Since its inception, cryptocurrencies have seen quite a boom, with some early investors making significant gains, while those who bought at the peak have yet to fully recover from their losses. The digital coins have sparked much debate in the investment industry about their investment merits and viability, with legendary investors such as Warren Buffett saying that cryptocurrencies are essentially worthless.
Over the past few years we have seen a wave of both positive and negative news for the crypto industry. Crypto exchange FTX collapsed and top executives were charged with crimes, while other exchanges including Binance and Coinbase were charged by the Securities and Exchange Commission. Still, the SEC approved several spot Bitcoin ETFs in early 2024, giving traders a simple structure to buy and sell the world’s largest cryptocurrency.
While some traders like to own the currency directly, others turn to the futures market. Futures can be an even more attractive way to play the volatility of digital currencies like Bitcoin, as they allow traders to use leverage to amplify their profits (but also magnify losses). But futures carry a lot more risk in exchange for that potentially higher reward.
Where you can buy and sell cryptocurrencies
- Traditional brokers: Brokers typically don’t offer direct trading in Bitcoin, only futures, but you do have access to a wide choice of other securities and can often buy Bitcoin ETFs commission-free.
- Crypto exchanges: Specialized crypto exchanges offer the widest range of cryptocurrencies besides Bitcoin and the other most popular coins. You can also own the currencies directly.
- Payment services: Some payment services, such as Cash App and PayPal, also allow users to buy and sell the most popular cryptocurrencies.
Here are the best brokers for cryptocurrency trading, including traditional online brokers, as well as new specialist cryptocurrency exchanges. You may also want to check out which brokers offer the best bonuses for opening an account to determine where you can get some extras.
Overview: Best brokers for cryptocurrency trading in May 2024
Robin Hood
Robinhood is a great option to buy cryptocurrency directly. You can also take advantage of Robinhood’s wildly popular trading commissions: $0 per trade, or commission-free, although you’ll still pay a built-in spread markup on each trade. And if you’re into more than just cryptocurrency, you can continue trading stocks and ETFs at the same low price. Robinhood’s slick app makes trading so easy, although those looking for a complete trading experience will be disappointed.
- Commission: $0, but built-in spread markup
- Minimum account: $0
Interactive real estate agents
Interactive Brokers lets you trade four cryptocurrencies through Paxos Trust Company and Zero Hash, including Bitcoin and Ethereum, for some of the lowest commissions on the market. Customers can also access 24/7 crypto trading through a companion app at Paxos. Additionally, IB allows you to buy Bitcoin and Ethereum futures instead of owning the currency directly. And in the case of this broker, you can buy Bitcoin futures on the Chicago Mercantile Exchange, with contracts costing $5 at five coins per contract or Ethereum contracts for $3 at 50 coins per contract. Furthermore, Interactive Brokers brings its full suite of investment offerings so you can buy almost anything traded on an exchange.
- Commission: 0.12-0.18 percent of the trade value; $5 per Bitcoin futures contract
- Minimum account: $0
Webul
While Webull may be less known than its rival commission-free trading app Robinhood, it offers investors a solid offering, including cryptocurrency trading. While you don’t pay any commission on crypto trades (or stocks and ETFs), Webull does charge a spread markup of 100 basis points (1 percent of the price) on both sides of a trade. There are several cryptocurrencies available for trading, including Bitcoin, Ethereum and Dogecoin. Charting tools and an impressive mobile app make Webull a broker worth considering.
- Commission: $0, but built-in 1 percent spread charge
- Minimum account: $1 to trade crypto
TradeStation
Traders have a number of options with this broker, which has rolled out direct cryptocurrency trading through TradeStation Crypto, with a built-in spread markup. The spread markup does not exceed 1 percent of the trade value, whether you are buying or selling. Traders can also buy and sell Bitcoin futures.
- Commission: $0, but built-in spread markup of more than 1 percent
- Minimum account: $0, but the futures margin depends on the contract
Binance.US
Binance is a specialized trading platform that allows you to buy and sell digital currencies, including the biggest ones like Bitcoin and Ethereum, as well as hundreds of other much smaller coins. In total you have access to more than 300 cryptocurrencies. The commission structure at Binance is low and only gets cheaper the more you trade. Trading fees start at 0.57 percent of your trade value (i.e. $57 for every $10,000 traded) and decrease from there depending on your trading volume over the previous 30 days. However, Bitcoin trading is free here.
Binance’s finances came under scrutiny in 2023 following the collapse of FTX. The accounting firm used by Binance to verify its reserves stopped working for all crypto clients and the Securities and Exchange Commission (SEC) said investors should be wary of audits of crypto firms. According to the Wall Street Journal, none of the four major accounting firms are willing to work with Binance.
The SEC sued Binance in June 2023, alleging it had illegally operated as an exchange, broker-dealer and clearing agency and had offered and sold unregistered securities. The lawsuit also accused Binance and its founder, Changpeng Zhao, of misusing customer funds. SEC Chairman Gary Gensler warned investors against using Binance platforms. Binance said its customers’ assets are safe.
- Commission: 0.57 percent of the transaction value or less, while Bitcoin trading is free
- Minimum account: $0
Coin base
Coinbase is a specialized platform focused on cryptocurrency that allows you to directly trade digital currencies including Bitcoin, Ethereum, Solana and Tether. In total you have access to more than 200 cryptocurrencies. You can also store your coins in a vault with delayed withdrawals for extra protection. The commission structure of the exchange is steep. It charges a spread markup of around 0.5 percent and adds transaction fees depending on the size of the trade and the funding source, although the Advanced Trade platform does not charge a spread.
The SEC charged Coinbase in June 2023, alleging it illegally operated as an exchange, broker-dealer and clearing agency, and offered and sold unregistered securities. According to the lawsuit, Coinbase knowingly violated securities laws designed to protect investors. Coinbase said it would continue operations as usual.
- Commission: Fees start at 0.6 percent on Advanced Trade
- Minimum account: $0
Cracking
Kraken is a cryptocurrency exchange that allows you to trade over 200 different digital currencies such as Bitcoin and Ethereum, as well as emerging currencies such as Cardano and Solana. When using the Kraken Pro level, initial trading fees range from 0.16 percent to 0.26 percent and then drop quickly based on your trading volume over 30 days. Kraken is not yet available to residents of New York and Washington State.
- Commission: At Kraken Pro, costs start at 0.26 percent
- Minimum account: $1
Charles Schwab
Charles Schwab is routinely one of Bankrate’s favorite top brokers, and this investor-friendly company offers trading in Bitcoin futures. Schwab also has no account minimum, but any futures contracts you trade require a minimum margin to keep them open. Schwab offers an attractive commission of $2.25 per contract, and if you can put a lot of money on the table, you will also receive a welcome bonus.
- Commission: $2.25 per contract
- Minimum account: $0, futures margin depends on the contract
Delicious trade
Tastetrade is a relatively newer player in the brokerage world, offering attractive prices for cryptocurrency transactions, powered by partner Zero Hash. Tastetrade charges 1 percent of the trade value when buying and selling, but only up to $10 per side of the trade. So once you trade over $1,000 your crypto commissions are right at a sawhorse here. However, there are only four crypto coins available to trade here. You can also buy crypto futures for $1.25 per contract at the open and close.
- Commission: 1 percent of trade value on buying and selling, up to $10 per leg. Futures contracts for $1.25 when buying and selling
- Minimum account: $0
Frequently asked questions about cryptocurrency
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Cryptocurrency is a type of digital currency intended as a medium of exchange, but so far it has mainly been used by traders who buy and sell the digital coins in the hope of making a profit. Some think cryptocurrency can act as an inflation hedge because it doesn’t involve a central bank that can print more money.
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Cryptocurrency can be bought and sold through traditional brokers, crypto exchanges or certain payment services such as PayPal. In early 2024, the SEC approved spot Bitcoin ETFs that hold Bitcoin directly, giving traders a familiar structure to bet on the price of the largest cryptocurrency.
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Bitcoin is by far the largest cryptocurrency in the world and will represent approximately half of the entire global crypto market in March 2024, according to CoinMarketCap. Ethereum, Tether, BNB and Solana round out the top five largest cryptocurrencies.
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Cryptocurrencies are highly speculative assets that have seen significant price fluctuations since their inception. Unlike stocks, bonds, real estate and other traditional investments, cryptocurrencies do not generate cash flows or income for their owners, making their fundamental value difficult, if not impossible, to calculate. The digital currencies also face an uncertain regulatory future as countries evaluate how best to handle digital assets.
In short
When selecting a real estate agent, it is important to consider all your needs. And for new cryptocurrency traders, you’ll want to figure out whether you want to own the virtual currency outright or whether you want to trade futures, which offer higher reward but also higher risk. If you want to get started trading cryptocurrency, here are the most important things you need to know.
You should also consider whether you want to trade beyond Bitcoin, which most traditional brokers limit you to. If not, you can turn to a cryptocurrency exchange as they offer more choice of tradable cryptocurrencies.
