Even if legendary investors like Warren Buffett think it’s as good as worthless, cryptocurrency, particularly Bitcoin, has shown to be a popular trading vehicle. Cryptocurrency’s popularity is partly due to its volatility, because these swings allow traders to profit from price changes.
In 2017, for example, Bitcoin broke through the $1,000 barrier for the first time. By the end of the year, it had reached nearly $20,000 worth of bitcoin. Bitcoin was trading at around $3,200 at the end of 2018. However, in 2019, it began to rise once again and went on to exceed $10K before falling back down again. It hit an all-time high over $68K in November 2021 but has since been under pressure.
It’s this kind of price movement that has attracted traders looking to ride the waves to profit. While some traders like to own the currency directly, others turn to the futures market. Futures may be an even more attractive way to play the volatility of digital currencies such as Bitcoin, because they allow traders to use leverage to magnify their gains (but also magnify losses). But futures involve a lot more risk in exchange for that potentially higher reward.
Where you can buy and sell cryptocurrencies
Traders of all types can benefit from the features offered by a good crypto broker. On the other hand, without direct access to Bitcoin, you may only trade futures with a conventional broker. Meanwhile, digital currency exchanges are restricted to digital currencies, but users can directly own them and frequently acquire many rather than just Bitcoin or Bitcoin futures, as they would with a standard dealer. Cash App and PayPal have also gotten in on the action, allowing Americans to buy and sell cryptocurrencies using their mobile phones.
The top cryptocurrency trading brokers, including traditional online brokerages as well as a new specialized cryptocurrency exchange, are listed below. You may also want to look into which brokers provide the greatest sign-up bonuses in order to discover where you can get a little more money.
Which cryptocurrency trading brokers should you use?
Robinhood is an excellent choice for purchasing cryptocurrencies directly. You’ll also be eligible for Robinhood’s well-known trading commissions: $0 per trade, or commission-free, although you will still be charged a built-in spread markup on any trades. If you’re into more than just cryptocurrency, you can stay with Robinhood and take advantage of its low prices on stock and ETF trades. Robinhood’s user-friendly interface makes trading simple, but those seeking for a comprehensive trading platform will be disappointed.
Interactive Brokers lets you trade four different cryptocurrencies right now, including Bitcoin and Ethereum, with the lowest commissions in the industry. It also allows you to buy Bitcoin and Ethereum futures rather than holding the currencies directly. Interactive Brokers also has a full range of investment services that allow you to invest in almost anything that trades on an exchange.
Webull, a less-known alternative to Robinhood that offers cryptocurrency trading, is a solid offering with a sound value proposition. While you won’t be charged commissions on crypto trades (or stocks and ETFs), Webull does have a 100 basis point spread markup (1 percent of the price) on each side of the trade. Bitcoin, Ethereum, and Cardano are among the cryptocurrencies that may be traded. Webull is an excellent broker with useful charting tools and a strong mobile app.
Traders can use this broker to trade directly with other traders through TradeStation Crypto, which has introduced direct currency trading and commission-based pricing for investors. The price of your order is determined by how much money is in your account with the broker and whether it is immediately marketable. Normally, costs range from 0.05 percent to 0.3 percent of the amount you want to buy or sell. Traders can also benefit from significant volume trading discounts if they wish to buy or sell Bitcoin futures.
Binance Exchange is a unique cryptocurrency trading platform that allows you to buy and sell digital currencies, including the most famous ones such as Bitcoin and Ethereum, as well as numerous smaller coins. You’ll be able to trade 60 different cryptocurrencies in all. The Binance fee structure is low, with fees only rising for larger volumes of trading. Trading charges at Binance start at 0.1 percent of the value of your trade (i.e., $10 for every $10,000 traded) and go down from there, depending on your trading volume over the previous 30 days
Coinbase is a major US bitcoin exchange. It provides one-stop shopping for cryptocurrency trading and storage, as well as the ability to purchase digital currencies such as Bitcoin, Ethereum, Solana, and Tether directly. You’ll have access to over 100 cryptocurrencies in all. You’ll also be able to keep your money safe by storing it in a vault with delayed withdrawals for added protection. The exchange’s pricing model is complicated. It charges a spread markup of about 0.5 percent and a transaction fee based on the size of the transfer and the funding source, although its Pro platform is less expensive.
eToro does not charge trading commissions, however like many other firms, it charges a spread based on the cryptocurrency being traded. For Bitcoin, you will pay a markup of 75 basis points, but more obscure cryptocurrencies can cost upwards of 500 basis points or 5 percent. eToro offers CopyTrader as one of its main features, which allows you to follow and copy other top traders’ trades on the platform. Before making a decision, do your homework.
Kraken is a cryptocurrency exchange that lets you trade in a variety of virtual currencies, including Bitcoin and Ethereum, as well as new ones like Cardano and Solana. You’ll be charged a 1.5 percent fee, or 0.9 percent for stablecoins, in addition to any other costs if you use a card and fund your account with bank transfer. Kraken Pro features a premium level for more active traders with fees ranging from 0.16% to 0.26 percent More information about this can be found on their website here: https://www3.krakenfx.com/ -> Kraken is a cryptocurrency exchange that allows you to exchange dozens of different cryptocurrencies, including Bitcoin and Ethereum, as well as new ones like Cardano and Sol
Schwab is a well-known brokerage that consistently earns Bankrate’s selection for the top broker. Schwab, like most other brokers, does not have a minimum account balance requirement, but any future contracts you trade will need some initial margin to keep them open. Schwab has an excellent commission rate of $1.50 per contract, and if you have enough cash on hand, you’ll get a bonus for bringing it along.
TD Ameritrade is a well-known full-service broker and not only does it provide access to conventional assets such as equities and bonds, but it also offers Bitcoin futures. TD Ameritrade, on the other hand, does not allow trading in Bitcoins directly. To begin trading Bitcoin futures, you’ll need to meet the account minimums. (TD Ameritrade has been acquired by Charles Schwab; the two firms will eventually be integrated.)
When picking a broker, it’s vital to think about all of your requirements. And if you’re new to cryptocurrency, you’ll want to figure out whether you want to hold the digital money directly or trade futures, which offer a greater payout but also more risk. You’ll also need to think about whether you wish to trade in additional currencies than Bitcoin, as most conventional brokers restrict traders to just one.