Cryptocurrencies have experienced significant fluctuations since their inception, with early investors reaping substantial profits, while those who purchased at market peaks continue to struggle with their losses. The emergence of digital currencies has ignited considerable discussion within the investment community regarding their value and potential as an investment, with prominent figures like Warren Buffett asserting that cryptocurrencies lack intrinsic worth.
In recent years, the crypto sector has been subject to a mix of favorable and unfavorable developments. The collapse of the crypto exchange FTX led to criminal charges against its top executives, while other platforms, including Binance and Coinbase, faced scrutiny from the Securities and Exchange Commission. Nevertheless, the SEC granted approval for several spot Bitcoin ETFs in early 2024, providing traders with a straightforward mechanism to engage in transactions involving the largest cryptocurrency.
While some investors prefer to hold the currency directly, others opt for the futures market. Futures contracts may present an even more appealing option for capitalizing on the volatility of digital currencies like Bitcoin, as they enable traders to employ leverage to enhance their potential gains, albeit at the risk of amplifying losses. However, trading futures entails significantly greater risk in pursuit of potentially higher rewards.
Platform for the purchase and sale of cryptocurrencies.
- Traditional brokers: Typically, traditional brokers do not provide direct trading options for Bitcoin, focusing instead on futures contracts. However, they do offer a diverse range of other securities, and many allow for commission-free purchases of Bitcoin ETFs.
- Crypto exchanges: Dedicated cryptocurrency exchanges present the most extensive selection of cryptocurrencies, extending beyond Bitcoin and other widely recognized coins. These platforms enable users to hold the currencies directly.
- Payment services: Certain payment platforms, including Cash App and PayPal, facilitate the buying and selling of popular cryptocurrencies for their users.
The following are the leading brokers for cryptocurrency trading, encompassing both conventional online brokers and newly established specialized cryptocurrency exchanges. Additionally, it may be beneficial to explore which brokers provide the most attractive bonuses for account openings, as this could offer additional advantages.
Overview: Top brokers for cryptocurrency trading in November 2024.
Robinhood
Robinhood presents an excellent choice for purchasing cryptocurrency directly. Users can benefit from Robinhood’s highly favored trading structure, which features $0 per trade, or commission-free transactions; however, it is important to note that a built-in spread markup will apply to all trades. Additionally, for those interested in more than just cryptocurrency, the platform offers stock and ETF trading at the same minimal cost. While Robinhood’s user-friendly application simplifies the trading process, individuals seeking a comprehensive trading experience may find it lacking.
Commission: $0, with a built-in spread markup
Account minimum: $0.
Interactive Brokers
Interactive Brokers provides the opportunity to trade four cryptocurrencies via Paxos Trust Company and Zero Hash, including Bitcoin and Ethereum, at some of the most competitive commission rates available. Clients can engage in cryptocurrency trading around the clock through a dedicated app linked to Paxos. Furthermore, Interactive Brokers offers the option to trade Bitcoin and Ethereum futures instead of directly purchasing the cryptocurrencies. Specifically, clients can trade Bitcoin futures on the Chicago Mercantile Exchange, with contracts priced at $5 for five coins per contract, and Ethereum contracts available for $3 at 50 coins per contract. Additionally, Interactive Brokers offers a comprehensive range of investment products, enabling clients to purchase nearly any asset that is traded on an exchange.
Commission: 0.12-0.18 percent of trade value; $5 per Bitcoin futures contract
Account minimum: $0.
Webull
Webull, while not as widely recognized as its competitor Robinhood, offers a robust platform for investors that includes the option to trade cryptocurrencies. Users can execute trades in cryptocurrencies, stocks, and ETFs without incurring commission fees; however, Webull does implement a spread markup of 100 basis points (1 percent of the transaction price) on both sides of a trade. The platform supports a variety of cryptocurrencies, such as Bitcoin, Ethereum, and Dogecoin. With advanced charting tools and a highly rated mobile application, Webull presents itself as a broker that merits consideration.
Commission: $0, with a built-in spread markup of 1 percent
Account minimum: $1 for cryptocurrency trading.
Binance.US
Binance is a dedicated trading platform that facilitates the buying and selling of digital currencies, encompassing major cryptocurrencies such as Bitcoin and Ethereum, as well as a wide array of smaller altcoins. Users can access over 300 different cryptocurrencies in total. The fee structure at Binance is competitive, with trading costs starting at 0.57 percent of the transaction value (equating to $57 for every $10,000 traded), which decreases based on the trading volume over the preceding 30 days. Notably, trading Bitcoin incurs no fees.
In 2022, Binance’s financial practices faced increased scrutiny following the downfall of FTX. The accounting firm responsible for verifying Binance’s reserves suspended its services for all cryptocurrency clients, and the Securities and Exchange Commission (SEC) cautioned investors regarding the reliability of audits conducted on crypto firms. According to the Wall Street Journal, none of the major accounting firms are currently willing to engage with Binance.
In June 2023, the SEC filed a lawsuit against Binance, claiming that the platform had unlawfully operated as an exchange, broker-dealer, and clearing agency while offering and selling unregistered securities. The lawsuit further alleged that Binance and its founder, Changpeng Zhao, had misappropriated customer funds. SEC Chair Gary Gensler advised investors to exercise caution when using Binance’s services. In response, Binance asserted that the assets of its customers remain secure.
Commission: A fee of 0.57 percent of the transaction value or less applies, and Bitcoin trading is available at no expense.
Account minimum: $0.
Coinbase
Coinbase is a dedicated platform for cryptocurrency trading, enabling users to engage in transactions with various digital currencies, such as Bitcoin, Ethereum, Solana, and Tether. Users can access over 200 different cryptocurrencies on this platform. Additionally, there is an option to securely store coins in a vault that features time-delayed withdrawals for enhanced security. However, the exchange’s fee structure is relatively high, imposing a spread markup of approximately 0.5 percent along with a transaction fee that varies based on the transaction size and funding source; it is worth noting that the Advanced Trade platform does not apply a spread.
In June 2023, the SEC filed a lawsuit against Coinbase, claiming that the company had unlawfully operated as an exchange, broker-dealer, and clearing agency while also offering and selling unregistered securities. The lawsuit asserted that Coinbase was aware of its violations of securities laws intended to safeguard investors. In response, Coinbase stated its intention to continue its operations without interruption.
Commission: Fees begin at 0.6 percent on Advanced Trade
Account minimum: $0.
Kraken
Kraken operates as a cryptocurrency exchange, facilitating the trading of over 200 digital currencies, including established options like Bitcoin and Ethereum, alongside newer entrants such as Cardano and Solana. For users utilizing the Kraken Pro tier, the initial trading fees are set between 0.16 percent and 0.26 percent, with a rapid decrease in fees contingent upon the trading volume over a 30-day period. It is essential to highlight that Kraken is presently not accessible to individuals residing in New York and Washington state.
Commission: At Kraken Pro, fees commence at 0.26 percent.
Account minimum: $1.
Charles Schwab
Charles Schwab consistently ranks among Bankrate’s top brokerage selections, known for its investor-centric approach and the availability of Bitcoin futures trading. The firm imposes no minimum account balance; however, trading futures contracts necessitates maintaining a minimum margin. Schwab charges a competitive commission of $2.25 for each contract, and clients who invest substantial amounts may also qualify for a welcome bonus.
Commission: $2.25 per contract
Account minimum: $0, futures margin varies by contract.
Tastytrade
Tastytrade is a relatively recent entrant in the brokerage industry, providing appealing pricing for cryptocurrency transactions facilitated by its partner, Zero Hash. While Tastytrade does not impose a commission fee, it incorporates a built-in markup of 0.35 percent for each trade. It is important to note that only four cryptocurrencies are available for trading on this platform. Additionally, users can engage in crypto futures trading at a rate of $1.25 per contract for both opening and closing transactions.
Commission: No commission, but a built-in markup of 0.35 percent. Futures contracts priced at $1.25 for buying and selling.
Account minimum: $0.
Bottom line
When selecting a broker, it is essential to evaluate all of your requirements. For novice traders in the cryptocurrency market, it is crucial to determine whether you prefer to own the virtual currency directly or engage in futures trading, which presents the potential for greater rewards but also entails increased risks. If you are interested in commencing cryptocurrency trading, here are the fundamental aspects you should be aware of.
Additionally, you should assess whether you wish to trade cryptocurrencies beyond Bitcoin, as most conventional brokers limit you to this option. If your interest extends to a broader range of cryptocurrencies, you might consider utilizing a cryptocurrency exchange, which provides a wider selection of tradable digital assets.
