Crypto
Best Online Brokers for Buying and Selling Cryptocurrency in September 2023 | FilmInk
Today, there are thousands of brokerage platforms online. They allow investors to trade their fiat currencies for cryptos like Bitcoin and Ethereum.
Whether you are just a crypto enthusiast or a seasoned investor, the broker you use is paramount to your success in the crypto industry. In this guide, we walk you through some of the best brokers and cryptocurrency exchanges online in 2023.
Where Can You Buy and Sell Cryptocurrencies?
There are two major ways to buy and sell cryptos online, and they are: through a cryptocurrency exchange platform or an online brokerage platform. While these two are often used interchangeably, there is a slight difference between them. Before we delve into the reviews of the best online brokers, let’s understand how these two work.
Cryptocurrency Exchanges
Cryptocurrency exchange platforms are web-based services that act as intermediaries between cryptocurrency sellers and buyers. They offer an extensive range of cryptocurrencies and trading pairs, making them ideal for traders looking to explore diverse assets. These exchanges also provide advanced trading features like limit orders, stop-loss orders, and chart analysis tools. However, note that not all exchanges offer access to traditional assets like stocks or commodities. Some examples of cryptocurrency exchanges are Binance, Independent Reserve, Coinbase, Kraken, etc.
Some advantages of using a Bitcoin exchange platform for buying and selling Bitcoin, and other cryptocurrencies are:
- Wide Range of Cryptocurrencies: A cryptocurrency exchange typically offers a wide selection of cryptocurrencies and trading pairs. This diversity allows traders to access various digital assets from major cryptocurrencies like Bitcoin and Ethereum to smaller altcoins.
- Higher Liquidity: Cryptocurrency exchanges tend to have higher liquidity due to the numerous trading pairs and a more extensive user base.
- Crypto-to-Crypto Trading: Exchange platforms primarily facilitate crypto-to-crypto trading. This means you can trade one cryptocurrency for another instead of using fiat currencies like USD, AUD, or EUR.
- Ownership of Cryptocurrencies: When you buy cryptocurrencies on a Bitcoin exchange platform, you have the option to transfer them to your private wallet for increased security.
Online Brokerage Platforms
Brokerage platforms, on the other hand, are online services that allow investors to trade their fiat currencies for a wide range of assets like ETFs, stocks, and cryptocurrencies. They are distinct for having user-friendly interfaces, making them accessible to newcomers. However, compared to cryptocurrency-only exchanges, the selection of cryptocurrencies on brokerage platforms may be more limited. Some examples of brokerage platforms include eToro, Robinhood, etc.
Some advantages of using online brokerage platforms for trading cryptocurrencies are:
- Fractional Trading: Many brokerage platforms offer fractional trading which allows you to invest in cryptocurrencies with smaller amounts of money. If you are a beginner looking for a less risky way to invest in crypto, you’ll find this feature appealing.
- Access to Traditional Assets: One of the distinctive features of brokerage platforms is their integration of cryptocurrency trading with traditional assets like stocks, ETFs, and commodities. It allows you to diversify your investment portfolio.
- Educational Resources: Many brokerage platforms offer educational resources, tutorials, and news updates to help users understand cryptocurrencies and make informed decisions.
- No Trading Fees: Some brokerage platforms offer commission-free trading, which is great if you want to avoid trading fees.
Overview: Best Brokers for Cryptocurrency Trading in 2023
Now, let’s review the best online brokers for cryptocurrency trading in 2023, considering factors such as security, fees, available assets, and user experience:
1. eToro
eToro is a popular online brokerage platform known for its social trading features. It offers a wide range of cryptocurrencies for trading, allowing you to diversify your portfolio. One of its distinct features is CopyTrader, which lets you replicate the trades of experienced investors.
Pros
- It is user-friendly.
- Offers community support
- Offers a broad selection of assets.
Con
- Higher fees compared to some exchanges.
2. Robinhood
Robinhood is renowned for being a user-friendly and commission-free trading platform. It offers investors a streamlined experience for trading cryptocurrencies and traditional assets with its most distinct feature being the fractional trading option. This feature allows you to invest in smaller amounts.
Pros
- No trading fees
- Intuitive interface
- Access to traditional financial markets.
Con
- Limited selection of cryptocurrencies and wallet functionality.
3. Interactive Brokers
Interactive Brokers is an online brokerage platform that offers both crypto investment options and traditional assets like stocks, options, futures, EFPs, futures options, forex, bonds, and funds.
Pros
- Wide range of investment options
- Powerful trading tools
- Long-standing reputation.
Con
- May have a steeper learning curve for beginners.
4. SoFi Invest
SoFi Invest is an all-in-one financial platform that offers access to cryptocurrency, stock, loans, and other financial services.
Pros
- Beginner-friendly platform.
- Offers a holistic approach to investing.
- No trading fees
Cons
- Limited selection of cryptocurrencies.
- Higher spreads.
5. Webull
Webull is a trading platform known for its active trading community. It has expanded to offer cryptocurrency trading alongside traditional assets. Some of its features include technical analysis tools and a paper trading simulator.
Pros
- No trading fees
- Trading community
- Offers educational resources.
Con
- Does not support transfers to external wallets.
6. IG
IG is a global brokerage with a presence in various countries. It provides access to cryptocurrency CFDs (Contracts for Difference) for speculative trading.
Pros
- Accessible in many regions.
- Diverse asset offerings.
Con
- CFD trading involves risk and no ownership of underlying assets.
7. Plus500
Plus500 is another platform that offers cryptocurrency CFD trading. It focuses on simplicity and ease of use for traders by offering risk management features, no trading fees, and a user-friendly site.
Pros
- User-friendly
- Risk management features
- No trading fees.
Con
- Not accessible in several regions.
Conclusion
Choosing the right online broker is pivotal to your cryptocurrency trading success. Each of the platforms mentioned above offers unique trading features, and caters to different preferences, from social trading to commission-free options and access to traditional assets. Ensure that you take into account your investment goals, trading experience, and other personal preferences to be able to choose the best platform.