Best Crypto Brokers in 2021
Trading cryptocurrencies like Bitcoin and Ripple can be terrifying at first. We are constantly hearing about crypto scams and how people lost their hard-earnt money to fraudsters. There can be no denying this – it does happen and will continue to happen – but we must remember that not every cryptocurrency broker is a scammer that is waiting to rip you off; there are some great, reputable crypto brokers to trade with.
This guide will explain what crypto trading is, how it works, what to look out for and we also compare some of the leading cryptocurrency brokers that are available if you wish to trade crypto.
Compare Leading Crypto Brokers and Trading Platforms:
|Broker||Official Site||Max. Leverage||Regulations||Min. Deposit||Spreads From||Review|
|500:1||$100||From 0 pips|
|500:1||$200||From 0.1 pips|
|400:1||$100||From 0.9 pips|
|400:1||$100||From 0.5 pips|
Quick Guide: How Do You Trade Cryptocurrency?
If you are interested in exploring the cryptocurrency trading boom, then here is a quick guide to get you started.
1. Own or Speculate?
First, you will need to decide if you want to own the cryptocurrency or if you just want to speculate on it. This decision will dictate where you next need to go..
If you are wanting to buy and own cryptocurrency, you will need to go to an exchange to purchase some. However, if you are simply wanting to speculate on the price movement of a crypto, then you will need a CFD broker – some are listed above.
2. Apply for an Account
Once you know what you want to do (own vs. speculate), you can apply for an account with an exchange or broker. Once your account is successfully open, you will be ready for the next step.
3. Fund Your Account
This part is self-explanatory – once your account is open, you are ready to fund the account so you can begin to trade/ invest.
4. Buy or Trade Cryptocurrencies
Now that your account is funded, you are ready to start trading cryptocurrency.
Depending on step one above, you are now free to buy & own crypto via an exchange or to pace trades via a CFD crypto platform.
How Do You Find The Best Cryptocurrency Brokers?
Finding a great crypto broker that fits your trading requirements is one of the most important decisions you will need to make. But with so many options to choose from how do you compare crypto brokers to find the best one?
Here are some of the critical factors to consider.
How much does it cost to trade?
All crypto brokers will charge you to trade on their trading platform so your job is to find out what they will charge you for and how much. Look out for some of these common crypto CFD charges:
- Overnight financing/ “swaps”
The best way to make a fair comparison is to ask a couple of brokers this question; “how much will you charge me to make a 1 x CFD unit trade on Bitcoin?“. A customer service representative should be able to answer the above question very quickly and if they cannot, you probably need to look elsewhere.
In our experience and research, most crypto brokers do not charge a commission to trade crypto CFDs; they just charge you the spread. We would say the cheapest crypto brokers are probably TD365.com and Pepperstone.
We will be blunt – you should only ever trade with a regulated crypto broker otherwise your money is at risk, simple as that.
Trading with a regulated broker means that you are trading with a broker that has been approved by a Government body, in charge of that jurisdiction’s financial markets.
Look for a broker that is regulated by a tier-one regulatory body like the FCA or ASIC, for instance.
Range of cryptos to trade
Always check that your broker of choice actually offers the crypto markets (or other markets) that you wish to trade. Not all CFD brokers offer cryptocurrencies and those that do may only offer a couple so please do you research before committing to one broker.
Trading platform & app
You should always test drive a few different trading platforms before committing to one. Quite a few brokers offer the popular MT4 system, however many other brokers also have their own, in-house built trading platforms and apps. See what you like as they all differ!
Ease of depositing & withdrawing
Funding and/ or withdrawing funds from your crypto CFD account must be quick, fast and straightforward. Look for a broker that offers multiple methods to fund and withdraw your money, and one that does it quickly – you should not need to wait weeks and weeks to get your money back!
Some Risks of Trading Cryptocurrencies
Trading cryptos is extremely risky – they are highly volatile assets and you can lose a lot of money very quickly. Think about that before you put your hard-earnt cash into a trading account! It is estimated that around 70-80% of people lose money online trading.
Complexity and Confusion
Trading CFDs, whether they be cryptocurrencies or other assets, are complicated and at times, very confusing to understand, particularly if you are a beginner. Do not take these trading products (CFDs) lightly and always test your skills on a demo account before committing to a live trading environment where your money is at risk.
Your Mental State
Online trading can be extremely stressful and may start to effect your mental health. If that is the case, you must stop trading immediately and seek some professional assistance if necessary. Nothing is worth sacrificing your mental health so please bear this one in mind and take it very seriously.
Crypto Trading Example – Buying Bitcoin CFDs:
- You have been following the price of Bitcoin, decide it is undervalued and therefore believe it will rise in value.
- The current price of Bitcoin is USD $50k.
- You login to your CFD account and enter a BUY trade of 1 Bitcoin CFD
- The margin required for this trade is USD $10k (20% margin rate x Bitcoin price of $50k).
- You have $22k in your trading account so have adequate margin to cover this trade.
- Your CFD broker quotes you a bid/offer price of $49,090 – $50,010 (the $20 difference is the spread) and you buy at $50,010.
- Three days later the price of Bitcoin is $53,000 and you decide to cash out your profit.
- You have made $2,900 on this trade ($53,000 – $50,010 x 1 unit)!!