Core Insights - The forex and CFD industry was expected to thrive in 2025 due to geopolitical tensions, market volatility, and rising asset prices, but many brokers are facing significant challenges [3][10]. Group 1: Market Performance - Major brokers reported record trading volumes in 2025, with XTB achieving over $1 trillion in quarterly trading volume for the first time and Capital.com reaching $2.25 trillion in the first three quarters [4]. - CME's gold futures saw trading volumes surge by 223% and 175% for E-mini and Micro Gold contracts, respectively, indicating a high level of trading activity [5]. Group 2: Profitability Challenges - Despite high trading volumes, profitability is declining; for instance, XTB's profit per million dollars traded fell from $144 to $84 over three quarters [6][9]. - The industry is experiencing a paradox where increased trading volume does not translate to higher profits due to reduced market volatility and fewer trading opportunities [9][12]. Group 3: Impact of Gold Prices - Gold prices have risen over 70% in 2025, reaching a record high of $4549.80, which has created a challenging environment for brokers [10]. - Brokers are offering aggressive trading conditions on gold, leading to a situation where it behaves more like a "gamified asset" rather than a controlled financial product [11]. Group 4: Industry Dynamics - Some brokers are abandoning regulatory licenses and scaling back operations, indicating underlying stress in the industry [13][14]. - The ongoing rise in gold prices is testing the business models of brokers, particularly those relying heavily on B-book models and low spreads [15][18]. Group 5: Future Outlook - A temporary market correction in late October provided some relief, but the long-term question remains whether existing profit models can withstand sustained trends in gold prices [19][20]. - The industry may undergo a filtering process where only brokers with robust risk management and diversified revenue streams will survive [21][22].