Best online brokers for cryptocurrency trading in 2019

Cryptocurrency, especially bitcoin, has proven to be a popular trading vehicle, even if legendary investors such as Warren Buffett think it’s as good as worthless. Part of cryptocurrency’s popularity among traders is due to its volatility, since these swings allow traders to make money on the price moves.

For example, at the start of 2017, the price of bitcoin broke through the $1,000 barrier. By the end of the year, the digital currency had reached nearly $20,000. Nearly a year later, bitcoin was hovering around $3,200. But it sprung back to life in 2019, rising to more than $10,000.

It’s this kind of price movement that has attracted traders looking to ride the waves to profit. While some traders like to own the currency directly, others turn to the futures market. Futures may be an even more attractive way to play the volatility of digital currencies such as bitcoin, because they allow traders to use leverage to magnify their gains (but also magnify losses).

Commission: $2.25 per contract

Minimum: $25,000 for futures

Exclusive offer: 60 days of free trades and up to $600 cash, with qualifying deposit

E*Trade

E*Trade is reportedly planning to launch direct cryptocurrency trading, but traders can already get in on the action with bitcoin futures. The broker’s low account minimum of $500 means you can get started quickly, though any futures contracts will specify their own minimum margin requirements. And E*Trade’s wide selection of investment options – such as 4,400 no-transaction-fee mutual funds means that you can hold your whole portfolio here. Read more…

Commission: $2.50 per contract (for bitcoin futures)

Minimum: $500, futures margin depends on contract

Exclusive offer: Free trades plus up to $2,500 cash, with qualifying deposit

Interactive Brokers

Interactive Brokers allows you to buy bitcoin futures rather than owning the currency directly. And in this broker’s case, you can actually buy futures on two exchanges – the CBOE Futures Exchange or the Chicago Mercantile Exchange, with contracts costing $5 and $10, respectively. In addition, Interactive Brokers brings its full suite of investment offerings, so you can buy almost anything that trades on an exchange, though the account minimum is steeper than most.

Commission: $5 to $10 per contract, depending on the exchange

Minimum: $10,000

Exclusive offer: None

Charles Schwab

Charles Schwab is routinely one of Bankrate’s picks for top broker, and this investor-friendly company offers trading in bitcoin futures. Schwab also has no account minimum, but any futures contracts you trade will require some minimum margin to hold them open. Schwab offers an attractive commission of $1.50 per contract, and if you’re able to bring big money to the table, you’ll receive a welcome bonus of 500 free trades.

Commission: $1.50 per contract

Minimum: $0, futures margin depends on contract

Exclusive offer: 500 commission-free stock and options trades with $100,000 deposit

TradeStation

TradeStation announced in January 2019 that it was rolling out direct trading in cryptocurrency later in the year. Given the broker’s strong reputation for helping active investors and its favorable commission structure for high-volume traders, TradeStation will likely have a competitive platform for cryptocurrency, too. In the meantime, traders can buy and sell bitcoin futures as well as take advantage of substantial volume trading discounts.  Read more…

Commission: $1.50 per contract

Minimum: $500, futures margin depends on contract

Exclusive offer: None

Coinbase

Coinbase is a specialized cryptocurrency-focused platform that allows you to trade digital currencies directly, including bitcoin, ethereum, litecoin and bitcoin cash. In total, you’ll have access to more than a dozen cryptocurrencies. You’ll also be able to store your coins in a vault with time-delayed withdrawals for additional protection. The exchange’s commission structure is steep. It charges a spread mark-up of about 0.5 percent and adds a transaction fee depending on the size of the transaction and the funding source. Larger transactions will incur a 1.49 percent fee.

Commission: At least 1.99 percent of the transaction value

Minimum: $25

Exclusive offer: None

Bottom line

Whenever you’re selecting a broker, it’s important to consider all of your needs. And for new traders in cryptocurrency, you’ll want to figure out whether you want to own the currency directly or whether you want to trade futures (which offer higher reward, but also higher risk).

You’ll also need to consider whether you want to trade more than bitcoin, which is what the majority of traditional brokers restrict you to. If not, you may want to turn to a cryptocurrency exchange, since they offer more choice of tradable cryptocurrency.

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