Ever since their arrival, cryptocurrencies have been on a wild ride, with some investors swimming in profits while others suffered big losses after buying at the peak in late 2021. This has stirred up a frenzy in the investment industry about the legitimacy of these assets, with big fish like Warren Buffett claiming they are worthless.
Despite the FTX exchange sinking and its executives facing charges in 2022, the volatility of popular coins like Bitcoin keeps luring traders to the deep end of the crypto trading waters. Some traders choose to hold the currency directly, while others take the plunge into the futures market, which lets them use leverage to amplify their gains (but also magnify their losses).
When it comes to trading cryptocurrencies, traditional brokers offer a wider range of investible securities but typically only offer Bitcoin futures. Crypto exchanges, on the other hand, are restricted to digital currencies but offer the option of direct ownership and trading of multiple cryptocurrencies. There are also services like Cash App and PayPal that let users buy and sell cryptocurrencies.
To make a splash in the cryptocurrency trading world, check out the best brokers for the job, including traditional online brokers and specialized cryptocurrency exchanges. You should also consider which brokers offer the best bonuses for opening an account to potentially get a little extra chum.
Best Brokers for Cryptocurrency Trading in February 2023:
Robinhood: This broker lets you buy cryptocurrencies directly, with no commissions. You’ll pay a spread markup on trades, and the app is easy to use, but it lacks features for experienced traders.
Interactive Brokers: You can trade four cryptocurrencies directly with Interactive Brokers, including Bitcoin and Ethereum, with low commissions. The broker also offers access to futures trading, along with a full suite of investment offerings.
Webull: Like Robinhood, Webull provides commission-free trading for cryptocurrencies, along with stocks and ETFs. However, you’ll pay a spread markup of 1% on trades, and the broker requires a minimum of $1 to trade crypto.
TradeStation: This broker has direct currency trading through TradeStation Crypto, with commission-based pricing based on your trading volume. Traders can also buy and sell Bitcoin futures, and there’s no account minimum, although futures margin depends on the contract.
Binance.US: Binance is a specialized trading platform that allows you to buy and sell digital currencies, including Bitcoin and Ethereum. The commission structure is low and gets cheaper the more you trade, but the broker has come under scrutiny for its finances.
Coinbase: Coinbase lets you trade more than 200 cryptocurrencies directly, with vault storage for added protection. However, its commission structure is steep, with a spread markup of 0.5% and transaction fees.
Kraken: Kraken is a cryptocurrency exchange that allows you to trade dozens of digital currencies, with fees ranging from 0.16% to 1.5%, depending on the trade. Kraken Pro offers lower fees for active traders, but the broker isn’t yet available in all states.
Charles Schwab: This investor-friendly company offers trading in Bitcoin futures with an attractive commission of $2.25 per contract. However, any futures contracts you trade will require some minimum margin to hold them open.
TD Ameritrade: TD Ameritrade is a full-service broker that allows access to Bitcoin futures trading. However, it does not allow trading directly in cryptocurrencies, and there is an account minimum of $0, with futures margin depending on the contract.
To navigate the treacherous waters of cryptocurrency trading and choose the right broker, it’s important to evaluate your specific needs. As a new trader, you must decide whether you want to hold virtual currency directly or take the plunge into futures trading that comes with higher risks and rewards. Additionally, if you intend to trade in more than just Bitcoin, traditional brokers may limit your options, and you may find more alternatives on a cryptocurrency exchange.
Attention all crypto enthusiasts! As the mighty Coinsharks, we want to remind you that we do not endorse any content or product on this page. Although we strive to provide you with the most accurate and up-to-date information possible, we encourage our readers to do their own research before making any investment decisions.
Just like a shark navigates the waters with caution, we urge you to exercise your own judgement and carry full responsibility for your choices. Our articles are meant to inform and educate, not to be taken as investment advice.
So swim safely and smartly in the ocean of cryptocurrency, and remember to always do your own due diligence.