When the first cryptocurrencies were launched, you could only invest in them by buying them online via e-wallets such as Coinbase and Exodus. However, a few years ago digital currencies were introduced in the world of trading. Today, more brokers than ever before are offering cryptocurrencies as a part of their selection of assets.
The advantages of trading with cryptocurrency brokers compared to e-wallets are many. Firstly, it is completely unnecessary to buy coins or tokens in a digital currency unless you’re planning to use them as a payment method. Instead, it is much more practical to speculate on their prices.
Another reason is that many e-wallets are limited to one or two, maybe three currencies, while the best cryptocurrency brokers offer many more options. This means that you can trade with several currencies on the same platform, thus gaining more opportunities.
The last advantage is that you can use digital currency brokers to invest using different instruments and assets. At the moment, it is most common to trade cryptocurrencies as currency pairs and CFDs. Although, technically, you could also trade stocks in a company that handles cryptocurrencies.
As you can see, the possibilities are endless and the cryptocurrency market is growing every day. But how do you decide who to trade with? Which cryptocurrency brokers are legit? That is exactly what we will help you with on this page.
Find a Reliable Cryptocurrency Broker
When looking for a broker to trade digital currencies with there are a couple of things that you need to consider. But don’t worry, we’ll walk you through each step to help you with the process.
License and Regulation – Just like with any type of trading, it is very important that you use a broker for cryptocurrencies that is allowed to offer financial services in your country. The only way to make sure of this is to check the broker’s license and take a look at who regulates it. If you decide to use an unregulated broker you won’t have any protection, and you might end up getting ripped off.
All the cryptocurrency brokers that we recommend have an adequate license and are regulated by some of the toughest authorities in the industry.
Platform and Assets – The second step in your evaluation process is to find a broker that provides a platform that you like. It is also important that the assets that you want to trade with are available.
Different brokers provide different platforms that you can divide into two categories. The first type is proprietary platforms that have been developed by the cryptocurrency broker and are exclusive to their product. The second type of trading platforms are developed by a third party provider and are used by several brokers.
You also need to make sure that the asset or financial instrument that you are interested in is available. For example, if you want to trade Bitcoin and Ethereum as CFDs you need to find a broker that offers that possibility. If you would like to trade Litecoin with USD there are brokers for that too.
Selection of Cryptocurrencies – The last step of the process is making sure that the broker you’ve chosen provides access to the currencies you want to trade. Not all brokers have the same selection. Also, even if you’re only planning to trade Bitcoin right now, we recommend finding a broker that offers more digital currencies since your interest might grow over time. To learn more about what currencies you can trade, we recommend that you take a look at our detailed cryptocurrency broker reviews in the top menu under the tab “Cryptocurrency.”
The Best Cryptocurrency Brokers
To make the selection process as easy as possible for you, we have written detailed reviews of the best cryptocurrency brokers on the market. The list includes forex brokers and all other brokers that have decided to include digital currencies in their selection of assets. The list is quite long and we guarantee that there is a broker that will fit your specific needs.
However, if you feel like you don’t have the time to read reviews we can offer you a quick overview of the three best cryptocurrency brokers right now.
- Markets.com review – is, in our opinion, the best choice for anyone looking to trade digital currencies or forex trading. It is one of the most well-established brands on the market and their product is great. They also work with the industry leading MetaTrader 4 platform which is always a plus in our books. For all best forex brokers <- Follow the link.
- eToro review – is another leading broker on the market and they also provide the largest social trading network in the industry. eToro is a good broker for everyone looking for automatic trading and copy functions, as well as the possibility to discuss trading techniques with other traders.
- AvaTrade review – offers cryptocurrencies as CFDs and currency pairs and is one of our top choices. Their product is easy to adjust to your needs and they provide a good selection of different platforms for every situation.
- Plus500 Review – One of the big dogs, have also adopted to cryptocurrency trading very good and is one of the most attractive brokers for crypto trading. Offers a great product with a platform developed on their own. Offers most of the bigger cryptocurrencies.
- IQ Option Review – If we were to recommend one broker and one broker only then IQ Option would be our top pick for cryptocurrencies. Not only are they one of the best CFD-brokers but they also let you trade cryptocurrencies in the form of CFD Trading and traditional trading where you actually buy the coins and store them in their HODLY wallet.
- IG Markets review – This broker offers an extensive selection of assets from every imaginable asset class including cryptocurrencies such as Bitcoin and Ethereum. They have an award-winning trading platform, and the company behind the broker has been recognized as one of the leading financial firms in the UK.
- 24Option review – As one of the most recognizable names in the industry, 24Option has a reputation to uphold especially when it comes to innovation. This has pushed 24Option to constantly evolve, and adding cryptocurrencies to the selection in 2018 was a result of that ambition.
Difference Between a Cryptocurrency Broker and an Exchange or Wallet
What are there benefits of using a top cryptocurrency broker?
There are several reasons why someone would want to trade cryptocurrencies as CFDs instead of buying them on an exchange. The fact that you can invest without owning is something that many prefer because it makes it easier to day trade since you’re not actually holding the asset on your own. But there are more benefits than that, and we have outlined the most important below.
We assume that you have heard about cryptocurrency exchanges being hacked and hackers getting away with cryptocurrencies worth hundreds of millions of dollars. On the other hand, you’ve probably never heard of a CFD broker being robbed and there are two reasons for this.
All CFD brokers that we recommend are fully regulated and authorized. One of the most important rules that brokers have to comply with is providing world-class security, and nothing less. It is a broker’s duty to protect users and their funds. This makes them less prone to cyber attacks, and in the odd chance that one would happen, the brokers have the security systems needed to fight them off.
The second reason is that CFD brokers don’t actually sell assets but contracts representing the price of an asset. As long as customer funds are protected, there is nothing for a hacker to steal.
Leverage and Margin
Using leveraged assets to invest in cryptocurrencies creates opportunities to make more money from smaller market movements. Every CFD broker that we recommend offers leverage on cryptocurrencies, and that’s something you’ll never see at a cryptocurrency exchange.
When you use one of the best cryptocurrency brokers in the world, you will be able to apply leverage to your trades and increase your investment power, and why wouldn’t you want to do that?
When you buy your cryptocurrencies on an exchange or from a wallet, you’ll only make a profit when that coin increases in value. That’s pretty limiting – why can’t you profit off of decreasing prices?
You can if you use a CFD broker instead. When trading CFDs, it is your job to predict where the market is going. Will the price of Bitcoin increase or decrease? If you think the price will decrease you can easily short sell it and make a profit from decreasing trends. That’s pretty great and a feature that many cryptocurrency traders miss out on.
Charting Tools and Educational Material
Another difference between a top cryptocurrency broker and a leading cryptocurrency exchange is that all brokers offer analytic tools and educational material. Charting tools can be used to analyze the market and plan your investments. Today most exchanges don’t offer more tools than a regular price graph and for professional traders that isn’t enough.
Also, all of the cryptocurrency brokers that we recommend help to educate their customers in various ways. It can be anything from written guides and eBooks to detailed trading videos and webinars with some of the highest performers in the world.
If you ever get tired of trading cryptocurrencies or you’re interested in testing out another market, CFD brokers are an amazing option since they offer access to other assets as well. Don’t forget that the cryptocurrency market is a very young market and that brokers have been offering CFDs on stocks, commodities, and regular currencies for decades.
In our opinion, it’s always good to have access to variety and the opportunity to switch things up a bit, otherwise, the risk is that you fall into a routine with your trading.
Cryptocurrency Demo Accounts
Demo accounts are unheard of in the cryptocurrency industry. An exchange would never offer a free account with virtual money that customers could use to practice trading. However, all of the best cryptocurrency brokers in the world offer demo accounts.
It is easy to set up a cryptocurrency demo account, and it can be used by beginners that need to practice and experienced traders looking to get better without risking their own money. To us, it’s an awesome feature that really sets the best cryptocurrency brokers apart from the cryptocurrency exchanges.
Last Couple of Words About Cryptocurrency Brokers
Unless you are looking to use your cryptocurrencies as means of payment, investing on exchanges is unnecessary. A cryptocurrency broker just offers so many more opportunities that most exchanges and wallets feel obsolete in comparison.
Although, the best way of using a cryptocurrency broker could be in combination with an exchange or wallet. That would allow you to hodl your favorite coins as long-term investments while you spend your days day trading digital assets with one of the best cryptocurrency brokers in the world.
In the end, the choice is yours but remember that if you ever want to start trading cryptocurrencies, you need to sign up with one of the brokers listed on this page.