Many people believe that cryptocurrencies are the future of finance. When you're ready to leap into crypto, choosing a broker to trade or invest in cryptocurrencies is one of the most important steps to your success in the crypto market. Get started now with Benzinga’s picks for the best cryptocurrency brokers and choose the right one for you.
Best Cryptocurrency Brokers
Since different brokers have different strengths, you need to figure out what kind of broker best suits your cryptocurrency interests. Some brokers provide a social trading platform where you copy other cryptocurrency traders’ trades in your own account. Others can offer the ability to make transactions in a broader selection of altcoins.
Choosing the best crypto broker depends largely on addressing your needs as an investor or trader. The following list of crypto brokers has been selected for different reasons to meet the needs of differing cryptocurrency trading and investing styles.
eToro fundamentally changed the way many people trade and invest with its social trading platform. Social trading involves mirroring another trader or investor’s transactions in a special social trading account. While you make the same amount proportionally as the trader you’re copying, you also take the same percentage of losses the trader takes in their account.
Winner of Benzinga's FinTech Awards for Best Multi-Asset Platform.
- Best ForCopy Trading
This ad promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd. and eToro UK Ltd.) and USA (by eToro USA LLC); which is highly volatile, unregulated in most EU countries, no EU protections and not supervised by the EU regulatory framework. Investments are subject to market risk, including the loss of principal.
Automated trading is an important services for crypto investors because the market is extremely volatile and you often don’t have time to handle your trades. When you use Pionex, it’s free to sign up and there are 18 customized bots you can try, with each one offering a different strategy.
The trading bot selection includes:
- Grid Trading Bot allows users to buy low and sell high in a specific price range.
- Leveraged Grid Bot provides up to 5x leverage.
- Spot-Futures Arbitrage bot helps retail investors to make passive income with low risk. The estimated return for this strategy is 15~50% APR.
- Martingale bot performs DCA buy, one-time sell to capture fluctuation profit.
- Rebalancing bot helps you to hodl the coins.
- Dollar-Cost Averaging (DCA) Bot Sets repeated purchasing at regular intervals to offset the effects of volatility.
Plus, the Smart Trade terminal allows traders to set up stop-loss, take profit, trailing in one trade.
You only pay maker and taker fees of 0.05% when you trade with Pionex, and you can even trade manually if you like. Big traders with accounts exceeding $300,000 can also join the Market Maker program, which drops your maker fees to zero.
Trade on the go with the Pionex app, set up your account to create passive income or allow the app to build on tokens you plan to hold for many years to come.
3. Caleb & Brown
Caleb & Brown aims to bring cryptocurrency to clients who might not understand the market. With personalized service, you get global access to liquidity that makes trading easier and more affordable.
You can trade over 1000 assets, and security for your account is especially enhanced. Only you can access your tokens, and you work directly with a broker who will help you make the best investment decisions.
Because Caleb & Brown is an Australian firm, you also have access to XRP, TFuel and Theta, where U.S. exchanges do not. Talk to your broker about paying for college, retiring, saving for major purchases, planning vacations and much more.
4. Interactive Brokers
Did you know that most cryptocurrency exchanges charge a spread on your buy or sell orders? This means that you'll pay extra for your crypto; for example, an exchange that charges a 1.5% spread will charge you an extra $75 for every $5,000 invested on the platform. Luckily, Interactive Brokers is one of the few platforms that doesn't charge a spread, so you won't have to put up with any hidden fees.
Coinbase is one of the largest and oldest cryptocurrency exchanges. It currently services 43 million users in over 100 countries. Coinbase has extensive educational resources and an intuitive interface ideal for new traders and investors.
The exchange also provides clients with a hosted wallet and offers global customer support. Coinbase is an excellent choice for those new to the cryptocurrency market who do not wish to use social trading services.
Winner of Benzinga's FinTech Awards for Best Software for Long Term Cryptocurrency Investments.
iTrustCapital is one of the few cryptocurrency brokers that lets you trade and hold physical gold in your individual retirement account (IRA). You can also trade Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH) in your IRA. iTrustCapital provides you with a personal wallet by Curv for your crypto transactions.
If you plan on holding a portfolio of stocks and cryptocurrency, WeBull is a great all-in-one option. The platform supports popular cryptocurrencies like Dogecoin, Bitcoin, Ethereum and other altcoins, making it easy to diversify your crypto portfolio. WeBull lets you trade crypto instantly, which is an important feature in volatile markets like the crypto industry.
Winner of Benzinga's 2021 FinTech Awards for Best Investment App.
Voyager connects to more than a dozen of the most trusted and secure crypto exchanges so you have access to the largest crypto trading market available anywhere. Voyager gives you faster, more reliable execution, plus:
- Access to multiple exchanges
- Commission-free trading
Winner of Benzinga's 2021 FinTech Awards for Best Software for Trading Cryptocurrency.
Robinhood is among the best options for beginning traders who want a simple, easy-to-understand layout without all the bells and whistles other brokers offer. Though its trading options and account types are limited, even an absolute beginner can quickly master Robinhood’s intuitive and streamlined platform.
You can quickly access your tax documents and account statements through the app, and you can create an account and begin funding it in as little as 10 minutes. Placing a trade is also equally simple. Brief explanations of every buy and sell order beside each option help you learn — it’s a great feature for beginners.
Winner of Benzinga's 2021 FinTech Awards for Best Brokerage for Beginners.
The BlockFi Interest Account (BIA) allows you to safeguard your assets using the crypto space. Watch your coffers grow by adding crypto to your BlockFi Interest Account as your balance both appreciates in value and helps you earn crypto interest. BlockFi offers 8.6% on stablecoins and up to 6% on BTC.
Here’s an example of how BlockFi can benefit you:
- If you add $10,000 in stablecoin on BlockFi, you can earn up to $860 per year.
- When you let that compound over 5 years without adding to your principal balance, that $10,000 will turn become over $15,000, netting you an average of $1,000 in passive income per year.
Remember, BlockFi is a crypto platform that doesn’t act like a traditional bank. This is an excellent way to trade in the crypto space, but the platform is not FDIC or SIPC-insured, so budget accordingly.
At the same time, this fintech company is the future of finance that allows you to take charge of your finances without a broker-dealer interfering with your thought process.
Listmaker for Benzinga's 2021 FinTech Awards for Best Software for Long Term Cryptocurrency Investments.
11. IFC Markets
IFC Markets provides you with a platform that allows you to invest in a wide range of cryptocurrency products along with other assets. Small-volume, intraday and mid-day traders will benefit quite a bit from IFC, and they will benefit from the 15 years of experience IFC provides. Insured by AIG Europe and with several international awards, IFC Markets also allows you to create synthetic assets.
Cryptocurrency CFDs on Bitcoin and Ethereum and CFDs on crypto futures give you the variety you need to diversify your portfolio using unique asset classes. You will also use 1:8 leverage, enjoy low spreads and low minimums.
Crypto Advantages vs. Disadvantages
Trading and investing in cryptocurrencies often carry a considerable degree of risk, as you may have observed given the volatility of Bitcoin and some other digital currencies. Despite the disadvantages currently associated with cryptos versus fiat currencies (like lower liquidity and minimal payment options), the advantages of holding cryptocurrencies will increase as they become a more common form of payment.
Here's a quick shot of crypto advantages and disadvantages.
- Security: Technology advances typically lead to increased intrusion into your privacy. In contrast, all identities and transactions are strictly secured in the digital currency environment. While most cryptocurrency transactions are very secure, you still could be vulnerable to cybercriminal actions, like hacking.
- Low transaction fees: Because of the elimination of intermediaries like financial institutions, cryptocurrency transaction fees are generally quite low.
- Decentralized: The lack of a central exchange or authority overseeing cryptocurrencies is one of their defining characteristics. Many people consider this among the biggest advantages of cryptocurrencies and blockchain technology.
- High potential returns: You only have to look at a long-term Bitcoin price chart to get an idea of the returns you can make investing wisely in digital currencies. The crypto world is still developing and expanding, so investing in the right digital currency now could translate into considerable returns in the future.
- Acceptance: Because digital currencies have not yet become mainstream, most businesses will not accept them as payment for goods or services. This situation will eventually change as public perception makes digital currencies more acceptable as forms of payment. For example, PayPal has recently allowed customers to hold Bitcoin balances and has plans to allow payments using that cryptocurrency by early 2021.
- Volatility: The market volatility observed in some digital currencies can lead to large gains or large losses. Trading and investing in crypto is not for everyone, especially those with a low pain threshold or aversion to risk.
- Taxes: The Internal Revenue Service (IRS) states on its official website that “Virtual currency transactions are taxable by law just like transactions in any other property.” That IRS web page also links to a guide about how existing general tax principles apply to transactions made using digital currencies.
- Illegal activities: Due to the fact that digital currency transactions generally provide identity security, many people operating outside the law are thought to use digital currency for illegal activities. These activities could include money laundering, “dark web” transactions, and drug and human trafficking.
Like many other financial markets, the cryptocurrency market has evolved its own jargon. Some of the key terms used by market operators are defined below.
- Block: A collection of transactions permanently recorded on a digital ledger that occur regularly in every time period on a blockchain.
- Blockchain: A constantly growing list of blocks in a peer-to-peer network that records transactions.
- Cryptocurrency exchanges: Also called digital currency exchanges, these generally consist of online businesses that allow customers to exchange cryptocurrencies for fiat currencies or other cryptocurrencies.
- Cryptocurrency wallet: A secure digital account used to send, receive and store digital currencies. Crypto wallets can either be cold wallets that are used for storing cryptos in an offline environment or hosted wallets that are hosted by 3rd parties. Hosted wallets store your private keys and provide security for your digital currency balances.
- Distributed ledger: A network of decentralized nodes or computers that connect to a network where transaction data is stored. Distributed ledgers do not have to involve cryptocurrencies and can be either private or permissioned.
- Fork: Also known as a “chain split,” a fork is a split that creates an alternate version of a blockchain that then leaves 2 blockchains running simultaneously. For example, Bitcoin and Bitcoin Cash came about due to a fork in the original Bitcoin blockchain. Another type of fork is known as a “project” or “software fork.” This occurs when cryptocurrency developers take the source code of an existing altcoin project and create a new project. For example, Litecoin is a project fork of Bitcoin.
- ICO: An initial coin offering (ICO) occurs when a new digital currency or token is sold, typically at a discount, to its first set of investors. An ICO lets issuing cryptocurrency companies raise funds from the public to support their coin’s development and maintenance.
- Mining: A computationally-intensive process performed within a cryptocurrency network where blocks are added to the blockchain by verifying transactions on its distributed ledger. Miners are rewarded with digital coins as compensation for their successful computational efforts.
Are You Ready for the Future?
Digital currency and the blockchain appear to be the future of finance. Despite their current typical volatility and lack of widespread acceptance as a payment method, cryptocurrencies seem destined to become increasingly used for online payments. They could therefore make an interesting long-term investment, especially if you have a strong appetite for risk.
Where we will be in 20 years is anyone’s guess, but cryptocurrencies and blockchain technology show growing promise as forces to be reckoned with in the financial world. Get started today with one of our recommended crypto brokers.
Frequently Asked Questions
Cryptocurrency brokers provide speculative contracts on the price of digital currencies. You own the right to buy or sell the contracts as prices shift, not the digital currency.
You can choose from a number of brokers, including Coinbase, Voyager and Gemini. The best one depends on your needs and if they support the altcoin that you’re interested in.
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