Top 5 Cryptocurrency Brokers – Which Broker is Best?

Top 5 Cryptocurrency Brokers – Which Broker is Best?

Whether you’re a newbie trader looking to invest in digital

currencies for the first time, or a seasoned professional in the hunt for a more competitive platform, cryptocurrency brokers are in their hundreds. Although this allows you to choose a broker that best meets your needs, knowing which platform to sign up with is no easy feat.

In this article, we discuss the best five cryptocurrency brokers currently in the UK market. We also explore the many factors that you need to look out for when choosing a new broker – such as regulation, fees, spreads, customer support, and payment methods.

Note: Cryptocurrency brokers still operate largely unregulated in the UK. With that said, if you’re looking to invest in cryptocurrencies via CFD products, brokers will often hold a license with the FCA or CySEC.

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    What is a Cryptocurrency Broker?

    In a nutshell, a cryptocurrency broker is an online brokerage platform that allows you to buy and sell popular digital currencies like Bitcoin, Ethereum, and Ripple. The process operates much the same as a traditional stockbroker, insofar that you will need to open an account, deposit funds, and decide which asset you wish to invest in. You will then need to determine how much you want to invest, and the broker will facilitate the purchase on your behalf.

    With that being said, there are two types of cryptocurrency brokers active in the online space, and the one that you opt for will depend on your personal requirements. This consists of a cryptocurrency broker that allows you to purchase digital currencies in their truest form, meaning that you will need to then store your coins in a private wallet.

    Alternatively, some traders prefer to use cryptocurrency brokers that facilitate CFD products. This allows you to invest in cryptocurrencies without owning the underlying asset, meaning that you do not need to worry about storage. Moreover, CFD brokers allow you to short cryptocurrencies, so you can speculate that the value of the asset will go down.

    In a similar nature to traditional brokers, you will need to pay a fee to invest in cryptocurrencies. This usually comes in the form of a commission, which is calculated against the value of your investment. You need to pay this at both ends of your trade. If using a CFD cryptocurrency broker, then you will likely be able to trade on a commission-free basis. You will, however, need to pay a fee in the form of the spread.

    Pros and Cons of Cryptocurrency Brokers

    The Pros

    • Gives you access to the multi-billion pound cryptocurrency scene
    • Heaps of everyday payment methods supported
    • Ability to short cryptocurrencies via CFDs
    • Cryptocurrency brokers operate on a 24/7 basis
    • Leading platforms allow you to verify your identity in minutes
    • Investment fees are becoming more and more competitive
    • Some cryptocurrency brokers are regulated by the FCA

    The Cons

    • Cryptocurrencies are a high-risk asset class
    • A number of brokers have been hacked in recent years
    • Some cryptocurrency brokers operate in an unregulated manner

    Types of Cryptocurrency Brokers

    There are two types of cryptocurrency brokers active in the UK space – brokers that allow you to own cryptocurrencies 100% outright, and brokers that facilitate cryptocurrency investments via CFDs.

    Below we explain how the two broker-types differ.

    🥇 Own Cryptocurrencies Outright

    If you’re looking to invest in popular cryptocurrencies like Bitcoin, and you wish to own the asset 100% outright, then you will need to use a specialist cryptocurrency broker. The overarching concept is that you will personally take ownership of the coins and thus – you will need to store them in a private wallet.  This comes with both its pros and cons.

    On the one hand, by storing the coins in a private wallet, they will always remain in your possession no matter what. As such, you are not susceptible to a broker collapse. On the other hand, storing the coins yourself does come with its risks. This is because bad actors have the capacity to hack private wallets remotely when the user has failed to install security safeguards.

    Crucially, the safest way to store your coins is to keep them in a hardware wallet, not least because it is never connected to the internet. This does make the process of transferring the coins out somewhat cumbersome, although this is the trade-off that you need to make when owning cryptocurrencies outright.

    🥇 Investing With a Cryptocurrency CFD Broker

    The second options available to you is to use a cryptocurrency CFD broker. As is the case with other CFD products like stocks, indices, and commodities, you will not own the underlying cryptocurrency asset. Instead, you are merely speculating on which way the markets will go.

    For example, if you like the look of Bitcoin and think that it is due to increase in value over the coming days or weeks, CFDs are a great way to facilitate this. Crucially, CFDs allow you to invest in Bitcoin cheaply and quickly. Moreover, CFDs give you the option of applying leverage, as well as engage in short-selling.

    Regarding the former, this means that you can invest more than you have in your account. And the latter – this is where you speculate on the value of a cryptocurrency going down. A further benefit of using a CFD cryptocurrency broker is that platforms are often regulated by the UK’s FCA or CySEC in Cyprus.

    What Payment Methods do Cryptocurrency Brokers Support?

    In a time not so long ago, buying cryptocurrencies with real-world money was a  difficult task, not least because brokers were unable to get the required green light from payment issuers. This meant that you would need to transfer cash to an unregulated broker – many of whom were nothing more than a scam.

    However, with the cryptocurrency industry now a multi-billion pound marketplace, there are heaps of cryptocurrency brokers that support everyday payment methods. This includes the likes of:

    🥇 Visa

    🥇 MasterCard

    🥇 Maestro

    🥇 Paypal

    🥇 Skrill

    🥇 Neteller

    🥇 Local Bank Transfer

    🥇 International Wire

    As we discuss in the next section, cryptocurrencies brokers will sometimes charge you a fee when depositing and withdrawing funds. Furthermore, it’s likely that you will need to meet a minimum deposit amount.

    Cryptocurrency Broker Fees

    Cryptocurrency brokers are in the business of making money, so there is a range of fees that you need to made aware of prior to making an investment. The specific fees will vary from broker-to-broker, so be sure to check this yourself.

    Deposit and Withdrawal Fees

    Whether or not you need to pay any deposit and withdrawal fees will depend on two things – the broker and the type of the payment method that you wish to use.

    For example, some of the brokers that we recommend on this page allow you to deposit funds for free, although they typically charge a very small withdrawal method.

    Brokers that do charge a payment fee will usually do this on a percentage basis. For example, if the cryptocurrency broker charges 4% to deposit funds with a debit card, and you wish to deposit £1,000, you will pay a fee of £40.

    Trading Commissions

    Some cryptocurrency brokers will charge you a trading commission when you make an investment. If they do, this will be charged at both ends of the trade. Moreover, this is typically calculated as a percentage against the amount you invest.

    For example:

    • Let’s say that the cryptocurrency broker charges a 1% trading commission
    • You want to buy £500 worth of Bitcoin
    • You will be charged a commission of £5 (1% of £500)
    • You want to sell your Bitcoin when it is worth £750
    • You will be charged a commission of £7.50 (1% of £750)

    As you can see from the above example, you will need to pay a commission when you initially invest in a cryptocurrency, as well as when you decide to sell.

    Spreads

    The spread is only relevant if you plan to use a cryptocurrency broker that specializes in CFDs. For those unaware, the spread is the difference between the buy and sell price, so it’s a fee that you pay indirectly.

    For example:

    • You use a cryptocurrency CFD broker to invest in Bitcoin
    • The ‘buy’ price of Bitcoin is $10,000
    • The ‘sell’ price of Bitcoin is $10,100
    • The difference between the two prices amounts to 1%
    • This means that you need to make at least 1% in gains to break even

    Essentially, you’ll want to use a broker that offers super-tight spreads, as this will help keep your trading costs to a minimum.

    Note: The vast majority of cryptocurrency CFD brokers allow you to trade on a commission-free basis. As such, the only fee that you need to pay is the spread.

    Supported Digital Currencies at Cryptocurrency Brokers

    Although the vast majority of first-time investors seek to buy Bitcoin, there are now thousands of other cryptocurrencies active in the market. Commonly referred to as ‘alt-coins’, these are much more volatile than Bitcoin, and they suffer from much lower levels of liquidity.

    Alt-coins also come with more risk than Bitcoin. On the flip side,  alt-coins have a greater upside potential. Nevertheless, although listing each and every digital currency that cryptocurrency brokers support is beyond the remit of this article, below you’ll find the most commonly traded coins in the space.

    🥇Bitcoin

    🥇 Ethereum

    🥇 Ripple

    🥇 Bitcoin Cash

    🥇 Stellar Lumens

    🥇 Cardano

    🥇 Monero

    🥇 Litecoin

    🥇 EOS

    🥇 Binance Coin

    Short-Selling Cryptocurrencies

    Short-selling refers to the process of speculating that an asset will go down in value. For example, if you think that Bitcoin is currently overvalued and thus – it’s price will go down in the coming weeks, you would need to short-sell the asset.

    The only way that you can do this is to use a cryptocurrency broker that specializes in CFDs. The process works largely the same as making a standard market investment, but in reverse. In other words, you will initially need to place a sell order, and then a buy order when you decide to exit your trade.

    Check out the example below of how a short-sell investment would work at a cryptocurrency broker.

    • You’re not a fan of Bitcoin, so you decide to use a CFD broker to short-sell the asset
    • Bitcoin is currently priced at £5,000 per coin
    • You place a ‘sell’ order at a total stake of £1,000
    • A few days later, Bitcoin begins to tank in the markets and it is now worth £4,000 per coin
    • This represents a reduction in value of 20%
    • You decide to lock-in your profits, so you then place a ‘buy’ order to exit the trade
    • You made a total of £200 in profit, based on 20% of your £1,000 stake

    Leverage at Cryptocurrency Brokers

    Do you have a higher tolerance for risk and wish to apply leverage on your cryptocurrency trades? If so, you’re in luck, as there are now dozens of cryptocurrency brokers active in the online space that allow you to apply leverage. Once again, you will need to use a CFD broker for this.

    If you’re based in the UK, you might be bound by the regulations imposed by the European Securities and Markets Authority (ESMA). If you are, this means that you will be capped to leverage of 2:1 when trading cryptocurrencies. The limits are in place to protect non-professional investors from large losses.

    • At leverage of 2:1, you can trade twice the amount that you have in your account
    • So, a balance of £500 would allow you to buy or sell £1,000 worth of cryptocurrencies
    • If your trade goes down by more than 50% (1/2), your trade will be liquidated
    • This means that you would lose your entire £500 margin

    If leverage of 2:1 is not sufficient for your trading needs, you will need to consider a cryptocurrency derivative broker like Crypto Rocket. Such brokers operate in an unregulated manner, so you do need to tread with caution. If you do take the plunge, you can trade cryptocurrencies with leverage of up to 500:1, which is huge.

    • At leverage of 500:1, you can invest 500 times more than you have in your cryptocurrency broker account
    • So, a balance of £500 would allow you to buy or sell £250,000 worth of cryptocurrencies
    • This would amplify your gains by 500x
    • However, if your trade goes down by more than 0.2% (1/500), your trade will be liquidated.

    Note: Leverage is a high-risk trading tool that should be avoided if you are a newbie investor. This is especially the case in a cryptocurrency industry that is accustomed to high volatility.

    Are Cryptocurrency Brokers Safe?

    You’ve likely heard horror stories of cryptocurrency brokers getting hacked, with clients subsequently losing their entire balance. While a number of brokers have previously covered these losses, many haven’t. The overarching concern is that much of the cryptocurrency broker space operates unregulated.

    As such, you’ve got nowhere to turn if things go wrong. The good news is that some brokers do actually hold a license with the UK’s FCA or CySEC in Cyprus. Others also hold a license with ASIC in Australia, meaning you’ll have regulatory oversight on multiple fronts.

    With that being said, we would suggest making the following considerations when choosing a new cryptocurrency broker to ensure your funds remain safe.

    🥇 Cold Storage: If you’re using a traditional cryptocurrency broker that allows you to purchase and own digital coins outright, then you should check whether or not the platform utilizes cold storage. This is where the funds are stored offline, so the chances of an external hack are virtually non-existent.

    🥇 Two-Factor Authentication: Two-factor authentication (2FA) provides an extra layer of security on your brokerage account. In a nutshell, you will be required to enter a unique code that is sent to your mobile phone every time you perform a key account function. Crucially, this includes logging in and withdrawing funds.

    🥇 Multi-Sig Wallets: If the cryptocurrency broker utilizes multi-sig wallets, this means that multiple signatures are required for the platform to process withdrawals. Once again, this acts as a major safeguard against third-party hackers

    🥇 Encrypted Data: If you are planning to deposit funds with a traditional debit or credit card, then you need to ensure that the broker’s website encrypts data. This will prevent your card details from getting into the wrong hands.

    How to use a Cryptocurrency Exchange: Step-by-Step Guide

    So now that you know the ins and outs of how cryptocurrency brokers operate, we are now going to discuss the end-to-end investment process. By following the step-by-step guidelines outlined below, you’ll be able to invest at a cryptocurrency broker within minutes.

    Step 1: Choose a Cryptocurrency Broker

    Your first port of call will be to choose a cryptocurrency broker that best meets your needs. You’ll need to consider key factors such as whether you want to buy cryptocurrencies or invest in CFDs, as well as fees, payment methods, customer support, and spreads.

    We would suggest reviewing the section below on how to choose a cryptocurrency broker if you need further assistance. If you don’t have time to research a cryptocurrency broker yourself, why not consider the merits of one of the pre-vetted platforms listed on this page?

    Step 2: Open an Account

    Regardless of whether you are using a traditional broker or a CFD platform, you will need to open an account. The amount of information collected from you will depend on the type of cryptocurrency broker that you opt for.

    With that said, if you’re looking to deposit funds with real-world money, then this will likely include the following:

    • First and Last Name
    • Home Address
    • Nationality
    • Date of Birth
    • Contact Details

    Step 3: Verify Your Identity

    You will now need to verify your identity. This is to ensure that the broker remains compliant with its license issuer, as well as domestic laws on anti-money laundering.

    The process requires you to upload a clear copy of your government-issued ID (passport or driver’s license) and a proof of address. This should be a bank statement or utility bill that is dated within the last three months.

    Step 4: Deposit Funds

    Once you’ve had your account verified by the cryptocurrency broker, you’ll need to deposit some funds. The specific payment method available to you will depend on the broker, although this usually includes a debit/credit card or bank transfer.

    Some brokers also support e-wallets like Paypal and Skrill. Unless you are using a bank transfer, all other deposit methods are instant.

    Step 5: Invest in Your Chosen Cryptocurrency

    You are now ready to make a cryptocurrency investment. You will first need to choose the specific cryptocurrency that you want to buy (Bitcoin, Ethereum, etc.) and then enter the amount that you wish to invest.

    There is no requirement to purchase a whole Bitcoin, so you can buy as little as you like – as long as you meet the broker’s minimum investment amount. The funds will then be debited from your cash balance, and you’ll see the cryptocurrencies added to your account.

    Note: The process of investing at a CFD cryptocurrency broker remains largely the same, albeit, you won’t need to follow the step below on withdrawing your coins out. This is because the coins do not exist, as you are merely speculating on the asset’s future price.

    Step 6: Withdraw Coins From the Cryptocurrency Broker

    You will now need to withdraw your newly purchased cryptocurrency coins out of the broker. Although most platforms allow you to store your coins on the broker’s website, we would strongly advise against this. Crucially, if the broker was hacked by a malicious third-party, you stand the risk of having your coins stolen.

    As such, you should withdraw your coins to a private cryptocurrency wallet. To do this, head over to your wallet and copy your wallet address. Elect to make a withdrawal at the broker by pasting in your wallet address and entering the amount that you wish to cash out. The coins should arrive in your wallet within 1 hour – depending on how long the broker takes to process it.

    How to Choose a Cryptocurrency Broker?

    Before signing up with a cryptocurrency broker, we would suggest asking the following five questions.

    ✔️ Is the cryptocurrency broker regulated?

    ✔️ Does the cryptocurrency broker support your preferred payment method?

    ✔️ What deposit, withdrawal, and trading fees does the cryptocurrency broker charge?

    ✔️ Does the broker allow you to purchase Bitcoin outright, or are you investing in CFDs?

    ✔️ Does the cryptocurrency broker list your preferred digital currencies – such as Bitcoin and Ethereum?

    Top 5 Cryptocurrency Brokers – Which Broker is Best?

    So now that you have a firm grasp of what you need to look out for in a cryptocurrency broker, we are now going to list our top five platforms of 2020. All of these brokers have been pre-vetted by our team of in-house reviewers, so rest assured that the following platforms meet our strict criteria.

    1. Skilling – Best All-Round Trading Platform of 2020

    Launched in 2019, Skilling has emerged to become one of the best trading platforms in the industry. The provider is regulated by CySEC and strictly confirms to their stringent codes of practice. Skilling focuses on forex, along with other financial instruments such as stocks, indices, and commodities.

    Both the trading platform and app have simple features, making it suitable for beginners and professionals. If you are new to trading, the Skilling Trade Assistant can help you with resources and guides.

    With over 800 different instruments, Skilling allows you to speculate with a low initial investment of just $100. The signup process is simple, fast, and straightforward.

    L2T Rating

    • Trade with leverage
    • Super-competitive fees
    • Heaps of supported payment methods
    • Relatively new in the brokerage scene
    75% of retail investors lose money when trading CFDs with this provider

    2. Capital.com – Zero Commissions and Ultra-Low Spreads

    Capital.com is an FCA-regulated online broker that offers heaps of financial instruments. All in the form of CFDs - this covers stocks, indices, commodities, and even cryptocurrencies. You will not pay a single penny in commission, and spreads are super-tight. Leverage facilities are also on offer - fully in-line with ESMA limits.

    Once again, this stands at 1:30 on majors and 1:20 on minors and exotics. If you are based outside of Europe or you are deemed to be a professional client, you will get even higher limits. Getting money into Capital.com is also a breeze - as the platform supports debit/credit cards, e-wallets, and bank account transfers. Best of all, you can get started with just 20 £/$.

    Our Rating

    • Zero commissions on all assets
    • Super-tight spreads
    • FCA regulated
    82.61% of retail investors lose money when trading CFDs with this provider

    3. eToro – Best Cryptocurrency Broker for Beginners

    If you're a complete newbie in the world of cryptocurrency investments, then we would suggest checking out eToro. The platform is super easy to use, and you can open an account in a matter of minutes.

    Supported payment methods include debit/credit cards, e-wallets, and a local bank transfer. The platform is regulated by the UK's FCA, CySEC (Cyprus) and ASIC (Australia).

    You'll be able to buy cryptocurrencies 100% outright at eToro, although you can't withdraw your coins to a private wallet. If you want to apply leverage or short-sell cryptocurrencies, the platform also hsts CFDs.

    Our Rating

    • Supports multiple payment methods including e-wallets
    • No trading fees other than the spread
    • Fast registration and KYC process
    • Unable to withdraw coins into a private wallet
    75% of retail investors lose money when trading CFDs with this provider

    4. AVATrade – 2 x $200 Forex Welcome Bonuses

    The team at AVATrade are now offering a huge 20% forex bonus of up to $10,000. This means that you will need to deposit $50,000 to get the maximum bonus allocation. Take note, you'll need to deposit a minimum of $100 to get the bonus, and your account needs to be verified before the funds are credited. In terms of withdrawing the bonus out, you'll get $1 for every 0.1 lot that you trade.

    Our Rating

    • 20% welcome bonus of upto $10,000
    • Minimum deposit $100
    • Verify your account before the bonus is credited
    75% of retail investors lose money when trading CFDs with this provider

    5. EuropeFX – Great Fees and Several FX Trading Platforms

    As the name suggests, EuropeFX is a specialist forex broker. With that said, the platform also supports CFDs in the form of shares, indices, cryptocurrencies, and commodities. You will be able to trade via MT4, so you can choose from desktop software, or a mobile/tablet application. If you want to trade via your standard web browser, the broker also offers its own native platform - EuroTrader 2.0. In terms of fees, EuropeFX offers super-tight spreads on major pairs. Your money is safe at all times, not least because the broker is authorized and licensed by CySEC.

    Our Rating

    • MT4 and native trading platforms
    • Super-low spreads
    • Great reputation and licensed by CySEC
    • Premium account has a minimum deposit of 1,000 EUR

    82.61% of retail investors lose money when trading CFDs with this provider

    Conclusion

    In summary, there are now hundreds of cryptocurrency brokers operate in the online space – with the vast majority of them servicing UK clients. By reading our guide in full, you should now have the required tools to choose a broker that best meets your needs.

    This includes key metrics like regulation, commissions, payment methods, and leverage. With that said, we have also listed our top five cryptocurrency brokers of 2020. If you don’t have the time to perform your own research, we would, therefore, suggest using one of our recommended platforms.

     

    LongHornFX – Best Forex Trading Platform

    Our Rating

    • UK traders our chosen broker is Alvexo
    • Super-low commissions and tight spreads
    • Trade forex, crypto, commodities, and indices
    • Fully supported by MetaTrader 4

     

     

    FAQs

    What is a cryptocurrency broker?

    A cryptocurrency broker is a third-party platform that allows you to buy and sell leading digital currencies like Bitcoin and Ethereum.

    What is the minimum deposit at a cryptocurrency broker?

    Minimum deposit amounts will vary from broker-to-broker, so you need to check this before opening an account. Some brokers allow you to deposit super-low amounts, while others will ask for £200 or more.

    What fees do cryptocurrency brokers charge?

    This will vary depending on the type of broker you use. If using a CFD broker, you likely won't pay any deposit or withdrawal fees, nor will you pay any commissions. If you're looking to purchase cryptocurrencies outright, you will need to pay a deposit fee and a trading commission.

    Are cryptocurrency brokers regulated?

    Not always. In fact, much of the industry operates unregulated. However, those selling cryptocurrency CFD products are required to hold a license from the FCA if serving UK clients.

    What payment methods do cryptocurrency brokers support?

    Cryptocurrency brokers often give you the option of depositing funds with a debit/credit card, e-wallet, or bank transfer.

    Do cryptocurrency brokers allow you to apply leverage?

    If you want to buy and sell cryptocurrency pairs on leverage, you will need to use a CFD broker or a crypto-derivative platform. If opting for the former, you'll be capped to leverage of 2:1 with UK brokers.

    Can I short-sell cryptocurrencies at an online broker?

    You can short-sell cryptocurrencies with ease when using a CFD broker.

    Author : Samantha Forlow

    Samantha Forlow

    Samantha is a UK-based researcher and writer that specializes in all-things finance. This covers everything from traditional equity and fund investments, to forex and CFD trading. Samantha has been writing financial-based content for several years and has a variety of publications in the online domain. Crucially, she is able to explain complex financial subjects in a newbie-friendly manner.