Cryptocurrency brokerages are the go-to way for engaging in cryptocurrency purchases or trading for the very first time. Finding the best cryptocurrency broker to buy Bitcoin, Ethereum, etc is essential. There are several reasons for this, all of which will be explored in this article.
If you are planning to invest in cryptocurrency or are just getting started with cryptocurrency trading, knowing which brokerage to pick can be an essential part of your overall experience within the industry. Keep reading to find out more about the best cryptocurrency brokers
Best Cryptocurrency Brokers in 2023
There are several factors to consider when picking a cryptocurrency brokerage so to make things a bit easier on you, we've hand-picked some of the best exchanges where you can get started with cryptocurrency trading.
What Is a Cryptocurrency Broker?
A cryptocurrency broker otherwise referred to as a cryptocurrency brokerage, is a company that connects you with the cryptocurrency market. Brokerages are essentially middlemen standing between you and the cryptocurrency exchange. The broker buys up a large number of specific cryptocurrency tokens and offers them on its platform.
How Do Cryptocurrency Brokerages Work?
You can think of brokerages as intermediaries that are on the opposite side of any trade. The brokerages can be a lot more flexible with regard to the settlement of assets, a possible reason why they might be preferred over exchanges. Cryptocurrency Brokers, allow traders to lock in a trade at a specific price point, even if they are unable to pay for the asset at that point in time. This would appeal to traders who want to trade an asset instantly. Unlike in exchanges, liquidity is determined by the brokerage and not the traders within the market, meaning that as long as a brokerage accepts an order, the trader can execute a transaction.
What’s the Difference Between a Broker and an Exchange?
There are several key differences between cryptocurrency brokerages and cryptocurrency exchanges.
Here’s what you need to know about brokerages:
To purchase a cryptocurrency token from a brokerage, you will not require back-end knowledge of how the blockchain actually works, as the process is simple.
In a cryptocurrency brokerage, you can pay through convenient payment methods, including credit cards, debit cards, and PayPal.
Brokerages can also provide you with a higher level of customer support relative to exchanges.
Here’s what you need to know about exchanges:
The market determines the price of the cryptocurrency assets on exchanges.
Exchanges match orders, meaning that at least two traders are needed to execute a trade.
The exchange makes money by charging fees for the traders once they are matched.
What Are CFD Brokers?
CFD trading or a CFD contract is where you agree to exchange the difference in the price of a cryptocurrency. This price is calculated from when you first open the position to when you close it. You are speculating on the price of the market rather than buying the cryptocurrency token outright.
Advantages and Disadvantages of Cryptocurrency Brokers
When you compare cryptocurrency brokers with exchanges or other platforms, you will notice certain other characteristics.
Advantages of Cryptocurrency Brokers
- Cryptocurrency brokerages provide a simple service to purchase cryptocurrencies.
- These brokerages typically have a dedicated mobile application that you can download and install on any smartphone.
- You get access to a wide range of cryptocurrency tokens that can be traded extremely quickly.
- Brokerages typically require you to complete know-your-customer (KYC) verification and hand over personal documentation.
- They feature higher fees when compared to exchanges.
How Do I Get Started with a Cryptocurrency Broker?
Getting started with a cryptocurrency brokerage is a straightforward process.
Step 1: Open a Cryptocurrency brokerage account
Step 2: Open the webApp or download the mobile application
Step 3: Make your initial deposit
Step 4: Buy or trade Cryptocurrencies
The Best Cryptocurrency Trading Platforms
There are many cryptocurrency brokerages and other platforms out there. Many of them will provide you with a cryptocurrency wallet, multiple methods of depositing FIAT currency, as well as a multitude of cryptocurrencies to invest in or buy. Let’s go over some cryptocurrency brokers below.
For Beginners
When it comes to beginners, cryptocurrency brokerages would ideally provide a simple user interface as well as educational content.
Coinbase
Coinbase is by far one of the largest cryptocurrency brokerages out there. It provides users with a variety of different cryptocurrency tokens and offers a service known as Coinbase Pro, which tries to list new cryptocurrency altcoins. Also, it has a low minimum deposit and is simple to use.
Robinhood
Robinhood has an account minimum of $0 which makes it extremely easy to get into, and it also provides free cryptocurrency trades. Its user interface is also streamlined, and anyone can get started easily.
For Day Traders (eToro, Kraken, Bittrex)
There are cryptocurrency brokerages specifically tailored toward day traders. Here are the best ones out there:
eToro
eToro is a cryptocurrency brokerage with a reputation for its low trading minimum, which starts at just £50, and has an innovative copy feature that lets you mirror other people's trades. The fees are between 0.75% and 2.9% and it offers a wide array of cryptocurrency tokens.
Kraken
Kraken offers a large number of crypto tokens as well as relevant educational content. It has a customizable ordering platform and a solid dedicated mobile application.
Bittrex
Bittrex has one of the quickest verification processes out there and offers features such as financial chart comparison tools alongside research-based analysis of financial markets.
Best for Earning Interest (BlockFi)
If you want to earn interest on your cryptocurrency tokens, you need to utilize platforms such as BlockFi. This is a brokerage that specializes in allowing you to earn interest on your cryptocurrency balance.
BlockFi
BlockFi offers you the ability to make commission-free trades at low spread rates.
It has no minimum account size requirement and offers instant trades as well as recurring trades. It is available in many countries, and users earn up to 7.5% per year.
What To Look For in a Cryptocurrency Broker?
Here are some features to look for in a brokerage:
Design and Ease of Use
Ideally, you need to find a cryptocurrency brokerage that has a simple user interface.
Fees & Commissions
Each cryptocurrency brokerage will have its own set of fees and commissions, and you will need to find one that suits your needs.
Reputation
Reputation can also play a major role. Ideally, seek a well-established brokerage with no concerns over security.
Cryptocurrency Pairs
You might be trading through cryptocurrency pairs, so ensure that the brokerage offers a wide variety of pairs.
Trading Options
Ensure that you find a brokerage that allows you access to as many different trading options as possible.
Should I Use Brokers to Buy and Sell Cryptocurrency?
The main advantage that you have whenever you use cryptocurrency brokerages to buy and sell cryptocurrencies is that they will almost always be available for you. This allows you the convenience of always having crypto to buy and having a location to sell them in an instant.
Final Thoughts on Cryptocurrency Brokers
Cryptocurrency brokerages will provide you with a higher level of convenience relative to other avenues. While this translates to higher fees, brokerages are well-regulated, and secure.
