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Best Cryptocurrency Brokers in 2020

Thinking about investing in cryptocurrency as an alternative to traditional assets? We’ll explain everything you need to know and highlight the best cryptocurrency brokers in 2020.
michaelgraw
Author: michaelgraw
Last Updated: May 25, 2020

Cryptocurrency is a relatively new type of asset, but also one of the most popular investment today. Digital currencies are free of a lot of the regulations that tie down traditional assets and currencies. Plus, high volatility means that traders have tremendous opportunities for profit when trading cryptocurrencies. 

If you’re thinking about making the leap to investing in digital currency, you need a trustworthy cryptocurrency broker. In this guide, we’ll highlight the three best crypto brokers and explain what you need to look for when choosing the best bitcoin broker.

On this Page:

    Our Recommended Crypto Exchange for 2020

    Crypto Exchange
    • 15+ Cryptos Available
    • Trade Stocks, Forex, Crypto and more
    • Only $200 Minimum Deposit
    • Accepts Paypal
    Crypto Exchange
    75% of investors lose money when trading CFDs.

    How to Trade Cryptocurrency in 3 Quick Steps

    Step 1: Create an Account

    eToro Best Broker for Buying Gilead Stock

    Open a free trading account with our recommended broker. As part of the registration process, you will be required to submit your personal details for KYC.

    Step 2: Deposit Funds

    wallet

    Once you have completed the registration and your account has been approved, you can transfer funds to your account by one of the provided payment methods.

    Step 3: Demo and Live Trading

    Fund your account

    Begin trading on a demo account. A demo account allows you to trade in real-time but also learn about the mechanics of Crypto trading and understand basic terms.

    eToro: 75% of investors lose money when trading CFDs.

    Owning Cryptocurrency vs. CFDs

    Before we dive into the best brokers for trading cryptocurrency, it’s important to realize that there is more than one way to trade and invest in digital coins. You can buy and sell cryptocurrencies directly, just like you could buy and sell stocks in the traditional stock market, and, you can also deal with contracts for differences or futures contracts, which allow you to speculate on the price of a digital coin without actually owning that coin.

    So, is one type of trading better than the other? It depends on your goals as a trader.

    Many traders prefer trading CFDs over actual currency because these contracts are more flexible. You can speculate on the price of a coin falling or rising, which you can’t easily do at most brokerages if you own the coin itself.

    Another benefit of trading CFDs is that most brokerages allow you to use high leverages, which means that you can multiply the effective value of the cash you’re trading with. For example, at 10:1 leverage, you can buy $100 worth of Bitcoin with just $10 in your trading account. You can’t do that if you’re buying Bitcoin itself. 

    Finally, for traders who are new to the cryptocurrency world, CFDs can just be simpler to get started with. You don’t need to set up a digital wallet like you would when trading digital currencies directly.

    However, trading CFDs does come with some drawbacks. The most significant is that fees from your brokerage can be high, especially if you’re holding leveraged contracts overnight. In that case, you’re essentially taking out a loan from your brokerage, and you’ll be charged high-interest fees in return. If you want to hold a currency for months or years to come because you believe in its future potential, you’ll likely end up saving money by buying and selling the coin itself rather than trading CFDs.

    Some cryptocurrency brokers offer both direct currency trades and CFDs, while others offer only one or the other.

    Best Cryptocurrency Brokers in 2020

    1. eToro - Best for Direct Cryptocurrency Investing

    eToro stands out among cryptocurrency brokers because it offers both direct buying and selling of cryptocurrencies and also CFD trades. That gives you flexibility to trade CFDs for short-term positions and to buy and hold digital coins that you want to keep for the long term. eToro offers its own digital wallet to keep track of your coins and allows you to trade 16 of the most popular cryptocurrencies.

    Another thing that sets eToro apart is that it offers social trading. You can follow successful traders on the platform and easily copy their positions with just a click. This is a great way to learn new trading strategies or to profit by copying traders with proven track records. You can also see platform-wide discussions about popular coins to help determine if their price will likely go up or down.

    The only downside to using eToro for trading cryptocurrencies is that the platform doesn’t offer a ton of research tools. There is a built-in charting platform, but it’s not all that rigorous if you want to build a strategy around technical analysis. It’s also difficult to automate your trades with eToro.

    • Number of Cryptocurrencies: 16
    • Direct Trading or CFDs: Both
    • Research Tools: Yes
    • Demo Account: Yes
    • Account Minimum: $50

    Our Rating

    • CFDs and Direct Investing: Good for short-term and long-term positions
    • Social Trading: Copy positions from successful traders
    • Variety of Coins: Trade 16 of the most popular cryptocurrencies
    • Weak Charting Tools: Not ideal for technical analysis
    • No Automation: Cannot build an automated trading strategy
    eToro: 75% of investors lose money when trading CFDs.

    2. Plus500 - For Trading Cryptocurrency through CFDs

    Plus500 allow the trading of cryptocurrency through CFDs rather than digital assets themselves. The platform offers contracts for 13 different cryptocurrencies, plus a Bitcoin-Ethereum blend that gives you exposure to price changes in the two most popular digital coins.

    Better yet, Plus500 allows you to trade crypto CFDs with up to 30:1 leverage. That means you can take significant stakes in a position without tying up a huge sum of money. If conditions force you to hold contracts overnight, Plus500 has some of the most reasonable fees that we’ve seen.

    Where Plus500 falls short is in its research tools. This broker has its own proprietary charting software, but it includes very few technical studies. There also aren’t any social trading features within Plus500 to help you develop an opinion around new cryptocurrencies. The platform is user-friendly, but more suitable for experienced investors.

    • Number of Cryptocurrencies: 13
    • Direct Trading or CFDs: CFDs
    • Research Tools: Yes
    • Demo Account: Yes
    • Account Minimum: $100

    OUR RATING

    • 30:1 Leverage: Free up your money for other trades
    • Low Fees: Holding leveraged positions doesn’t cost a fortune
    • Bitcoin-Ethereum Blend: Develop trades based on two cryptocurrencies
    • Limited Charting: Built-in charts don’t come with many technical studies
    • CFDs Only: You cannot buy digital coins directly with Plus500
    CFDs are complex financial instruments and 80.5% of retail investor accounts lose money when trading CFDs.

    3. CryptoRocket - Best for Variety of Cryptocurrencies

    CryptoRocket hosts about 37 cryptocurrencies, which is far more than you’ll be able to trade with just about any other broker. If you want to dive into trading some of the less popular and more volatile digital coins currently on the market, this is the broker you need. But, keep in mind that CryptoRocket only trades CFDs and doesn’t allow you to buy and sell these coins directly. The upside of this is that you get access to high leverages of up to 500:1.

    This broker also stands out for hosting its accounts on MetaTrader 4, one of the most versatile trading platforms available today. On the platform, you get access to dozens of technical studies and drawing tools that help you research currencies. MetaTrader 4, also allows you to automate a trading strategy if you develop a successful formula.

    For trading cryptocurrency, there’s almost nothing to dislike about CryptoRocket. It is user-friendly while also offering the tools that advanced traders need. The only limitation is that CryptoRocket only has a limited number of forex and commodity CFDs, and this limits your portfolio diversification options.

    • Number of Cryptocurrencies: 37
    • Direct Trading or CFDs: CFDs
    • Research Tools: Yes
    • Demo Account: Yes
    • Account Minimum: $50

    Our Rating

    • Diversity of Coins: Trade any of 37 cryptocurrencies
    • Huge Leverage: Up to 500:1 for Bitcoin
    • Technical Analysis: Accounts come with MetaTrader 4
    • Limited to Crypto: Not many forex and commodity CFD options
    • CFDs Only: Cannot buy and sell coins directly with CryptoRocket

    What Should You Look for in a Cryptocurrency Broker?

    Here are some of the factors you should put into consideration when choosing an online crypto broker:

    Currencies Available

    One of the most obvious ways in which cryptocurrency brokers differ is in the number of supported cryptocurrencies that they offer for trading.

    A number of traditional stockbrokers now offer Bitcoin futures trading, but that hardly qualifies them as cryptocurrency brokers. Most quality crypto brokers offer at least a dozen of the most popular coins, including Bitcoin, Ethereum, Litecoin, Ripple, and Bitcoin Cash. Brokerages like CryptoRocket offer an impressive 36 coins to trade.

    Best Cryptocurrency Brokers | Learnbonds

    If you can’t find the cryptocurrency you want to trade at a brokerage, you’ll need to go through a cryptocurrency exchange instead. This is often much more complex and expensive, as you need to convert dollars to Bitcoin, and then Bitcoin to your desired currency. For currencies with low liquidity, it can be extremely difficult to exit a trade.

    Leverage

    Leverage is a powerful tool for increasing your effective profits with just a small initial investment. With the 500:1 leverage offered at trading platforms like CryptoRocket, for example, you can buy $25,000 worth of Bitcoin with your $50 minimum deposit. For aggressive traders, having access to more leverage can allow you to make bigger bets with less money.

    But, be careful that leverage cuts both ways. It also dramatically increases your risk, since every change in the price of a coin has a multiplicative effect on the value of your position. You’ll also need to watch out for interest fees if you hold leveraged positions overnight.

    Spreads

    The spread is the difference between what you pay for a coin or CFD and what the seller receives in return. This is one of the key ways that cryptocurrency brokers make money, especially when they don’t charge commissions on trades since they effectively pocket the spread.

    Best Cryptocurrency Brokers | Learnbonds

    When looking for a broker, it’s important to compare the spread to the cost of the asset in percentage terms. Higher spreads eat into your profits.

    Fees

    Unfortunately, the spread isn’t the only fee charged by most cryptocurrency brokers. Some charge commissions on every trade, while others charge inactivity fees if you don’t place a trade more than once every few months.

    The fees you’ll most want to watch out for, especially if trading cryptocurrency CFDs with leverage, are overnight fees. When you hold a leveraged position overnight, your brokerage will charge you interest on the money you’re borrowing as part of your leveraged position.

    Research Tools

    Having access to in-depth research tools is essential to succeeding as a trader. Charting software enables you to trade based on technical triggers rather than gut feelings, as well as helps you develop rigorous strategies for profiting. Some platforms, like MetaTrader 4, can also be used to automate your trades. 

    Best Cryptocurrency Brokers | Learnbonds

    Demo Account

    Another tool that many cryptocurrency brokers provide to help you succeed is a demo account. This allows you to place simulated trades without risking real money. Using a demo account allows you to develop a trading strategy and prove that it’s consistently profitable before you put your money on the line. All of the cryptocurrency brokers we recommended come with demo accounts.

    Deposit Methods

    Finally, take a look at what deposit methods a prospective broker offers. Most brokers will take deposits by bank transfer or credit card. But, if you want to pay for your cryptocurrency trading with cryptocurrency, your options may be more limited. 

    Conclusion

    Finding the right cryptocurrency broker can make a huge difference in your success as a trader. The best broker should put the research tools you need at your disposal, keep trading fees low, and offer leverage to enable you to make big bets. On top of that, you need a trader that offers direct cryptocurrency trading, CFD trading, or both depending on your trading goals.

    Thanks to this guide, you now have recommendations for three high-quality cryptocurrency brokers and a better idea of what to look for when choosing the one that’s right for you.

    Our Recommended Crypto Exchange for 2020

    Crypto Exchange
    • 15+ Cryptos Available
    • Trade Stocks, Forex, Crypto and more
    • Only $200 Minimum Deposit
    • Accepts Paypal
    Crypto Exchange
    75% of investors lose money when trading CFDs.

    Glossary Of Cryptocurrency Terms

    Dollar sack and a stack of coins showing hedge fund performance | Hedge Fund, Learnbonds
    Fiat

    Fiat, also referred to as paper money is a currency with no intrinsic value but whose value is established by the creator, in most cases the government. It may also gain its value from agreements arrived at by parties exchanging it. Examples include the USD, EURO and GBP.

    Illsutration on a Bitcoin Coin | Bitcoin Learnbonds
    Bitcoin

    Bitcoin is the world’s first and most popular cryptocurrency. It runs on the bitcoin blockchain as a decentralized currency under no control from any central bank or authority and is transferred on a user-to-user basis on the peer-to-peer network.

    Cryptocurrency Glossary
    Ethereum

    Ethereum is a global and decentralized blockchain where users can transfer and exchange value. Besides being a platform for exchanging value, Ethereum enables smart contract functionality and allows developers from anywhere in the world to build decentralized applications - a new kind of applications that cannot be censored or controlled by any single entity, on its network.

    Cryptocurrency Glossary
    Litecoin

    Litecoin is a cryptocurrency and a blockchain inspired by and modeled after Bitcoin. The idea behind Litecoin was to have faster and cheaper transactions as compared to the Bitcoin network. Litecoin was an early adopter of SegWit, a technology that aims to solve the scalability problem of Bitcoin by facilitating faster transactions.

    Depiction of a values of coin going up or down illustrating value investing | Learnbonds
    Exchange

    The crypto exchange is an online platform where crypto traders and investors alike get to trade and exchange different cryptocurrencies for other cryptocurrencies, fiat currencies or other financial and non-financial products.

    green dollar sack |Cash ISA Learnbonds
    Crypto wallet

    A cryptocurrency wallet is a device, software program, physical medium, or service that stores private and public keys and enables users to transfer, receive, spend, store, and check the balance of their cryptocurrency funds. A crypto wallet is to cryptocurrency what a bank is to Fiat.

    Cryptocurrency Glossary
    Bitcoin Mining

    Bitcoin mining is the process by which Bitcoin transactions are verified and confirmed before being added to the Bitcoin blockchain. Mining is done by dedicated miners via the use of powerful, specialized computers called ASICs (application-specific integrated circuits). Verification of transactions is done via a common consensus without the need for a central authority.

    Depiction of grrowing stacks of coins illustrating fixed income rates | Learnbonds
    Market cap

    In crypto trading market capitalization refers to the market value of all the cryptocurrencies available in the market today. Its value is arrived at by multiplying the value of the crypto by the number of its kind in circulation. The market cap rises and falls from time to time depending on the value of the currency.

    Depiction of a values of coin going up or down illustrating value investing | Learnbonds
    Circulating supply

    The circulating supply of a cryptocurrency refers to the number of a given cryptocurrency or tokens that are publicly available and circulating in the market between buyers and sellers.

    Cryptocurrency Glossary
    Blockchain

    A blockchain is a decentralized list of records commonly referred to as blocks that are linked together via a cryptographic technology that makes the transactions recorded therein tamper-proof.

    FAQs

    Do traditional stock brokers offer cryptocurrency trading?

    A growing number of traditional stock brokerages are offering cryptocurrency trading in a limited form. In most cases, this means only offering Bitcoin futures for trading or restricting you to trading only several of the most popular digital coins.

    How do cryptocurrency brokers make money?

    Cryptocurrency brokers primarily make money off the spread, which is the price difference between what you pay for an asset and what it’s being sold for. Many brokers also charge fees for holding leveraged CFDs overnight, for rolling over CFDs into new contracts, and for inactivity in your account for several months. Don’t assume that a broker is inexpensive just because it does not charge trading commissions.

    Can I buy cryptocurrencies that aren’t offered through a broker?

    If the cryptocurrency you want to purchase isn’t offered through a broker, you can often buy it directly. However, to do this, you’ll need to first convert dollars to Bitcoin using a cryptocurrency exchange, and then trade Bitcoin to get your desired currency. This is a complex process and your risk is extremely high when trading digital currencies like this.

    How do cryptocurrency wallets work and do I need one?

    When you buy cryptocurrencies directly through your broker, they’re held in a digital wallet. This is essentially a piece of software that keeps track of how many coins of each digital currency you have, and that is encrypted so that it can only be accessed with your password. At most cryptocurrency brokers, your broker also has access to your wallet so that assets can be bought and sold more smoothly.

    Our Full Range of Cryptocurrency Resources – Cryptocurrency A-Z

    Cryptocurrency A-Z
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    All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
    michaelgraw

    Michael is a writer covering finance, new markets, and business services in the US and UK. His work has been published in leading online outlets and magazines.

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