vincent and the Grenadines. The trader, despite being a Forex broker, focuses more on cryptocurrency trading. It provides a web-based trading platform and a wide variety of trading products.

Because of its focus on cryptocurrencies, inexperienced traders could actually mistake this brokerage for a cryptocurrency exchange. However, there are basic differences between a broker that offers trading in cryptocurrencies via CFDs vis-à-vis cryptocurrency exchanges.

 

Try these regulated brokers if you want to start trading cryptocurrencies

AvaTrade - Regulated broker
Trade with an award-winning broker

The company was created as a combined effort of financial professionals and experts in web-commerce with the goal of perfecting the online experience for retail traders.

  • Website URL: https://www.marketscap.com/
  • Founded: 2019
  • Regulations: No
  • Languages: English, German, Portuguese and Arabic
  • Deposit Methods: Visa, MasterCard, American Express, Skrill
  • Free Demo Account: Yes
  • of Assets: N/A
  • Types of Assets: CFDs on major cryptocurrencies, CFDs on commodities, indices as well as stocks against BTC (Bitcoin)

Overview

MarketsCap is a Forex brokerage that is based in St. Vincent and the Grenadines. The trader, despite being a Forex broker, focuses more on cryptocurrency trading. It provides a web-based trading platform and a wide variety of trading products.

Because of its focus on cryptocurrencies, inexperienced traders could actually mistake this brokerage for a cryptocurrency exchange. However, there are basic differences between a broker that offers trading in cryptocurrencies via CFDs vis-à-vis cryptocurrency exchanges.

In CFDs (Contracts for Difference), traders bet on prices, while in exchanges you own the assets that you trade.

Leverage is low at just 1:50, and the spread offered on the most popular trading pair – the BTC/USD – is just $52, which is not favorable for traders.

Account Types

MarketsCap offers 4 types of trading accounts: Lite Account, Standard Account, Premium Account and VIP Super Account. Leverage is capped at 1:50 for the Lite, at 1:100 for the Standard, at 1:300 for the Premium and at 1:500 for the VIP account.

No information is given on the website with regard to minimum deposit requires for each of the account types. There are also no details about the spread on each of these accounts.

MarketsCap: Advantages

Range of Trading Instruments

MarketsCap offers a very comprehensive range of trading instruments. The broker offers CFDs on all the major cryptocurrencies – Bitcoin, Ethereum, Ripple, Bitcoin Cash, Ripple, EOS, Tether, Binance Coin, Stellar, Binance Coin, TRON, Bitcoin SV, UNUS SED LEO, Monero, Zcash, NEO, Qtum, IOTA, Bitcoin Gold, Dash, Chainlink and Cosmos.

Besides CFDs on cryptocurrency pairs, MarketsCap also offers CFDs on commodities, stocks and indices against Bitcoin.

Good Leverage Levels

For the VIP Super Account, the maximum leverage is 1:500, which is much higher than the industry standard. Even the Premium account has a very generous leverage of 1:300.

However, it must be kept in mind that the new regulations introduced by ESMA (European Securities and Markets Authority) in the EU in 2018 have capped leverage in regulated brokerages to just 1:30 for retail traders. Other regulators in Canada, the US, as well as Japan have also imposed similar limits. At this time, it is only in Australia that brokers are allowed to offer almost unlimited leverage to their clientele.

Therefore, having such high leverage may actually be a negative for brokers is most markets today.

MarketsCap: Disadvantages

Lack of Regulation

The biggest issue with MarketsCap is its lack of regulation. The company that owns and operates MarketsCap is Optima Express Inc., which is based in St. Vincent and the Grenadines. There is no mention of any kind of regulatory oversight or licenses to operate in the website’s terms and conditions – or anywhere else on the website, for that matter.

And since SVG is known for its rather lax regulatory standards, it is logical to conclude that MarketsCap is an unregulated online broker. This brokerage does not have the required licenses to operate in the US, the European Union, Canada, Japan and Australia. This means that all operations in any one of these countries are illegal.

Demo Account, Trading Conditions & Safety of Funds

MarketsCap does offer a demo account, through which traders can assess the trading conditions offered by the broker. While this is a plus, the conditions offered are not very advantageous to clients.

The BTC/USD trading pair offers a spread of $52, which is much higher than the industry average, and does not favor traders. There is also no clarity with regard to the minimum require deposit on this online brokerage.

When you consider that MarketsCap is unregulated, such a high spread and lack of clarity on minimum deposits indicates that investor funds may be at risk.

There is also no clarity whether traders’ accounts are separate from the broker’s, which raises another concern about the safety of users’ funds. Regulated brokers are subject to strict rules with regard to the safety of their clients’ funds.

Commingling of brokers’ and their clients’ funds is strictly forbidden. Added to that, many regulators also insist that traders should be insured and be compensated if they suffer losses because a broker has gone bankrupt or has committed fraud.

So, without the safety net of regulations, MarketsCap becomes an undesirable online broker to invest with.

Use of Robo-Scam Websites to Attract Customers

This is huge cause for concern. It has been revealed that MarketsCap is using robo-scam websites to get more customers to use its brokerage. MarketsCap seems to have partnered with Global Crypto App, an anonymous robo-scam website, which is now registering new customers for the broker in return for a commission.

Robo-scam websites are being used by scammers to lure unsuspecting customers by promising them huge and unrealistic returns on their investments.

No Support for MetaTrader 4

MarketsCap offers its clientele a web-based trading interface, and does not have any support for the MetaTrader 4 platform. This is a big disadvantage since the MT4 platform is now considered the industry norm for trading online.

The MT 4 platform is easy to use, offers a wide range of charting tools, market indicators and automated trading bots called Expert Advisors to help with trading.

Skrill Logo Present, But Not Available

Despite the fact that MarketsCap has displayed the Skrill logo on its website, the broker does not offer it as a payment option. The only payment options that are actually available are Visa, MasterCard, BTC and ETH.

Conclusion

It would be advisable that you not trade on MarketsCap. There are too many red flags that indicate that this is a high-risk online broker and your money may not be safe with them. A lack of regulatory oversight, as well as the use of robo-scam websites, indicate that this could be a scam site.

MarketsCap

1.7

User Experience

3.7/10

Payment Options

1.2/10

Security

1.3/10

Support

1.0/10

Reputation

1.2/10

Pros

  • Wide Range of Trading Instruments
  • Supports MT5
  • Minimum Deposit Requirements on Par with Industry Average
  • Account can be opened in any one of 4 different currencies

Cons

  • Not registered, licensed or regulated despite operating in the EU
  • Strange Withdrawal Conditions that are not fair to traders
  • Skrill not available as a payment option
  • No Demo Account

Do not trade with unregulated brokers that will steal your funds - try these regulated brokers:

AvaTrade
$100
Minimum Deposit

The company was created as a combined effort of financial professionals and experts in web-commerce with the goal of perfecting the online experience for retail traders.

Plus500
$100
Minimum Deposit

76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money

eToro
$200
Minimum Deposit

eToro is a multi-asset platform which offers CFD and non CFD products. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

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