There is the difference between cryptocurrency exchanges (Poloniex,Coinbase, Bitfinex) and cryptocurrency brokers. The major difference between brokers and exchanges is that with brokers you are actually trading a CFD(Contract For Difference), most of the time. On the cryptocurrency exchanges, traders and investors can really buy a cryptocurrency. One of the advantages of trading cryptocurrencies through brokers is that the security of your funds is very high. Most crypto investors/traders still trade with exchanges directly, and we can ask the question “do we need a broker”?. Most exchanges were not built for the beginners, their customer support is not always available, crypto exchanges have also fallen victim to cyber attacks. All of this facts support the trading with reliable brokers. When choosing a broker, always check history and reviews to make sure their performance is consistent. Checking the reviews is something you should always do.
It can be difficult to choose the best cryptocurrency broker, here are a few key points that are very important:
- Regulation – Each country has its own regulatory body and traders should always open accounts with regulated firms. This is also important due to potential safety concerns regarding the deposit.
- Account Types – choose a Broker that offers customizability, competitive spreads and easy deposits/withdrawals. A good broker should always allow you to deposit funds and withdraw your earnings whenever you feel like it.
- Customer Service – choose a Broker with 24 hrs a day support. Give a call or message to the customer service center and check their availability and find out the representative’s ability to answer questions. Brokers should be there helping with accounts and technical support when you need them the most.
- Platform Type – look for a platform that’s easy to use with advanced analytical and technical tools. Some Brokers offer unique tools to make your trading that much simpler.
Cryptocurrency trading has been supported by a number of brokers already but in 2017 you can see the explosion in the number of cryptocurrency offerings. It is very hard to say which broker is the best because this depends on experience and habits of each investor/trader.
According to analysts, Plus500, AvaTrade, and EToro scored best in their review of the top brokers for trading coins. The cost of trading and the broker’s trust score were two most important categories. Some other advantages with these brokers include :
- 24/7 customer service
- A range of platform inc. Web Trader, Tablet & Mobile apps
- Offers demo account
- Many years in business
- Low spreads
- Used by thousands of traders
When we compare these brokers, Plus 500 has no minimum deposit. The minimum deposit to open an account with AvaTrade is $100.00, the minimum deposit to open an account with Etoro is $50. The spread usually ranges around $7 or 1.43% (Etoro takes a 1% fee for bitcoin trades). Plus500 doesn’t have a MetaTrader 4 option, the current maximum leverage for the opening position is 17:1and the margin to keep that position open is 3%. With AvaTrade you can use the same forex account to trade digital currencies. The company currently offers CFD trading in Bitcoin and Litecoin and the current maximum leverage for the opening position is 20:1. There are several restrictions for cryptocurrency traders who are trading with Etoro, they can only take a long position, no shorts are permitted. The CFD on offer is tied to BitStamp’s price feed but you can only enter and exit the market 4 times per day at fixed times. Etoro doesn’t allow margin trading. Plus500, AvaTrade, and EToro don’t accept US clients but deposits in USD are accepted.
One broker that has also very good reviews and accepts US clients is FXOpen. FXOpen follows standard AML and KYC laws and is registered and regulated in New Zealand. FxOpen offers a specialized MT4 Crypto Account. The minimum deposit is $10.00. The fee per side is 0.25% of the base currency. This broker offers easy deposits/withdrawals.
It is very hard to say which platform is the best because this depends on experience and habits of each investor/trader. Good trading platform dedicates a huge amount of attention to the professional preparation of beginner traders, while at the same time providing for the highest level needs of the most sophisticated players in the market. Collaboration with clients should be completely transparent, and customer support should always be available and ready to help.
Most crypto investors/traders still trade with exchanges directly while other trade with brokers that offer their platforms. The best cryptocurrency exchanges in 2017 include : Coinbase, Poloniex, Kraken. They are all very good, easy to use and very trusted. Fees are pretty low and everything goes through fast. Coinbase is really easy to use and because of this has lots of long-time customers. Coinbase has over 4,800,000 users that are signed up and has multiple online wallets. Poloniex is the most popular crypto exchange with good margin trading (up to 4x) available on largest altcoins. Poloniex is one of the best trading interfaces for mobile and desktop browsers. Kraken has cryptographic communications, works well for Europeans and North America and has low rates for trading, depositing and withdrawing.
Factors that make a good platform:
- Easy to use
- Absolutely transparent and fair practices, technology to protect all data and secure methods for funds depositing/withdrawing
- Good customers support available 24 hours
- Advanced analytical and technical tools
- Guaranteed stop-loss orders
- Free demo account
- Real-time charts
- Low spreads
- News and market analysis
Factors that make each platform unique include some features like automated trading, hidden orders (does not appear in the order book and thus doesn’t influence other market participants). Some platform allows you to organize your workspace according to your needs: compose your layout, choose between themes, set up notifications and data preferences. You can find on the market different copy trading platforms with different copy trading logics. Copy trading is the term for the practice in which traders copy the trades of other traders directly into their trading platform.
I would always choose a platform from a secure a friendly broker that offers many tools for its customers, along with a wide range of available options and underlying assets to choose from. When choosing a broker, always check history and reviews to make sure their performance is consistent. Checking the reviews is something you should always do. You can find lots of useful information and reviews on the internet. The Internet also makes it very easy for people to post their experiences and useful information. Forums are a very good place to find objective third-party reviews of all the platforms and any broker.