New cryptocurrency brokerages are coming to the fore daily and the great demand and interest of crypto enthusiasts creates an equally high supply of such services. In an attempt to differentiate themselves and increase their client base, each brokerage tries to differentiate their offering as well, while each focusses on other aspects. Naturally then, different brokerages come with different strengths and the ensuing challenge is for you to take those strengths into account when attempting to discern which crypto broker best serves and suits your own particular needs, goals, aspirations, expectations and strategies as a crypto buyer or investor.
If you are after the ability to copy the trades of others and not having to wait until you learn enough before you can start your crypto trading journey, then you should choose a cryptocurrency brokerage offering copy trading services, while if you are seeking to invest in particular altcoins which are hard to come by, then you should shop around for brokerages offering the widest possible selection of digital currencies.
Thus, your specific needs as a crypto investor and crypto trader should be at core of your quest for the best crypto broker, which means that the best crypto broker for you is the one which best addresses those specific needs. Below you can consult a list of crypto brokers, which have been hand-picked for different reasons, adequately meeting the needs of different styles when it comes to trading and investing in cryptocurrencies.
The Best Crypto Brokers in 2021
Things we liked: Zero commission policy
Customers support is available 24/7
Up to 500:1 leverage
Low minimum deposit requirement
Things we didn't like: No demo account
TradeOr offers only one payment method – bitcoin
Things we liked: Up to 500:1 leverage
Low minimum deposit requirement
Things we didn't like: Absence of a direct telephone number for customer support
Ospreyfx is not a fully licensed and regulated broker
View All Forex Brokers
The main Advantages and Disadvantages of crypto trading
The trading and investing in cryptocurrencies often carry a considerable degree of risk, as digital currencies are extremely more volatile than other types of tradable assets. Thus, just as you stand to win big you also stand to lose big suddenly and without being able to predict this. When compared to trading in fiat currencies, crypto trading offers lower liquidity and minimal payment options. While these are clear disadvantages, as the usage of cryptos becomes more mainstream and their acceptance as a form of payment become widespread, the advantages for those holding or trading in cryptocurrencies are set to increase as time goes by.
To help you decide whether cryptos are your cup of tea, here’s a snap shot of the main pros and cons of crypto trading:
Advantages of crypto trading
Increased intrusion into one’s privacy is a major concern for those as it is considered an inescapable side-effect of technological advances. However, in the world of digital currencies there is an extremely high level of security of all user identities and all transactions performed. Despite the fact that the transaction themselves are very secure, hacking and other forms of cyber-criminal activity are still very real threats to crypto traders, who are vulnerable to such risks and attacks.
- Low transaction fees
Cryptocurrency transaction fees are generally quite low, in comparison to other transaction types, as in the crypto world there is no need for intermediaries, such as banks and financial institutions, to make a transaction possible. The elimination of intermediaries, lowers the associated costs and thus the fees charged.
One of the distinctive characteristics of cryptos is the absence of a central exchange or authority which oversees the market and transactions. This decentralized nature and the lack of an overarching authority or watchdog to control everything and set the rules is for many one of the biggest advantages of cryptocurrencies and blockchain technology, since it leaves ample room for freedom, initiative and innovation.
- High potential returns
Several examples from the performance of different digital currencies, such as Bitcoin or more recently Dogecoin, prove that the wise investment in digital currencies is a truly potentially lucrative endeavour that can yield very high returns for crypto investors. As the crypto world is on a constant course of further development and expansion, it is natural to expect that an investment in the right digital currency now, could very well translate into hefty future profits, as cryptos become more consolidated and popular.
Disadvantages of crypto trading
- Lower Acceptance
Though this is rapidly changing, the truth is that still digital currencies are not mainstream enough to be accepted as payment for goods and services in all countries and by all vendors and providers, as fiat currencies are. As more and more establishments begin to accept cryptos as a viable, alternative payments method, so will their public perception improve even further. Recent developments, such as the launching of several crypto debit and credit cards, will also push further into the consolidation of cryptos as a widely accepted, effective alternative to fiat currencies and a means to pay for everyday transactions.
- High Volatility
As already pointed out most if not all digital currencies are extremely volatile and thus carry the risk of leading to great losses. The trading and investing in any asset is risky by default, but with cryptos the inherent risks are even higher. This means that those with an aversion to risk and a low pain threshold, should completely avoid crypto trading. If you do decide to trade crypto, then try to remember never to trade using funds that you can’t afford to lose.
Contrary to what most may believe, cryptos are not tax exempt, since the approach taken by most tax auditors and watchdogs, especially in the developed world, is that virtual currency transactions are like any other transactions in any other form of property and are thus taxable. It would therefore be wise to check with your local tax authority about the specific tax principles applied to digital currency transactions in your country, before starting to invest in crypto.
- Illegal purposes
Though this is gradually fading away, especially since Know Your Customer compliance is a must for brokerages nowadays, cryptocurrencies were for a long time associated with illicit uses, and where the preferred means of transaction for illegal activities, such as money laundering, drug trafficking and others. This tarnish still remains and pushes many law abiding away from cryptos, though as they become mainstream such abuses are less common, especially since anonymity is no longer possible for most crypto transactions through established channels.
Crypto Brokers FAQs
What is The difference between a cryptocurrency broker and a crypto exchange
A cryptocurrency broker is a firm that is facilitating the buying and selling of cryptocurrencies at prices set by the broker
where as cryptocurrency exchanges provides an online platform for buyers and sellers who trade cryptocurrencies with each other based on current market prices and charging fees for their services.
What is the role of a cryptocurrency broker?
A cryptocurrency broker facilitates individual users to trade in cryptocurrencies by providing speculative contracts on the price of each digital currency featured on their tradable assets list. In your trading transactions and as prices shift, you can buy or sell these contracts and not the actual digital currency.
Which are the best cryptocurrency brokers to use?
As there is an abundance of brokerages offering cryptocurrencies trading services, there are plenty of reliable and reputable brokers to choose from when deciding to trade crypto. The best broker depends on your own specific priorities and needs, including which trading style you follow, which strategies you endorse and which coins you are specifically interested in, since you will have to make sure those are indeed included in the prospective broker’s tradable digital assets list.
What is more profitable, crypto or forex trading?
Cryptocurrency trading is consider to be more profitable than forex trading, although it’s not really a matter of profitability but rather liquidity and volatility when it comes to crypto vs forex. Cryptocurrency trading is more volatile which can mean a higher reward with a higher risk.
Is it better to trade crypto or Forex?
Answer depends entirely on your strategies, goals, and needs. Generally speaking, forex trading is more protected and stable, however, crypto trading can promise you larger returns than forex as it is much more volatile which can mean a higher reward with a higher risk.
Is Crypto trading riskier than Forex trading?
Historically, the cryptocurrency market is more unpredictable and volatile. Cryptocurrencies are consider to be very high-risk assets as unexpected changes in the market sentiment lead to sharp and sudden moves in price. Although crypto trading can promise you larger returns than forex trading it is very important that you do have an understanding regarding the risks before you start Crypto trading.