What is a cryptocurrency broker

Here are some of the more understated details about your cryptocurrency broker that could make your trading experiences so much more efficient and successful.

Free forex bonuses

Best Cryptocurrency Brokers for 2021, what is a cryptocurrency broker.

I have also tried the ios app and the android app. They are great, but I just don’t like trading on smartphones in general.

Best cryptocurrency brokers for 2021

Daniel ‘harris’ major

I have tested 40+ crypto brokers. You can find the best cryptocurrency brokers below. This is by far the easiest way to get started with cryptocurrencies.

Trading bitcoin, ethereum, ripple, litecoin or bitcoincash is now easier than ever. There are many cryptocurrency brokers that have these cryptocurrencies on their platform.

Cryptocurrency trading has become really popular in the past years. It’s growing more ever year.

Many big trading brokers have already added some of these cryptocurrencies. Everybody can sign up and start trading bitcoin or other crypto coins. This is the easiest and probably the simplest way to invest in cryptocurrency.

After trying out most brokers, here are the best cryptocurrency brokers:

Best cryptocurrency brokers (non-US traders only)

Plus500 – top rated trading platform

Plus500 is a big name in the trading industry. They have a really low minimum deposit requirement and a great trading site.

Buy/sell cfds on bitcoin in addition to buying stocks, commodities, forex etc (traded only through cfds). Plus500 is the most complete trading platform.

Trade cfds on bitcoin & many other cryptos

Minimum deposit is only $100

Regulated and trusted platform

Very fast signup process

Live chat

Many payment methods (even paypal)

You cannot withdraw any cryptocurrency

You have to complete a questionnaire, upon sign up

Plus500 disclaimer: 76.4% of retail CFD accounts lose money.

IQ option – lowest minimum deposit ($10)

If you don’t want to make a huge initial investment, then IQ option is the best broker for you. The minimum deposit requirement is only $10. This is by far the lowest in the industry.

You can trade many cryptocurrencies

Minimum deposit is only $10

Best trading platform

Multiple account currencies

Free demo account

Regulated by CYSEC (#247/14)

Etoro – top crypto broker

Etoro is a really popular trading site. They have been around since 2006. Etoro is regulated by CYSEC, FCA and ASIC.

Buy/sell bitcoin on etoro in addition to buying stocks, commodities, forex etc. Etoro is the most complete trading platform.

Trade bitcoin & many other cryptos

Minimum deposit is $200

Regulated and trusted platform

Australian traders are also accepted

Great support team

Many payment methods (even paypal)

You cannot withdraw any cryptocurrency

You have to complete a questionnaire, upon sign up

Etoro disclaimer: 71% of retail CFD accounts lose money.

Highlow – best all-round crypto broker

Due to regulation highlow stopped accepting traders from the EU and UK.

Highlow is an australian trading broker (AFSL no.364264). What I like most about this broker is the intuitive platform. It is so easy to use. Especially new traders will like the clean layout.

I’ve been using highlow for a few years now and I never had a problem. Highlow publishes their number of trades on the homepage. There are millions of trades on this broker each month.

I use the main platform which is web based. This means, that you don’t have to download any software. This platform is stable and safe (they use SSL).

I have also tried the ios app and the android app. They are great, but I just don’t like trading on smartphones in general.

The payouts on highlow are amazing (up to 200%, which is more than on other brokers).

Highlow is a great broker for cryptocurrencies (but only if you are not from EU,UK, US). They have a good reputation, great support team and awesome promotions for new traders.

Trade bitcoin & other cryptos

Minimum deposit is only $50

Regulated and trusted platform

Fastest signup process (no questionnaires)

Multiple account currencies

Free demo account (no registration needed)

Nadex – US traders welcome

Nadex is a CFTC regulated broker. In fact, this is probably the only US broker that has this regulation.

Only US traders are allowed on nadex. Non-US traders check out the next broker.

Update OCTOBER 2019: looks like nadex removed crypto trading. After contacting them I found out that they will add it back soon. Register on nadex now and get updated when they add it.

Recently, nadex started offering bitcoin trading.

Trade bitcoin, forex or binary options

Minimum deposit is $250

CFTC regulated broker

Great support team

Many payment methods (even paypal)

Crypto brokers with most cryptocurrencies

Here are the most popular cryptocurrencies offered by cryptocurrency brokers:

Etoro – bitcoin, ethereum, litecoin, dash, ethereum classic, NEO and ripple.

Plus500 – bitcoin, ethereum, litecoin, bitcoin cash, ripple, IOTA.

Avatrade – bitcoin, ethereum, ethereum classic, ripple, dash, bitcoin cash litecoin, monero and NEO.

Lowest minimum deposit brokers

These are the best brokers with low minimum deposit requirements:

Etoro – $200

Plus500 – $100

Avatrade – $100

This is really important because the crypto market itself is unregulated. Depositing on a regulated broker means that your money is safe.

We’ve also looked at the support team and the payment methods. You can deposit easily using multiple payment methods on the brokers below.

Top rated brokers that have cryptocurrencies

While we are all familiar with the broad definition of a broker, is there something more to it when it comes to cryptocurrencies?

Simply put, a cryptocurrency broker refers to a website that traders will visit to trade cryptocurrencies at a set price. In many ways, they are similar to forex brokers whose services are a lot more familiar to the general public.

Etoro disclaimer: 71% of retail CFD accounts lose money.

You still can’t decide which broker is best for you?

How to choose your cryptocurrency broker

Is leverage really necessary? Cryptocurrency markets are volatile in nature with prices fluctuating immensely thereby generating high profits even in the absence of leverage. But for some traders, the desire for more earnings justifies the use of leverage.

Before choosing your broker, settle yourself on whether the already immense profits that come from a cryptocurrency market are enough for you or you would like to use leverage to enhance them even further, bearing in mind, of course, that will also significantly increase the risk factor to your funds.

Negative balance protection: it is always advisable to trade with a broker that affords the negative balance protection facility. That way, you will never be at risk of losing more than what you invested in case you sustain very heavy losses.

How suitable is the required capital for you? This is another subjective part to your decision. Do you prefer trading with a small capital or bigger one to help you zero in on bigger returns? Find out what size trades your broker is offering before you open an account.

Narrow spreads for the win: let us be honest, it is only fair that your broker gets a cut from the money you generated having provided you with the essential facilities for it and all. But let us be honest, you definitely want every last dime for yourself.

A spread refers to the difference between the buying price and selling price of a trade and it varies with each broker. The spread is what counts as fees for your broker so the smaller it is, the lower the cost will be on your part.

Lets go into what aspects you as a trader must consider when choosing a broker to trade cryptocurrencies.

Which cryptocurrencies are you interested in trading?

Make sure you have decided on which cryptocurrencies you want to trade in before signing up with your broker.

If your choice is a prominent cryptocurrency like bitcoin (official site), litecoin (official site), or ethereum(official site), there will be a relatively broad availability of brokers that have trading options for those. However, less prevalent examples like monero, IOTA, or zcash may be a little harder to come by.

So study the cryptocurrencies being offered by a broker before you sign up for an account.

Pros and cons of cryptocurrency brokers

Here are some features that these broker have or don’t:
pros

Signup up with a crypto broker is probably the fastest way to get started with cryptocurrency trading

If you are less tech-savvy then a broker is safer for you

You can start buying cryptocurrency while traditional exchanges don’t always accept this payment method

Most of the time you can’t withdraw cryptocurrencies from a broker. You have to exchange it back to fiat money (USD/EUR etc.)

Cryptocurrency brokers – what to look for

Here are some of the more understated details about your cryptocurrency broker that could make your trading experiences so much more efficient and successful.

1. What are the weekend hours like?

This is a key detail that distinguishes cryptocurrencies from other prominent trading markets like forex, futures, and equity. Cryptocurrency brokers operate during the weekends as well.

There is virtually no difference in purchasing bitcoin at the end of the week as opposed to the middle of the week during peak hours.

But there is a catch. While digital currency exchanges are available during the weekend, your broker may not (why is the stock market closed on the weekend?). So in effect, if there is considerable movement within your relevant cryptocurrency market during a weekend when your broker is not operating, you may not have the ability to respond in any way.

2. How is it hedging?

Your broker is probably not keen on revealing if it is hedging cryptocurrency traders but it is important information for you to know.

Why is it so important for you to know?

Because, as a trader, you want to be absolutely in the clear regarding the policies for risk management being followed by your broker. Let us not forget that cryptocurrency markets are extremely volatile and an unhedged broker is more easily prone to major losses incurred by its clients. Naturally, those costs will warrant compensation via fatter spreads and additional costs for traders. It will be best to sign up with a broker that will not withhold the relevant information from you.

More great features you could be interested in

Commissions and trading on margin – an important thing to note while trading cryptocurrencies is that their prices tend to be more similar to equities than they are to real currencies. So your broker could be charging you commissions in addition to a wide spread on each trade. That, of course, raises the cost probably a bit much for your liking.

Another similarity with equities is that the margin conditions with cryptocurrencies are significantly more than they are with forex or cfds. Consequently, leverage is usually up to 10x. How considerable the margin rate will be for traders is down to what trading strategies and risk management they subscribe to.

Authenticity of market data – aside from merely evaluating how it influences spreads, market data for cryptocurrency CFD prices can be a good indicator of how the quality of the product will be in the future.

One of the more recent examples of this is BTC-e which was an immensely popular platform for trading bitcoin before it was shut down by feds. BTC-e was the first bitcoin exchange to incorporate forex trades and so made their exchange accessible via MT4 and supplied cryptocurrency liquidity for brokers.

But once it was shut down, every broker that depended squarely upon BTC-e was left with no hedging options or market data to put a price on its crypto cfds.

Are short sales available? For many traders, shorting is a crucial strategy option, the lack of which can be a deal breaker with a potential broker. Many brokers tend to offer ‘long’ only since there are only a few hedging solutions when opening short trades.

As you see, investing in cryptocurrencies can be a truly lucrative venture for you but only if you get it right.

And a lot of that is down to which broker you decide to trade with.

Ready to start trading?

Trade with the cryptocurrency brokers listed above to make sure that your money is safe, you pick a broker with a stellar reputation and you keep the fees low. Excel at trading bitcoin by creating your own trading strategy.

These cryptocurrency brokers make it really easy to trade bitcoin and other coins. You don’t have to be a trading expert. It helps if you know what a blockchain is or how the ledger and transactions work, but this is all optional.

Top cryptocurrency brokers for 2021

We found 11 online brokers that are appropriate for trading cryptocurrency.

Best cryptocurrency brokers guide

Are you interested in investing in cryptocurrency?

If the answer to this is a yes, then you will need to find the right cryptocurrencies brokers whocan accommodate you with the best facilities to trade on the cryptocurrency markets.

Before proceeding, lets cover the real definition of cryptocurrency.

Defining cryptocurrencies

In short, cryptocurrencies are digital or virtual currencies.

These currencies are reliant on cryptography to ensure the security and verification of each digital transaction.

Cryptography can control the number of units and prevent the change of code of the cryptocurrency unless some conditions are met.

The important characteristics of the cryptocurrencies

For some people, cryptocurrencies are the savior of the economy. This is because these can give the perks that not all banks or other financial institutions can provide.

Here are the unique characteristics of the cryptocurrencies which you cannot find in the conventional means of transactions.

No third party involved

There will not be third parties like financial institutions, governments, or any other third party organizations which govern the transactions between you and your recipients, and vice versa.

There is no third party that will intervene in your transaction. And it is a win-win solution with the P2P or peer to peer network. You can send cryptocurrencies through the P2P network and the other users will also be able to do the same for you.

Cryptocurrencies have more transparency

The problem with the conventional transactions is that one can ask for a refund and this will procure such unfortunate things to only one party.

As an example if your buyer has sent you a payment and you have delivered the goods but before the goods reach their destination, your buyer reverses the transaction your result could be that you will not receive the money you are owed and your buyer may have lead you.

You can avoid this issue with the cryptocurrencies transactions as these transactions are irreversible.

Not a single party can alter your transactions and this is why it can offer you more transparent transactions than the conventional fiat currencies.

Decentralized

There is no centralized place to transact at all so you can eliminate the high rates of fees when transferring money.

The cryptocurrency is maintained through the ledger technology called the blockchain. The blockchain prevents all other entities from tarnishing the data. Not a single person can alter the system so that your transactions will be safe and sound. We will discuss blockchain next.

Blockchain definition

Blockchain is bitcoin technology comes in the list of recorded data blocks, which are gathered by cryptography.

The recorded data in the blockchain is referred to as ledger. When there is a new data exchange, usually a transaction, a new block is added to the ledger or the blockchain.

In summary, the blockchain or ledger contains important information.

Cryptocurrency brokers

The era of virtual coin is upon us and is paving a golden path for traders. When trading cryptocurrency it is important to trade through reputable cryptocurrency brokers.

We list some notable cryptocurrency brokers below:

Etoro - being one of the top-rated cryptocurrency brokers it offers several currencies including ethereum, ripple, bitcoin and dash.

XTB - XTB too has a good name among traders and offers a wide range of such virtual currencies including litcoin, ethereum and bitcoin. It is placed as one of the top 5 cryptocurrency brokers in the industry.

Plus500 - it offers crypto throughout the day and night with good leverage for the most popular currencies like litecoin, ripple, neo, ethereum and bitcoin.

What is cryptocurrency?

Cryptocurrency is a virtual coin and is traded on cryptocurrency exchanges through cryptocurrency brokers.

Lately, cryptocurrency has continued to gain popularity. This has opened up lots of new trading tools and ways to trade including contracts for difference (CFD). They earn from the difference between the cost of an asset at the present time and what value it could become in the future.

Cryptocurrency wallets

Similar to other wallets this too facilitates storing, sending and receiving the currency. We explain the three types of cryptocurrency wallet below:

The hardware wallet

The hardware wallet is the most secure crypto wallet as all the data is stored offline. A few of the good examples are trezor, keepkey and ledger nano S.

The paper wallet

A paper cryptocurrency wallet is popular and it is secure. However, it is not as convenient as the hardware wallet.

The software wallet

The software wallet is the most conveniant among the three and can be managed from a desktop or mobile phone device. Some of the cryptocurrency wallets of note are exodus, jaxx and electrum.

Cryptocurrency exchanges

A cryptocurrency exchange is a place where buyers and sellers meet for the purpose of buying, selling or trading the virtual coins with the help of couple of cryptocurrency brokers.

Binance exchange is the most famous cryptocurrency exchange in the world and it offers crypto to crypto trading.

Combase is popular too and it offers trading on 100s and 1,000s of virtual currencies like litecoin, ethereum classic and bitcoin.

Localbitcoins, on the other hand, offers over-the- counter trading of virtual coins. Traders can post a currency for sale on its websites mentioning the rate and payment methods.

ICO and token

Abbreviated for initial coin offering the ICO is a kind of fundraising for a start-up. It is done by selling underlying tokens against ethereum or bitcoin.

ICO is similar to IPO in which traders buy company shares. Investors take an entry at early stage of the project and so are capable of making a profit with the success of the company.

However, one basic difference between the two is that any person from any place in the world can take part in the ICO.

Token meanwhile is a kind of cryptocurrency too but represents a specific asset. It is sometimes used as loyalty points that can be redeemed against discounts. It can also represent something uncommon like one token is 5 bitcoins.

The cryptocurrency mining

Just a little different with the fiat currencies, the cryptocurrencies are usually mined by miners. So, there is a phrase to describe the activity as the cryptocurrency mining.

To define it, it is a process in which the miners use powerful resources, in this case computers and adequate hardware to solve mathematical problems. These complicated problems need to be solved in order to attain the rewards.

To make it more challenging, these mathematical problems have cryptographic hash functions which are linked to the block which contains the information of the transaction.

These mathematical problems are tempted to solve with multiple miners.

So, when figuring out solutions for the problems, miners are competing with other cryptocurrency miners. It is about winning and losing. The winners will get small amounts of cryptocurrency.

The reward comes from the transaction fees the users pay. At least that is how major cryptocurrencies conduct and the other factor which also gives the rewards to the miner is the release of new cryptocurrency.

Cryptocurrency wallet

The cryptocurrency wallet is a digital wallet which the users use to deposit, store, hold, send, and receive digital currency or cryptocurrency.

Do not mistake it with concepts like paypal, payza, or various other digital currency systems. The crypto wallets do not serve as the storage of the cryptocurrency. The wallets only store the information in the form of public and private keys.

Meanwhile, the crypto itself is inside the blockchain. The users do not necessarily store their cryptocurrencies in their wallet. In summary, the cryptocurrencies wallet stores the important information which you can use to access your crypto assets.

Cryptocurrency exchange

When you have the cryptocurrencies assets, you may want to sell it to other users or, you could want to trade the cryptocurrencies. Here is where you will need to use a cryptocurrency exchange.

The cryptocurrency exchange is a platform which allows the users to buy, sell, or trade the cryptocurrencies.

Some exchanges only provide crypto-to-crypto trades, but some also allow the crossover currencies so that you can trade from crypto to fiat or fiat to crypto.

There are many cryptocurrencies exchanges that you can find on the internet. Some of them offer the trades for common cryptos such as BTC, ETH, BNB, USDT, and so on. But some also offer more wider array of currencies exchange.

Cryptocurrency brokers verdict

In current times, it is not exaggerating to say that cryptocurrency is the most volatile asset class that you can find.

It is due to the fact that it comes with the high speculative market not to mention that it currently disrupts the conventional economy so that many established players don�t see it to have inherent value.

Therefore, it is still safe to use the cryptocurrencies but in addition to fiat currencies.

We've collected thousands of datapoints and written a guide to help you find the best cryptocurrency brokers for you. We hope this guide helps you find a reputable broker that matches what you need. We list the what we think are the best cryptocurrency brokers below. You can go straight to the broker list here.

Reputable cryptocurrency brokers checklist

There are a number of important factors to consider when picking an online cryptocurrency trading brokerage.

Check your cryptocurrency broker has a history of at least 2 years.

Check your cryptocurrency broker has a reasonable sized customer support of at least 15.

Does the cryptocurrency broker fall under regulation from a jurisdiction that can hold a broker responsible for its misgivings; or at best play an arbitration role in case of bigger disputes.

Check your cryptocurrency broker has the ability to get deposits and withdrawals processed within 2 to 3 days. This is important when withdrawing funds.

Does your cryptocurrency broker have an international presence in multiple countries. This includes local seminar presentations and training.

Make sure your cryptocurrency can hire people from various locations in the world who can better communicate in your local language.

Our team have listed brokers that match your criteria for you below. All brokerage data has been summarised into a comparison table. Scroll down.

Our brokerage comparison table below allows you to compare the below features for brokers offering cryptocurrency brokers.

We compare these features to make it easier for you to make a more informed choice.

Minimum deposit to open an account.

Available funding methods for the below cryptocurrency brokers.

What you are able to trade with each brokerage.

Trading platforms offered by these brokers.

Spread type (if applicable) for each brokerage.

Customer support levels offered.

We show if each brokerage offers micro, standard, VIP and islamic accounts.

Top 15 cryptocurrency brokers of 2021 compared

Here are the top cryptocurrency brokers.

Compare cryptocurrency brokers min deposits, regulation, headquarters, benefits, funding methods and fees side by side.

All brokers below are cryptocurrency brokers. Learn more about what they offer below.

You can scroll left and right on the comparison table below to see more cryptocurrency brokers that accept cryptocurrency clients

Top 5 cryptocurrency brokers – which broker is best? 2021

Whether you’re a newbie trader looking to invest in digital

Currencies for the first time, or a seasoned professional in the hunt for a more competitive platform, cryptocurrency brokers are in their hundreds. Although this allows you to choose a broker that best meets your needs, knowing which platform to sign up with is no easy feat.

In this article, we discuss the best five cryptocurrency brokers currently in the UK market. We also explore the many factors that you need to look out for when choosing a new broker – such as regulation, fees, spreads, customer support, and payment methods.

Table of content

Etoro - buy and invest in assets commissions-free

Buy over 2,400 stocks, 16 cryptocurrencies, and 250 etfs without paying any commissions

Trade thousands of cfds

Deposit funds with a debit/credit card, e-wallet, or bank account and paypal

Perfect for newbie traders and heavily regulated

What is a cryptocurrency broker?

In a nutshell, a cryptocurrency broker is an online brokerage platform that allows you to buy and sell popular digital currencies like bitcoin, ethereum, and ripple. The process operates much the same as a traditional stockbroker, insofar that you will need to open an account, deposit funds, and decide which asset you wish to invest in. You will then need to determine how much you want to invest, and the broker will facilitate the purchase on your behalf.

With that being said, there are two types of cryptocurrency brokers active in the online space, and the one that you opt for will depend on your personal requirements. This consists of a cryptocurrency broker that allows you to purchase digital currencies in their truest form, meaning that you will need to then store your coins in a private wallet.

Alternatively, some traders prefer to use cryptocurrency brokers that facilitate CFD products. This allows you to invest in cryptocurrencies without owning the underlying asset, meaning that you do not need to worry about storage. Moreover, CFD brokers allow you to short cryptocurrencies, so you can speculate that the value of the asset will go down.

In a similar nature to traditional brokers, you will need to pay a fee to invest in cryptocurrencies. This usually comes in the form of a commission, which is calculated against the value of your investment. You need to pay this at both ends of your trade. If using a CFD cryptocurrency broker, then you will likely be able to trade on a commission-free basis. You will, however, need to pay a fee in the form of the spread.

Pros and cons of cryptocurrency brokers

Types of cryptocurrency brokers

There are two types of cryptocurrency brokers active in the UK space – brokers that allow you to own cryptocurrencies 100% outright, and brokers that facilitate cryptocurrency investments via cfds.

Below we explain how the two broker-types differ.

�� own cryptocurrencies outright

If you’re looking to invest in popular cryptocurrencies like bitcoin, and you wish to own the asset 100% outright, then you will need to use a specialist cryptocurrency broker. The overarching concept is that you will personally take ownership of the coins and thus – you will need to store them in a private wallet. This comes with both its pros and cons.

On the one hand, by storing the coins in a private wallet, they will always remain in your possession no matter what. As such, you are not susceptible to a broker collapse. On the other hand, storing the coins yourself does come with its risks. This is because bad actors have the capacity to hack private wallets remotely when the user has failed to install security safeguards.

Crucially, the safest way to store your coins is to keep them in a hardware wallet, not least because it is never connected to the internet. This does make the process of transferring the coins out somewhat cumbersome, although this is the trade-off that you need to make when owning cryptocurrencies outright.

�� investing with a cryptocurrency CFD broker

The second options available to you is to use a cryptocurrency CFD broker. As is the case with other CFD products like stocks, indices, and commodities, you will not own the underlying cryptocurrency asset. Instead, you are merely speculating on which way the markets will go.

For example, if you like the look of bitcoin and think that it is due to increase in value over the coming days or weeks, cfds are a great way to facilitate this. Crucially, cfds allow you to invest in bitcoin cheaply and quickly. Moreover, cfds give you the option of applying leverage, as well as engage in short-selling.

Regarding the former, this means that you can invest more than you have in your account. And the latter – this is where you speculate on the value of a cryptocurrency going down. A further benefit of using a CFD cryptocurrency broker is that platforms are often regulated by the UK’s FCA or cysec in cyprus.

What payment methods do cryptocurrency brokers support?

In a time not so long ago, buying cryptocurrencies with real-world money was a difficult task, not least because brokers were unable to get the required green light from payment issuers. This meant that you would need to transfer cash to an unregulated broker – many of whom were nothing more than a scam.

However, with the cryptocurrency industry now a multi-billion pound marketplace, there are heaps of cryptocurrency brokers that support everyday payment methods. This includes the likes of:

As we discuss in the next section, cryptocurrencies brokers will sometimes charge you a fee when depositing and withdrawing funds. Furthermore, it’s likely that you will need to meet a minimum deposit amount.

Cryptocurrency broker fees

Cryptocurrency brokers are in the business of making money, so there is a range of fees that you need to made aware of prior to making an investment. The specific fees will vary from broker-to-broker, so be sure to check this yourself.

Deposit and withdrawal fees

Whether or not you need to pay any deposit and withdrawal fees will depend on two things – the broker and the type of the payment method that you wish to use.

For example, some of the brokers that we recommend on this page allow you to deposit funds for free, although they typically charge a very small withdrawal method.

Brokers that do charge a payment fee will usually do this on a percentage basis. For example, if the cryptocurrency broker charges 4% to deposit funds with a debit card, and you wish to deposit £1,000, you will pay a fee of £40.

Trading commissions

Some cryptocurrency brokers will charge you a trading commission when you make an investment. If they do, this will be charged at both ends of the trade. Moreover, this is typically calculated as a percentage against the amount you invest.

Let’s say that the cryptocurrency broker charges a 1% trading commission

You want to buy £500 worth of bitcoin

You will be charged a commission of £5 (1% of £500)

You want to sell your bitcoin when it is worth £750

You will be charged a commission of £7.50 (1% of £750)

As you can see from the above example, you will need to pay a commission when you initially invest in a cryptocurrency, as well as when you decide to sell.

Spreads

The spread is only relevant if you plan to use a cryptocurrency broker that specializes in cfds. For those unaware, the spread is the difference between the buy and sell price, so it’s a fee that you pay indirectly.

You use a cryptocurrency CFD broker to invest in bitcoin

The ‘buy’ price of bitcoin is $10,000

The ‘sell’ price of bitcoin is $10,100

The difference between the two prices amounts to 1%

This means that you need to make at least 1% in gains to break even

Essentially, you’ll want to use a broker that offers super-tight spreads, as this will help keep your trading costs to a minimum.

Supported digital currencies at cryptocurrency brokers

Although the vast majority of first-time investors seek to buy bitcoin, there are now thousands of other cryptocurrencies active in the market. Commonly referred to as ‘alt-coins’, these are much more volatile than bitcoin, and they suffer from much lower levels of liquidity.

Alt-coins also come with more risk than bitcoin. On the flip side, alt-coins have a greater upside potential. Nevertheless, although listing each and every digital currency that cryptocurrency brokers support is beyond the remit of this article, below you’ll find the most commonly traded coins in the space.

Short-selling cryptocurrencies

Short-selling refers to the process of speculating that an asset will go down in value. For example, if you think that bitcoin is currently overvalued and thus – it’s price will go down in the coming weeks, you would need to short-sell the asset.

The only way that you can do this is to use a cryptocurrency broker that specializes in cfds. The process works largely the same as making a standard market investment, but in reverse. In other words, you will initially need to place a sell order, and then a buy order when you decide to exit your trade.

Check out the example below of how a short-sell investment would work at a cryptocurrency broker.

You’re not a fan of bitcoin, so you decide to use a CFD broker to short-sell the asset

Bitcoin is currently priced at £5,000 per coin

You place a ‘sell’ order at a total stake of £1,000

A few days later, bitcoin begins to tank in the markets and it is now worth £4,000 per coin

This represents a reduction in value of 20%

You decide to lock-in your profits, so you then place a ‘buy’ order to exit the trade

You made a total of £200 in profit, based on 20% of your £1,000 stake

Leverage at cryptocurrency brokers

Do you have a higher tolerance for risk and wish to apply leverage on your cryptocurrency trades? If so, you’re in luck, as there are now dozens of cryptocurrency brokers active in the online space that allow you to apply leverage. Once again, you will need to use a CFD broker for this.

If you’re based in the UK, you might be bound by the regulations imposed by the european securities and markets authority (ESMA). If you are, this means that you will be capped to leverage of 2:1 when trading cryptocurrencies. The limits are in place to protect non-professional investors from large losses.

At leverage of 2:1, you can trade twice the amount that you have in your account

So, a balance of £500 would allow you to buy or sell £1,000 worth of cryptocurrencies

If your trade goes down by more than 50% (1/2), your trade will be liquidated

This means that you would lose your entire £500 margin

If leverage of 2:1 is not sufficient for your trading needs, you will need to consider a cryptocurrency derivative broker like crypto rocket. Such brokers operate in an unregulated manner, so you do need to tread with caution. If you do take the plunge, you can trade cryptocurrencies with leverage of up to 500:1, which is huge.

At leverage of 500:1, you can invest 500 times more than you have in your cryptocurrency broker account

So, a balance of £500 would allow you to buy or sell £250,000 worth of cryptocurrencies

This would amplify your gains by 500x

However, if your trade goes down by more than 0.2% (1/500), your trade will be liquidated.

Are cryptocurrency brokers safe?

You’ve likely heard horror stories of cryptocurrency brokers getting hacked, with clients subsequently losing their entire balance. While a number of brokers have previously covered these losses, many haven’t. The overarching concern is that much of the cryptocurrency broker space operates unregulated.

As such, you’ve got nowhere to turn if things go wrong. The good news is that some brokers do actually hold a license with the UK’s FCA or cysec in cyprus. Others also hold a license with ASIC in australia, meaning you’ll have regulatory oversight on multiple fronts.

With that being said, we would suggest making the following considerations when choosing a new cryptocurrency broker to ensure your funds remain safe.

�� cold storage: if you’re using a traditional cryptocurrency broker that allows you to purchase and own digital coins outright, then you should check whether or not the platform utilizes cold storage. This is where the funds are stored offline, so the chances of an external hack are virtually non-existent.

�� two-factor authentication: two-factor authentication (2FA) provides an extra layer of security on your brokerage account. In a nutshell, you will be required to enter a unique code that is sent to your mobile phone every time you perform a key account function. Crucially, this includes logging in and withdrawing funds.

�� multi-sig wallets: if the cryptocurrency broker utilizes multi-sig wallets, this means that multiple signatures are required for the platform to process withdrawals. Once again, this acts as a major safeguard against third-party hackers

�� encrypted data: if you are planning to deposit funds with a traditional debit or credit card, then you need to ensure that the broker’s website encrypts data. This will prevent your card details from getting into the wrong hands.

How to use a cryptocurrency exchange: step-by-step guide

So now that you know the ins and outs of how cryptocurrency brokers operate, we are now going to discuss the end-to-end investment process. By following the step-by-step guidelines outlined below, you’ll be able to invest at a cryptocurrency broker within minutes.

Step 1: choose a cryptocurrency broker

Your first port of call will be to choose a cryptocurrency broker that best meets your needs. You’ll need to consider key factors such as whether you want to buy cryptocurrencies or invest in cfds, as well as fees, payment methods, customer support, and spreads.

We would suggest reviewing the section below on how to choose a cryptocurrency broker if you need further assistance. If you don’t have time to research a cryptocurrency broker yourself, why not consider the merits of one of the pre-vetted platforms listed on this page?

Step 2: open an account

Regardless of whether you are using a traditional broker or a CFD platform, you will need to open an account. The amount of information collected from you will depend on the type of cryptocurrency broker that you opt for.

With that said, if you’re looking to deposit funds with real-world money, then this will likely include the following:

First and last name

Home address

Nationality

Date of birth

Contact details

Step 3: verify your identity

You will now need to verify your identity. This is to ensure that the broker remains compliant with its license issuer, as well as domestic laws on anti-money laundering.

The process requires you to upload a clear copy of your government-issued ID (passport or driver’s license) and a proof of address. This should be a bank statement or utility bill that is dated within the last three months.

Step 4: deposit funds

Once you’ve had your account verified by the cryptocurrency broker, you’ll need to deposit some funds. The specific payment method available to you will depend on the broker, although this usually includes a debit/credit card or bank transfer.

Some brokers also support e-wallets like paypal and skrill. Unless you are using a bank transfer, all other deposit methods are instant.

Step 5: invest in your chosen cryptocurrency

You are now ready to make a cryptocurrency investment. You will first need to choose the specific cryptocurrency that you want to buy (bitcoin, ethereum, etc.) and then enter the amount that you wish to invest.

There is no requirement to purchase a whole bitcoin, so you can buy as little as you like – as long as you meet the broker’s minimum investment amount. The funds will then be debited from your cash balance, and you’ll see the cryptocurrencies added to your account.

Step 6: withdraw coins from the cryptocurrency broker

You will now need to withdraw your newly purchased cryptocurrency coins out of the broker. Although most platforms allow you to store your coins on the broker’s website, we would strongly advise against this. Crucially, if the broker was hacked by a malicious third-party, you stand the risk of having your coins stolen.

As such, you should withdraw your coins to a private cryptocurrency wallet. To do this, head over to your wallet and copy your wallet address. Elect to make a withdrawal at the broker by pasting in your wallet address and entering the amount that you wish to cash out. The coins should arrive in your wallet within 1 hour – depending on how long the broker takes to process it.

How to choose a cryptocurrency broker?

Before signing up with a cryptocurrency broker, we would suggest asking the following five questions.

✔️ is the cryptocurrency broker regulated?

✔️ does the cryptocurrency broker support your preferred payment method?

✔️ what deposit, withdrawal, and trading fees does the cryptocurrency broker charge?

✔️ does the broker allow you to purchase bitcoin outright, or are you investing in cfds?

✔️ does the cryptocurrency broker list your preferred digital currencies – such as bitcoin and ethereum?

Top 5 cryptocurrency brokers – which broker is best?

So now that you have a firm grasp of what you need to look out for in a cryptocurrency broker, we are now going to list our top five platforms of 2021. All of these brokers have been pre-vetted by our team of in-house reviewers, so rest assured that the following platforms meet our strict criteria.

Asset 4

One of the more interesting developments in the world of bitcoin is how not everyone uses a regular exchange to buy cryptocurrency. The so-called bitcoin brokers have gained a lot of popularity over the past few years. Some of these platforms also support alternative currencies, tokens, and digital assets. However, it seems there is still some confusion as to how a bitcoin broker operates exactly.

The inner workings of a bitcoin broker

When it comes to buying bitcoin and other cryptocurrencies, many people automatically sign up for an exchange . That is only normal, as these platforms are the “gatekeepers” to convert between fiat currency and bitcoin. Exchanges serve customers all over the world, and often support multiple fiat currencies. The most common exchanges include coinbase, kraken, and bithumb.

Now that nearly every country has its own bitcoin and cryptocurrency exchange, one wonders why bitcoin brokers even exist. There is a very good reason why they are around since they provide more convenient access to bitcoin and other cryptocurrencies. While they are less popular than exchanges as of right now, one should never discount a bitcoin broker by any means. Such services can be quite invaluable.

Bitcoin brokers are often referred to as OTC trading services, since they offer the exact same type of functionality. Trading bitcoin and other cryptocurrencies over the counter provides quite a few advantages. This is especially true for novice users looking to enter the world of bitcoin. Signing up for an exchange and going through the verification process is a cumbersome endeavor, and can often take days, if not weeks to complete. Such delays often result in users not purchasing cryptocurrency in the end, as the process takes too long.

The biggest advantage a bitcoin broker provides is how prices are less subject to price volatility. When using an exchange, users have to wait for other people to match their buy or sell orders. A bitcoin broker, on the other hand, will sell or buy bitcoin at a fixed price, without any arguments. While there is a premium to take into account for broker trades – often between 5% and 10% – it is a more convenient solution for people looking to buy small amounts of bitcoin.

At the same time, using a bitcoin broker can be subject to some minor issues as well. During times of extremely high demand, it is possible brokers run out of bitcoins to fulfill orders. This has happened to some dutch companies not that long ago. While this is positive news for bitcoin in general, the lack of currency to fulfill orders can be quite problematic for novice users who are not familiar with the concept of liquidity.

In the end, people who look to buy bitcoin quickly and in a convenient manner are often better off using a broker compared to an exchange. Brokers often support additional payment methods, including credit and debit cards. For the average person on the street, that service is far superior compared to using exchanges. Bitcoin brokers certainly have their place in the ecosystem, and they will only become more popular as time progresses. A great place to find bitcoin brokers is localbitcoins, you can find people who will exchange bitcoin’s to cash locally in your area and can even check each one’s reputation according to their trades.

If you liked this article, follow us on twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.

About the author

Jdebunt

JP buntinx is a fintech and bitcoin enthusiast living in belgium. His passion for finance and technology made him one of the world's leading freelance bitcoin writers, and he aims to achieve the same level of respect in the fintech sector.

Best bitcoin brokers 2021

The forexbrokers.Com annual forex broker review (five years running) is the most cited in the industry. With over 50,000 words of research across the site, we spend hundreds of hours testing forex brokers each year. How we test.

Now over twelve years old, bitcoin continues to grow and mature as an alternative asset. After peaking at over $18,000 per coin in late 2017, bitcoin retreated in price, then surged back to claim record price highs above $28,000 in late december 2020. As of publishing, the total value of all bitcoin is nearly $500 billion.

This guide explains what bitcoin is, how to buy bitcoin, and summarizes the best cryptocurrency brokers to trade bitcoin cfds.

What is bitcoin?

Bitcoin is a form of public internet money or electronic cash, known as cryptocurrency. It was first launched on january 3rd, 2009 after its design was published in a white paper. Bitcoin’s supply is limited, and every bitcoin comes into existence through mining, where anyone from the public can verify transactions to help secure the network.

Thanks to its use of blockchain technology, all transactions are public. Furthermore, bitcoin is highly-resistant to any form of censorship, and forged transactions are impossible.

Best bitcoin brokers for 2021

Based on over 105 different variables, here are the best forex brokers to buy cryptocurrency, such as bitcoin.

Etoro - best overall for crypto trading

Swissquote - trusted global brand, diverse offering

IG - excellent offering, most trusted

City index - great all-round offering

Avatrade - multiple trading platform options

XTB - best customer service, great platform

HYCM - over 60 crypto cfds offered

Best overall for crypto trading - visit site

Etoro is excellent for cryptocurrency trading and copy trading and is our top pick for both categories in 2021. Furthermore, etoro offers a user-friendly web platform and mobile app that is great for casual investors, including beginners. (75% of retail investor accounts lose money) read full review

Trusted global brand, diverse offering

Traders willing to pay a premium to have their brokerage account held with a swiss bank choose swissquote for its competitive, multi-asset offering. Swissquote's cryptocurrency trading and wallet service are available from its etrading account, but is segmented away from its forex and CFD trading offering. (79% of retail investor accounts lose money) read full review

Excellent offering, most trusted - visit site

IG is the ultimate forex broker, finishing 1st overall in our 2021 ranking. Alongside finishing third for platforms & tools and second for research, IG finished best in class (top 7) for cryptocurrency trading, offering of investments (19,000+ tradeable instruments), commissions & fees, education, mobile trading, and professional trading. (75% of retail investor accounts lose money) read full review

Great all-round offering - visit site

Backed by GAIN capital, city index is a trusted brand that traders choose for its advanced trading platforms, excellent mobile app, diverse market research, education, and extensive range of markets. (73% of retail investor accounts lose money) read full review

Multiple trading platform options - visit site

Avatrade is a trusted global brand best known for offering traders an extensive selection of trading platform options. Our testing found avatrade to be great for copy trading, competitive for mobile, mostly in line with the industry average for pricing and research, and a winner for investor education. (73% of retail investor accounts lose money) read full review

Best customer service, great platform - visit site

As a trusted multi-asset broker, XTB offers traders outstanding customer service and an excellent trading experience overall thanks to the xstation 5 trading platform. 25 cryptocurrencies are offered. (82% of retail investor accounts lose money) read full review

Over 60 crypto cfds offered - visit site

While its storied history is impressive, when it comes to trading forex and cfds across its global brands, HYCM fails to impress. Effective spreads are high across all account options, and research and education are sub-par. That said, HYCM offers over sixty cryptocurrency CFD pairs. (71% of retail investor accounts lose money) read full review

How do you buy bitcoin?

There are three primary ways to buy and sell cryptocurrencies like bitcoin:

1. Buy bitcoin (the underlying asset) - the most common way to buy bitcoin is to buy physical bitcoin from an online bitcoin exchange such as etoro. Your bitcoin is then held and secured in a digital wallet provided by the broker.

2. Buy a bitcoin CFD (contract for difference) - another popular way to trade bitcoin is to use cfds. With a CFD, you do not own the underlying bitcoin. Instead, you are betting on the direction that bitcoin’s price will go, either up or down, and profiting when you are right.

3. Buy an exchange-traded note (ETN) - while far less common and not available in many countries, exchange-traded notes (etns) are very slowly growing in popularity. Etns are similar to exchange traded funds (etfs), meaning they trade like stocks on a formal stock exchange. Like etfs, etns aim to mirror the price of the underlying asset they track. For more on bitcoin etns, including pros and cons, see this guide from xena exchange and this guide from ETF.Com.

How much does it cost to trade bitcoin?

Fees for buying bitcoin can become quite high across many websites and un-regulated exchanges, which is why we only suggest using a regulated broker. While fees may vary to buy bitcoin, the costs will consist of any per-trade commission, along with the difference between the bid/ask price, known as the spread.

The fees to trade bitcoin generally start at anywhere from 0.002% to as much as 2% of the trade value, depending on where you trade and the trade size.

Brokers that charge a commission will usually have lower spreads, while commission-free brokers will have higher spreads to make up for the difference. For example, if you buy $25,000 worth of a bitcoin CFD, with a spread of $50, that would be commission equivalent 0.002% of the trade value. In other words, whether via spread or commission, bitcoin involves trading costs.

What does a bitcoin broker do?

Bitcoin brokers enable you to buy or sell cryptocurrency. Without a broker, you cannot safely trade cryptocurrencies like bitcoin. To avoid scams, using a trusted broker is crucial when you are trading bitcoin.

What is the best forex broker to trade bitcoin?

For bitcoin CFD trading, including the ability to go long or short, we recommend forex brokers such as IG or city index due to their competitive pricing. Conversely, traders who wish to purchase the underlying physical bitcoin will find that etoro is a great option, followed by swissquote bank.

Which forex broker offers the most cryptocurrencies to trade?

Our research found that etoro offers the most cryptocurrency pairs to trade. With etoro, investors can buy and sell bitcoin (underlying asset), trade crypto cfds, and even copy trade other investors. Behind etoro, other crypto brokers that offer dozens of cryptocurrency cfds to choose from include XTB and HYCM.

Which crypto exchange is the safest?

Among brokers offering bitcoin underlying, swissquote, regulated as a swiss bank, is the safest broker. Founded in 1996, swissquote is publicly-traded (SIX: SQN) and regulated in four tier-1 jurisdictions. Behind swissquote, IG is another safe broker for bitcoin trading. While not a regulated swiss bank, IG is publicly traded (LON: IGG) and regulated in six tier-1 jurisdictions.

How much is one bitcoin worth?

Powered by blockchain technology, the price of one bitcoin reached a new all-time high above $28,000 in december 2020. The price gains were mostly attributed to new institutional investors entering the market and buying bitcoin.

I first wrote about cryptocurrencies in 2013 when bitcoin was still a novelty. Yet, as I’m writing this, the combined market cap of cryptocurrencies is over $600 billion, with bitcoin accounting for over 70%. According to data from coinmarketcap, the price of bitcoin fluctuates widely across various trading venues.

Is buying bitcoin risky?

Despite the potential for large gains, buying bitcoin remains risky. The main risk is significant volatility (price swings). For example, if you buy bitcoin and the price drops by a lot, it can create a substantial loss of your money. Adding any leverage (trading with borrowed money) will only further increase the risk when buying bitcoin.

Also, bitcoin remains a complex financial product. Many investors have lost money by losing their private keys, whether through exchange hacks or not securing them properly in self-hosted wallets. Using a regulated, reputable broker is essential for safely trading bitcoin.

How do I know if a crypto broker is regulated?

To avoid scams, you should only use regulated bitcoin brokers. To verify a broker's regulatory status, first, determine the broker's legal name and country, then find the appropriate regulator website to look them up. For example, a broker in the UK must be authorized and regulated by the financial conduct authority (FCA). Here on forexbrokers.Com, we track, rate, and rank brokers across 20 international regulators.

How do you sell bitcoin short?

To speculate that bitcoin's price will fall, you must open a forex brokerage account with a broker that offers bitcoin cfds. Using a contract for difference (CFD), you can open a sell order (bet the price will go down) and then place your trade. To make a profit, the price of bitcoin must fall. If bitcoin rises in price, you will lose money.

If cfds are not available, using a futures or options contract can be an alternative way to bet against bitcoin. However, bitcoin futures and options are very complex instruments, not widely available, and should only be traded by professionals.

Should I buy physical bitcoin or use cfds to trade bitcoin?

If you are a long-term cryptocurrency investor, buying the underlying physical bitcoin is the safest and lowest-cost way to invest in bitcoin. For more active, short term trading, contracts for difference (cfds) can be suitable. Just remember, cfds are not ideal for holding long-term positions (months or years) because the financing charges add up.

Is trading cryptocurrency legal?

In some jurisdictions, cryptocurrency is banned or illegal to purchase, trade, or own. Meanwhile, in other countries, it is perfectly legal. For example, in the united states (US) and united kingdom (UK), it is legal to buy cryptocurrency from regulated brokers. However, cfds are illegal to trade in both countries. The UK ban on bitcoin cfds went into effect on january 6th, 2021.

How do you safely store bitcoin?

If you do not want to keep your bitcoin with your online broker, you need to store it safely. To secure your bitcoin, you must choose a hot (online) or cold self-hosted (offline) wallet.

Personally, for a hot wallet (online, internet-connected), I use blockchain.Com, which provides a mobile and web-based version. For cold storage, I use ledger, a hardware device that allows you to keep the bitcoin private key offline (including creating a backup recovery phrase in written format).

Do I need a broker to buy bitcoin?

Yes, always use a regulated bitcoin broker to buy bitcoin. Using a regulated broker, you will protect yourself from scams, and your bitcoin will be secure. To avoid scams, never buy bitcoin from someone directly on a third-party website or marketplace.

Summary

Here's a summary of the best forex brokers for crypto trading.

Methodology

For our 2021 forex broker review we assessed, rated, and ranked 27 international forex brokers. Each broker was graded on 108 different variables and, in total, over 50,000 words of research were produced.

While encouraged, broker participation was optional. Each broker had the opportunity to complete an in-depth data profile and provide executive time (live in person or over the web) for an annual update meeting.

All data submitted by brokers is hand-checked for accuracy. Ultimately, our rigorous data validation process yields an error rate of less than .1% each year, providing site visitors quality data they can trust. Learn more about how we test.

Forex risk disclaimer

"there is a very high degree of risk involved in trading securities. With respect to margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, there is considerable exposure to risk, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or related instrument. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses." learn more.

About the author: steven hatzakis steven hatzakis is the global director of research for forexbrokers.Com. Steven previously served as an editor for finance magnates, where he authored over 1,000 published articles about the online finance industry. Steven is an active fintech and crypto industry researcher and advises blockchain companies at the board level. Over the past 20 years, steven has held numerous positions within the international forex markets, from writing to consulting to serving as a registered commodity futures representative.

Trading cfds, FX, and cryptocurrencies involve a high degree of risk. All providers have a percentage of retail investor accounts that lose money when trading cfds with their company. You should consider whether you can afford to take the high risk of losing your money and whether you understand how cfds, FX, and cryptocurrencies work. All data was obtained from a published website as of 12/14/2020 and is believed to be accurate, but is not guaranteed. The forexbrokers.Com staff is constantly working with its online broker representatives to obtain the latest data. If you believe any data listed above is inaccurate, please contact us using the link at the bottom of this page.

The names, products, services, branding/logos, and other trademarks or images featured or cited within this website (www.Forexbrokers.Com) are the property of their respective owners and the owners retain all legal rights therein. These trademark holders are not affiliated with forexbrokers.Com and the use or display of names, trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, or endorses forexbrokers.Com or any of its reviews, products, or services. Forexbrokers.Com declares no affiliation, sponsorship, nor any partnership with any trademark holders unless otherwise stated.

IG - 76% 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.

Advertiser disclosure: forexbrokers.Com helps investors across the globe by spending over 1,000 hours each year testing and researching online brokers. How do we make money? Our partners compensate us through paid advertising. While partners may pay to provide offers or be featured, e.G. Exclusive offers, they cannot pay to alter our recommendations, advice, ratings, or any other content throughout the site. Furthermore, our content and research teams do not participate in any advertising planning nor are they permitted access to advertising campaign data. Here is a list of our partners.

Disclaimer: it is our organization's primary mission to provide reviews, commentary, and analysis that are unbiased and objective. While forexbrokers.Com has some data verified by industry participants, it can vary from time to time. Operating as an online business, this site may be compensated through third party advertisers. Our receipt of such compensation shall not be construed as an endorsement or recommendation by forexbrokers.Com, nor shall it bias our reviews, analysis, and opinions. Please see our general disclaimers for more information.

So, let's see, what we have: compare the best cryptocurrency brokers. Start trading bitcoin (BTC), bitcoin cash (BCH) ethereum and other coins. Choose safe and legit crypto brokers. At what is a cryptocurrency broker