Navigating Prop Firms with Crypto Challenges: A Complete Guide for Aspiring Traders
If you’ve ever wondered how traders access significant capital to trade Bitcoin, Ethereum, and other crypto markets without risking their savings, you’re in the right place. Prop firms with crypto challenges provide a way to prove your trading edge and earn a funded account. In this guide, I’ll break down how these challenges work, the best prop firms for traders, and effective strategies to achieve success.
I vividly remember my first crypto challenge: two phases, a 10% target in Phase 1, a 5% target in Phase 2, and strict drawdown limits. I hit my target on the ninth day, thanks to significant adjustments such as reducing overtrading, cutting my risk, and avoiding the typical Sunday evening spread blowouts. These lessons can save you substantial frustration on your trading journey.
Introduction
Proprietary trading firms, or prop firms, fund traders who can demonstrate discipline, skill, and consistency. Traders utilize the firm’s capital while keeping a large share of profits while adhering to specific risk rules. For many, this represents the fastest route to scalable trading.
Cryptocurrency has transformed the prop trading landscape. With 24/7 markets, high volatility, and growing institutional adoption, crypto is now a critical category at many firms. This article aims to help you navigate prop firms with crypto challenges, from selecting the right firm to executing a robust plan that boosts your chances of success.
What are Prop Firms?
A prop firm is a company that backs traders with its capital. Instead of depositing personal funds, traders pass an evaluation known as the “challenge” and then trade a funded account following the firm’s rules. Learn more about what is a prop trading firm to get started.
The business model is straightforward: firms charge a fee for the evaluation and retain a share of profits from successful traders. In exchange, traders gain access to capital, trading platforms, risk parameters, and sometimes coaching or analytics tools.
This model contrasts with traditional broker trading, where the firm assumes the financial risk. Your primary responsibilities include adhering to rules, hitting targets, and managing risk. If you perform well consistently, your account will scale; if you violate the established rules, the account may be challenged or closed.
The Rise of Cryptocurrency in Prop Trading
Over the past decade, crypto has transitioned from niche investment to mainstream investment vehicle. Major milestones include Bitcoin futures launching on the CME in 2017 and the explosion of crypto derivatives on offshore exchanges. By 2024, spot Bitcoin and ETH ETFs were approved in the U.S., resulting in significant institutional liquidity alongside retail interest source here.
With this growth, most CFD-style prop firms began incorporating crypto symbols, and futures prop firms offered CME contracts for Bitcoin and Ethereum. This expansion created more opportunities for traders, especially regarding the unique trading dynamics of weekend markets and volatility.
The benefits of trading crypto are evident: its volatility can compress timelines; targets that may take weeks in traditional markets can often be achieved in days. In addition, crypto diversifies trading strategies, as BTC and ETH often trend differently than major FX or stock indices. For prop firms, crypto expands their offering, attracting active traders keen on round-the-clock markets. For insight on digital assets, see our list of best prop firms for digital asset trading in crypto.
Understanding Crypto Challenges in Prop Firms
What is a Crypto Challenge?
A crypto challenge is a structured evaluation to determine whether you can trade cryptocurrencies profitably while adhering to specific risk guidelines. It's akin to traditional challenges in FX or indices but tailored to accommodate the unique structure and hours of the crypto market.
This evaluation serves two main objectives: firstly, to verify that you can reach a profit target without breaching daily or overall drawdown limits; secondly, to confirm that you can accomplish this sustainably, typically requiring a minimum number of trading days and position management.
Compared to conventional challenges, crypto challenges introduce unique variables: pricing over weekends, wider spreads during periods of low liquidity, and the effects of exchange-related events. Some firms implement 24/7 trading rules that are either more permissive or restrictive depending on their policies.
How Do Crypto Challenges Work?
Most firms employ a one- or two-phase evaluation structure:
Phase 1: Targets typically range from 8–10% with a maximum overall and daily loss of 8–10%.
Phase 2: Generally sees a smaller target (around 4–5%) with similar or more lenient risk parameters.
One-phase models bypass Phase 2 but may impose tighter rules or charge higher fees.
Evaluation criteria usually include:
Profit Target: Achieve the target without exceeding daily or overall drawdown limits.
Risk Adherence: Avoid rule breaches such as holding positions through restricted news or exceeding specified lot sizes. See risk management rules you must follow.
Minimum Trading Days: Typically between 5–10 days per phase to discourage “one and done” luck-based trading.
Consistency: Some firms assess lot sizing consistency or may limit concentration of profits per trade.
Common evaluation formats include demo assessments that mimic live trading conditions, with successful candidates receiving a funded account and profit splits typically ranging from 75–90%. Some firms may process payouts quickly, while others require a specific profit threshold or waiting period.
Top Prop Firms Offering Crypto Challenges
Leading Firms in the Industry
Note: Always verify current rules and instruments on the firm’s official site, as policies can change.
FTMO
Highlights: As one of the earliest and most reputable prop firms, FTMO boasts a polished evaluation process and offers crypto CFDs alongside FX, indices, and commodities on multiple trading platforms. Read our full FTMO review.
Typical Structure: Two-phase challenge with a common 10% Phase 1 target and 5% Phase 2 target, including a maximum daily loss of 5% and an overall loss limit of 10%. Minimum trading days apply.
Payouts and Fees: Profits are typically split 80–90%. Fees vary by account size, usually running from a few hundred to around a thousand USD, with the initial fee refunded upon the first payout.
Crypto Specifics: Offers BTCUSD, ETHUSD, and occasional major altcoin CFDs. Weekend trading may be available but may involve wider spreads during off-hours.
The5ers
Highlights: Offers multiple tracks for evaluation and instant funding styles. Originally FX-focused, the availability of crypto can vary depending on account type. See our in-depth guide to The 5%ers.
Structure: Varies by program but generally includes profit targets, scaling plans, and risk limits centered on consistency and risk management.
Payouts and Fees: Competitive profit splits depend on the chosen track and account size. It’s best to confirm the availability of crypto before acquiring an account.
Crypto Specifics: Crypto availability differs; it’s essential to verify the instrument list and weekend policies.
SurgeTrader
Highlights: A one-phase model favored by traders seeking a more straightforward, expedited approach. Crypto pairs are typically offered via CFDs.
Structure: Features a single profit target with strict drawdown regulations; some plans have no minimum trading days.
Payouts and Fees: Generally, 75–90% profit splits based on account features, with fees scaling according to account size.
Crypto Specifics: Provides major crypto pairs with 24/5 to 24/7 access, depending on broker liquidity.
FundedNext
Highlights: Known for aggressive marketing and frequent promotions, FundedNext offers crypto CFDs through two-phase and express tracks. Check out the FundedNext Stellar Challenge.
Structure: Generally follows a typical target of 10% and 5%, adhering to industry-standard daily and overall drawdowns.
Payouts and Fees: Up to 90% profit splits are common; it’s important to review the firm's consistency rules and payout timelines.
Crypto Specifics: Includes BTC, ETH, and selected altcoins based on the platform's offerings.
Topstep (Futures)
Highlights: Futures-focused, esteemed for its educational resources and risk discipline. Allows trading of CME Bitcoin and Ether futures across multiple account configurations. See our list of top 7 futures prop firms.
Structure: Evaluation entails meeting profit objectives in conjunction with rules pertaining to maximum position size and trailing drawdowns.
Payouts and Fees: Works on a subscription-based evaluation model that includes scaling options, with frequent payouts post-funding.
Crypto Specifics: Offers both full-size and micro futures contracts for BTC and ETH when available.
Apex Trader Funding (Futures)
Highlights: Popular among futures traders, known for frequent discounts and numerous account options. Learn about Apex features and benefits.
Structure: Evaluation utilizes trailing drawdowns; criteria and rules vary according to account size.
Payouts and Fees: Operates on a subscription model with competitive profit splits. Be sure to review withdrawal schedules and consistency standards.
Crypto Specifics: Offers CME futures for cryptos across various setups and supported platforms.
Unique Features to Compare
Fees: Range from approximately $100 to $1,200+ based on account size and the chosen evaluation phase. Consider the cheapest prop firm challenges if budget is tight.
Profit Split: Typically between 75-90%, with some firms offering scaling to over 90%. See top prop firms with best profit splits.
Payout Cadence: Weekly, biweekly, or monthly; crypto-friendly firms often have faster processing.
Rules: Considerations for news trading, weekend holdings, consistency requirements, and maximum lot rules.
Platforms: May include MT4/MT5, cTrader, TradingView integrations, or proprietary platforms.
Instruments: Verify the availability of altcoins beyond BTC and ETH. Check out the top cryptocurrencies to watch in 2025.
Global Perspective
Regional regulations influence what prop firms can offer:
United States: CFD trading isn’t permitted for U.S. residents, leading many firms focused on U.S. traders to emphasize futures rather than offering CFDs directly source here.
European Union/UK: Retail clients face leverage caps and marketing regulations that indirectly impact firm evaluations, with some restrictions on high-volatility crypto assets source here.
Asia-Pacific and MENA: Access varies significantly, with certain regions permitting broader CFD access while others impose restrictions on crypto derivatives.
Traders should always align their residency with the firm’s legal regulations, thoroughly examining the terms as some firms permit you to take the challenge but restrict instrument access or payout methods based on geographic location.
Success Strategies for Crypto Challenges
Essential Skills and Knowledge
Volatility Management: Crypto can experience large Average True Range (ATR) fluctuations. Position sizing must be adjusted to this volatility to avoid breaching daily loss limits quickly. See how risk rules can kill your funded account.
Technical Analysis Proficiency: Understanding support, resistance, trend structures, VWAP, and volume profiles can be incredibly powerful in the crypto space, where breakouts and fakeouts occur frequently.
Risk Management: Daily loss caps require strict risk management; typically, traders risk 0.25–0.75% of their account per trade, with many opting for a maximum of 0.5% for crypto challenges.Learn about developing a risk management framework.
Market Structure Literacy: Familiarize yourself with CME futures session windows, CFD rollover, and differences concerning weekend liquidity. While crypto trades continuously, broker CFD pricing can vary on weekends.
Execution Discipline: Be aware that slippage can spike during news events or periods of low liquidity. Employing limit orders and waiting for spreads to normalize can improve execution quality.
Preparing for a Crypto Challenge
Here’s a practical step-by-step preparation plan you can follow:
Choose Your Instrument Universe: Start with BTC and ETH, then add altcoins later if offered and if you have a proven edge.
Define Your Risk Model: Establish your maximum daily loss (e.g., 3%) and risk per trade (e.g., 0.5%). Limit yourself to 3–5 trades per day to avoid excessive churn.
Build Your Playbook: Identify 2–3 setups, such as NY session breakouts or VWAP reversion during Asia sessions, and precisely document entry and exit criteria.
Backtest: Conduct thorough backtesting over 3 to 6 months. Even a simple manual test across 80–100 trades can reveal expectancy, win rates, and average returns per trade. Aim for at least a 1.3–1.6 R ratio on average.
Forward-Test on Demo: Simulate live market conditions for two weeks, maintaining rigorous journaling to track slippage, fill quality, and emotional triggers.
Train Execution Windows: Crypto liquidity isn't uniform throughout the day. Focus on trading during high-liquidity periods, like from 13:00–17:00 UTC (U.S. morning) and 18:00–22:00 UTC (U.S. afternoon) for BTC and ETH.
Create a Daily Routine: Establish a pre-market plan that includes key levels and scenarios, followed by a post-market review encompassing screenshots and metrics.
Read Your Firm’s Rulebook Thoroughly: Familiarize yourself with restrictions regarding news, weekend holdings, maximum lot sizes or consistency rules, and payout requirements.
Resources and Tools I Recommend
Charting: Utilize TradingView for charting and creating alerts.
Tracking: Employ a trading journal such as Notion or Edgewonk for metrics, including win rates and maximum adverse excursions.
Volatility Management Tools: Incorporate volatility indicators like ATR and session indicators into your analysis.
Data Resources: Leverage on-chain or derivatives data (if applicable), focusing on funding rates, open interest, and liquidation heat maps, treating them as supplementary confluence rather than primary triggers.
Risk Calculator: Use a risk calculator spreadsheet to translate stops into position sizes quickly.
Strategies to Succeed
Volatility-Scaled Sizing: Scale your position sizes by ATR. For instance, risk 0.5% on BTC, with your stop set at 1.2x the 30-minute ATR; calculate position size accordingly to ensure a stop-out equates to a 0.5% loss.
Session Breakouts with Confirmation: Identify and plot the Asia high/low. Trade the first clean break only during the U.S. session if the retest holds and spreads are rational. If the first breakout fails, avoid the second attempt.
VWAP Pullback in Trend: In a strong BTC trend, aim for the first pullback to VWAP showing a bullish rejection wick; target ratios between 1.5 and 2.0 R. Take partial profits at 1 R and move stops to breakeven after hitting the target.
News-Filtered Trading: Refrain from opening positions within 10–15 minutes surrounding major macroeconomic events (like FOMC or CPI) unless your strategy is specifically designed for these circumstances. Crypto can exhibit high volatility around these instances.
Exercise Caution with Weekend Trading: If your firm permits it, approach weekend trading as a separate session. Widen stops, decrease position sizes, or even opt out altogether, as liquidity can be low and spreads tend to widen.
Common Pitfalls to Avoid
Martingale or Revenge Trading: Trying to recoup losses through increased risk can lead to account blowouts. Take a break if losing streaks occur; reflect and reset your mind.
Ignoring the Impact of Spreads/Commission: Trades with targets of just 0.5 R may be heavily impacted by fees and slippage. Strive for a minimum trade target of 1.2–2.0 R to ensure profitability.
Excessive Trading: The frantic pace of cryptocurrency can be misleading. Filter your trades diligently; if the edge isn't clear, opting to remain flat can be wiser.
Altcoin Traps: Thinly traded alts can lead to slippage beyond stop limits. Stick with BTC and ETH during the evaluation stage. For risk context, read risks and rewards of shorting cryptocurrencies.
Risk Management Techniques Specific to Crypto
Daily Drawdown Buffer: If your limit is 5% daily, cap your intended loss at 3% to account for slippage.
Cooldown Rule: After two consecutive losses or a -1% day loss, allow yourself a 30-minute break to regroup, which can save your account.
Event Calendar: Keep track of ETF flows, large unlocks, exchange maintenance periods, and network upgrades, treating these events similarly to macro news in FX.
Case Studies and Success Stories
The following case studies illustrate various trader paths using different strategies, highlighting what led to their successes.
Case Study 1: The Risk Cutter
Background: A former FX day trader transitioning to BTC/ETH initially failed Phase 1 due to oversized positions.
Adjustment: Reduced risk per trade from 1% to 0.4% and limited trades to two specific time windows: 13:00–16:00 UTC and 19:00–21:00 UTC.
Result: Passed Phase 1 in 11 days with 8 trades and a maximum drawdown of 2.6%. Phase 2 was completed in just 7 days by focusing solely on VWAP pullbacks.
Lesson: Position sizing and selecting optimal trading times significantly outweigh the quantity of trades.
Case Study 2: The Breakout Specialist
Background: An equity trader adept in breakout patterns entered crypto with no previous experience.
Strategy: Focused on Asia range breakouts followed by confirmation during U.S. sessions. Incorporated a rule to avoid trades if spreads exceeded twice the normal level.
Result: Achieved the Phase 1 target in 9 days; a -2.4% session loss prompted a necessary cooldown. Phase 2 took 12 trading days, boasting a win rate of 62% and an average of 1.4 R per trade.
Lesson: Confirmation with retests and employing spread filters are critical for avoiding poor fills.
Case Study 3: The Swing Planner
Background: Part-time trader who leans toward 4-hour setups and wider stops.
Approach: Limited to multi-day BTC trend trades only, taking partial profits at 1 R and 2 R, holding the remainder with a trailing stop if weekend trading was allowed.
Result: Began slowly, but effectively accounted for minimum trading days and avoided overtrading during weekdays. Passed both phases in 5 weeks with only 12 trades overall.
Lesson: Swing trading can succeed if managed carefully concerning weekend risks and rollover concerns.
Case Study 4: My “Nine-Day” Challenge
Key Changes: I previously chased almost every market move but committed to two setups—NY session breakouts and VWAP reversions—during my first crypto challenge.
Turning Point: Experienced a -1.6% drop on day 4 due to slippage surrounding a CPI release. Subsequently, I abstained from trading for 30 minutes around significant macro news.
Outcome: Met the 10% target within 9 days, maintaining a 0.5% risk per trade, averaging 1.6 R per trade with a maximum daily drawdown of 1.8%. The refunded evaluation fee during my first payout felt rewarding for my discipline.
Challenges and Considerations in Crypto Trading
Common Challenges Faced by Traders
Volatility and Gaps: Weekend price discovery or thin book liquidity may lead to sizeable gaps in pricing. It's essential to recognize that even “24/7” crypto is not uniformly liquid.
Platform and Broker Nuances: Some brokers expose traders to wide spreads during maintenance or thin liquidity. Plan for wider stops during such periods or reconsider engagement.
Psychological Pressure: The constant nature of the 24/7 market can trigger FOMO. Setting strict trading hours, employing alerts, and prioritizing sleep can help manage decision fatigue. Check trading psychology for funded account challenges.
Security and Counterparty Risk: Although you don’t directly deposit on exchanges for prop CFD or futures, operational incidents such as exchange outages may affect execution quality. Consider diversifying platforms and familiarize yourself with your firm’s incident protocols.
Regulatory and Market Trends
Growing Institutionalization: Major markets have deepened liquidity with the introduction of spot BTC and ETH ETFs, resulting in crypto price action shifting along with broader macro flows. Expect to see an increase in “risk-on/risk-off” behavior in the market.
Futures Maturation: The growth of CME BTC and ETH volumes and open interest allows improved liquidity during U.S. hours. Futures prop traders can utilize cleaner market structures within regulated venues source here.
Prop Firm Scrutiny: Regulatory bodies have forced some prop firms to adjust their payouts, disclosures, and marketing materials. Anticipate more transparency requirements and clearer rulebooks moving forward source here.
Regional Divergence: Countries continue to adopt differing approaches toward crypto derivatives—some embrace it while others place restrictions on retail access. Firms may adapt their offerings by region or transition to futures-only models in select jurisdictions.
Frequently Asked Questions
Q: What are prop firms with crypto challenges?
Prop firms with crypto challenges are proprietary trading firms that allow traders to qualify for funded accounts by trading cryptocurrencies under established constraints. Traders pay an evaluation fee, meet profit targets while adhering to risk management rules, and get access to trade the firm's capital for profit sharing.
Q: How do crypto challenges in prop firms work?
Crypto challenges typically feature one- or two-phase evaluations where traders must reach a profit target while respecting daily and total drawdown limits. Requirements may also include minimum trading days, news trading restrictions, and consistency metrics defined by the firm. Read about what is a prop firm challenge.
Q: Which prop firms specialize in cryptocurrency?
Numerous leading prop firms offer crypto alongside other assets, including FTMO, SurgeTrader, and FundedNext for CFDs and Topstep and Apex Trader Funding for CME crypto futures. Availability and rules may differ across firms, so it's crucial to check each firm’s specific instrument list. See the top crypto prop firms to watch.
Q: What skills are tested in a crypto prop firm challenge?
Essential skills include technical analysis, risk management, execution discipline, and consistency. Traders must also manage the volatility associated with crypto markets and comprehend factors like spreads and slippage, as well as navigate weekend and low liquidity trading hours.
Q: Are there specific rules in crypto prop firm challenges?
Yes, common regulations encompass daily and overall drawdown limits, a minimum number of trading days, restrictions around trading during significant news events, and sometimes consistency requirements related to lot sizing or profit distribution.
Q: How are crypto challenges different from other trading challenges?
Crypto markets operate continuously, leading to potential wider spreads and heightened volatility. Compared to indices or FX trading challenges, traders must adhere to nuanced weekend policies and varying execution quality, necessitating enhanced control over trading situations.
Q: What is the payout structure for crypto prop firm challenges?
Typically, most firms offer a profit split of 75–90% once traders are funded. Payout frequency may range from weekly to monthly, with many firms automatically refunding the evaluation fee after the first payout. Learn about payouts in prop trading.
Q: How do I prepare for a crypto challenge in a prop firm?
To prepare effectively, create a playbook with a few setups, backtest strategies, conduct forward-tests in demo environments, set clear risk rules (e.g., 0.5% per trade, 3% daily cap), and engage in consistent trading hours. It’s also essential to thoroughly understand the firm’s rulebook.
Q: Can beginners enter crypto challenges at prop firms?
Yes, but it's advisable for newcomers to first practice with a demo account for several months, develop a robust strategy, and demonstrate consistent performance before investing in an evaluation. Check how to pass any prop firm challenge or review our beginners guide to prop firms.
Q: What is the success rate for passing crypto trading challenges?
Although exact pass rates are rarely disclosed by firms, they tend to be low. Successful traders exhibit strict adherence to risk rules, have a concentrated playbook, and maintain discipline in their trading hours and event-related risks.
Conclusion
Prop firms with crypto challenges present a compelling opportunity to scale your trading without risking your entire savings. The key to success lies in diligent preparation, which includes honing a limited array of setups, implementing volatility-aware sizing, and sticking to strict daily loss limits while respecting crypto's unique liquidity dynamics.
Select a reputable firm, verify their crypto offerings and regulations, and devise a trading plan you can execute consistently. For ongoing insights on strategies, firm changes, and current best practices in crypto trading, consider subscribing to our newsletter. With access to detailed breakdowns, checklists, and real-world case studies, you'll be well-equipped to tackle your next crypto challenge with confidence.
About The Author
Jordan Whitemore
Jordan is a fintech strategist with over a decade of experience helping startups launch and scale proprietary trading firms. With a background in financial law and trading technology, Jordan simplifies complex launch processes into actionable steps. His writing blends clarity with strategic insight, making him a go-to expert for aspiring prop firm founders.
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