Best Cryptocurrency Brokers
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 Crypto 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 crypto brokers been selected for different reasons to meet the needs of differing cryptocurrency trading and investing styles.
1. Best for Social Trading: eToro
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.
In addition to its regular crypto trading platform, eToro offers an advanced cryptocurrency exchange platform called eToroX. This platform is designed for algorithmic traders and institutional grade investors. It offers traders access to tight-dealing spreads, and its AlgoX application programming interface (API) can be used to create custom automated trading tools.
Commissions Depends on security and leverage
Account Minimum $50 for US and Australia; $200 everywhere else
2. Best for Ease-of-Use: Gemini
Stay on top of market trends, build your crypto portfolio and execute your trading strategy with Gemini’s easy-to-use tools. The Gemini app is available on all the major app stores, and it puts the industry’s best crypto exchange and wallet in your hands.
Gemini’s app is easy to use. You can track asset prices and real-time market prices and set price alerts so you can act fast on price movements for individual assets. You can also schedule recurring buys on Bitcoin and other cryptocurrencies.
Invest with peace of mind with Gemini’s solid cybersecurity and custody solutions. Create a free account and make your 1st buy in as little as 3 minutes.
3. Best for New Investors: Coinbase
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.
4. Best for Gold Investments: iTrustCapital
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.
5. Best for Beginners: Robinhood
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.
Though Robinhood does require a $2,000 minimum balance to access its Robinhood Gold features, there’s a $0 minimum required balance for standard accounts. Combined with the broker’s new fractional share feature, Robinhood is a great option for new traders who only have a small amount of money to invest.
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.
Advantages
- 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.
Disadvantages
- 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.
Cryptocurrency Vocabulary
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
What is the role of a cryptocurrency broker?
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.
What are the best cryptocurrency brokers to use?
Gemini builds crypto products to help you buy, sell, and store your bitcoin and cryptocurrency. You can buy bitcoin and crypto instantly and access all the tools you need to understand the crypto market and start investing, all through one clear, attractive interface. Gemini Crypto Platform offers excellent account management options. You can manage your account at a glance, view your account balance 24-hour changes and percent changes. Get started with Gemini now.
Disclaimer: As per the European Securities and Markets Authority (ESMA), the percentage of retail clients losing money on CFD trading must be updated every three months. Please note that eToro’s new results are 67% in regards to retail investor accounts losing money when trading CFDs with eToro. Due to this change, we require you to immediately update all of your eToro related promotions, web properties, and campaigns featuring CFD disclaimers to 67%.
This content should not be interpreted as investment advice. Cryptocurrency is a volatile market, do your independent research and only invest what you can afford to lose.