Best Bitcoin Brokers
Bitcoin — the world’s largest and most popular cryptocurrency — has surely made a name for itself as a desirable asset to trade. Reaching an all-time high value upwards of $20,000 in January 2018, the market’s first and foremost digital currency gained widespread popularity. Trading Bitcoin (BTC), however, comes with a lot of specifics. Below we take a closer look at the most important things you’d have to consider if you’ve decided to march into the world of Bitcoin trading.
What is Bitcoin
We’ve taken an in-depth look at Bitcoin (BTC) and the way it functions in a dedicated guide you can take a look at here.
Put simply, Bitcoin is a distributed peer-to-peer digital currency which can be transferred almost instantly and securely between any two parties, regardless of their current whereabouts.
Bitcoin (BTC) uses public-key cryptography, as well as proof-of-work (PoW) algorithm in order to process and to verify payments.
It’s not the only existing cryptocurrency Others include Bitcoin Cash, Litecoin, Monero, Zcash, and so forth. Bitcoin Cash (BCH) is a digital currency which is the result of a hard fork of the Bitcoin network.
Why Trade Bitcoin?
Trading bitcoin does come with some advantages and disadvantages, so to speak. Naturally, as a highly-volatile asset, it bears a lot of risks. Investing more than you can afford to lose is never a good idea, and the same applies to cryptocurrency trading. Online trading, however, has become incredibly accessible and it’s worth pointing out the benefits and drawbacks of the market.
Disadvantages of Bitcoin Trading
Limited Historical Data
While Bitcoin (BTC) has been around for almost a decade, the majority of the remaining cryptocurrencies on the market have limited historical data available.
As such, it’s challenging to create accurate and data-driven technical analysis, since it’s hard to follow trends and momentum, support and resistance levels, and overall patterns in general. While there are plenty of different trading tools, the limited historic information does make it a bit more challenging, especially for the retail investor, to get involved successfully.
While it’s hard to categorize high volatility as a disadvantage, it does pose a serious amount of risk. Losing your money is undoubtedly possible, especially when it comes to margin trading.
This is the main reason for which countries such as Japan has proposed to limit margin trading in order to protect serious, as well as retail investors.
Lack of Legislation
Governments around the world are struggling to come up with the right approach to put cryptocurrencies within a certain regulatory framework.
The uncertainty of how legislators will treat Bitcoin (BTC) and other cryptocurrencies as well, is something that might be preventing institutional investors from stepping in the market.
Advantages of Trading Bitcoin
Diversify Your Investment Portfolio
If you start trading and invest in Bitcoin, you can balance your portfolio. Given the industry’s volatile nature, you can also hope to rapidly increase the overall value of your investments.
Despite the fact that the cryptocurrency market has entered a prolonged bear market in 2018 and the prices are currently depreciating, volatility makes it possible to quickly regain one’s losses.
Of course, once again, it’s important to note that you should consider the risks and invest only as much as you can afford to lose.
Bitcoin’s Getting Popular
As the world’s leading cryptocurrency continues to grow in popularity, it’s logical for it to grow in demand as well. Because of Bitcoin’s limited supply, as demand surpasses supply, the price is supposedly going to grow consequentially. Hence, if you want to invest in Bitcoin, it might be a good thing to consider its increasingly widespread adoption as a strong merit.
There are over 4,000 Bitcoin ATMs currently throughout the entire world and you can virtually purchase Bitcoin at any railway station in Switzerland. France has also recently announced that Tobacco shops will allow users to buy cryptocurrency.
Institutional Money Matters
As we mentioned above, Bitcoin (BTC) and the entire cryptocurrency market in general, are still in a fairly nascent stage. Hence, it might be safe to say that institutional money has yet to enter the scene.
And we might just be witnessing institutions setting up the tone. The Intercontinental Exchange (ICE), owner of the New York Stock Exchange (NYSE), in partnership with marquee companies such as Starbucks, Microsoft, and others, have joint forces on a cryptocurrency solution Bakkt, which is set to launch in December following regulatory approval – a solution many experts believe paves the way for institutional investments.
It’s critical to outline that Bitcoin trading is a risky undertaking and introduces a risk of losing your funds. Hence, you should consider going through a comprehensive trading guide or trusting a professional if you want to start trading. Alternatively, you can take advantage of trading signals which are available on a range of different trading platforms – these will require you to essentially trust someone else’s expertise or that of an algorithm.
How to Buy Bitcoin
Buying bitcoin has become particularly easy. There are plenty of different ways you can do it. You can check our detailed guide on how to buy cryptocurrencies and explore the methods you can take advantage of. In short, you can buy and sell Bitcoin with the following payment methods:
- Online payment processors such as PayPal and Skrill
- Through cryptocurrency exchanges via bank transfer/credi or debit card
- In cash
How to Daytrade Bitcoin
In order to understand how to daytrade bitcoin, you’d first to have to be aware of the concept of the term.
Day trading is generally defined as the process of buying and selling an asset within a single trading day. This can take place on trading platforms of different types.
Most typically, day traders are well-funded and well-educated – they use complex technical analysis in order to place and close their trades at the exact right moment. Hence, daytrading is not generally advisable for the novice retail investor who doesn’t have the necessary knowledge and experience in the field
There are a few characteristics of a day trader. These include:
- Sufficient Capital
In theory, anyone can daytrade Bitcoin. However, experts tend to have sufficient capital to properly capitalize on the intraday movements of the price.
- Sufficient Knowledge and Experience
Daytraders understand complex technical analysis. They also use a range of different trading tools in order to be effective.
- Comprehensive Strategy
A day trader needs to have an edge over the rest of the market. There are different types of strategies that experienced traders use such as arbitrage and swing trading.
How to Choose the Best Bitcoin Broker
There are quite a few things that one needs to consider when it comes to finding the best Bitcoin broker. There are plenty of bitcoin brokers on the market and, hence, narrowing the list down to the best one would require some reading.
There are a few key factors to consider when you choose the best Bitcoin broker.
Just as in real estate, it’s all location, location, location. Knowing your country and whether or not there are certain crypto trading restrictions is particularly important. You might have found the best Bitcoin broker in terms of functionality as well as the trading tools offered, but if it doesn’t operate in your region it would be no good.
Furthermore, you need to check whether or not you can buy Bitcoin with your own currency or you’d need to convert as this might require you to bear certain trading fees – which brings us to our next point. Checking the verification process is something that you should do first.
- Trading Fees
The main thing you’d be doing on the Bitcoin trading platform is to trade. Hence, trading fees are absolutely crucial. You want to make sure that the fees which are imposed are reasonable and within the accepted standard.
- Order Book Volume
Regardless of whether you are looking to buy or sell Bitcoin, you need to make sure that there are enough people on the trading platform that can satisfy your orders. The larger the order book volume, the better.
One of the things to consider is that a transparent cryptocurrency exchange will publish audit information regularly as well as information about its cold storage. One of the things that any trading platform oughts to prioritize is investor accounts.
- Deposit and Withdrawal Limits
When it comes to online trading, you’d have to deposit the funds you’d want to be trading with and eventually withdraw them. You should check out the payment options, withdrawal fees, deposit limits and other specifications of the kind in order to avoid losing money when trading. Furthermore, top Bitcoin brokers will also provide some sort of trading guide that can get novice and inexperienced retail investors started.
When opening a trading account at any Bitcoin broker, you need to make sure that your funds are safely stored. When it comes to cryptocurrency, a lot of the best Bitcoin brokers rely on cold storage solutions to prevent any possibility of third-party interference.
At the same time, basic security measures should be in place such as a thorough verification process, risk warning, 2-factor authentication, and others of the kind.
Not becoming a victim of cryptocurrency theft should be your top priority. Hence, conducting thorough and in-depth due-diligence is absolutely crucial prior to picking the best Bitcoin broker or any cryptocurrency trading platform, for that matter. This will help you prevent losing your money.
Below you will find a brief broker comparison which will show you the types of features different Bitcoin brokers tend to have.
Most Popular Bitcoin Brokers
There are plenty of Bitcoin brokers on the market that a trader can choose from. Naturally, they differ in a range of different characteristics. Below is a brief broker comparison exploring some of their main and most important features.
eToro is a financial services company which is regulated and authorized by the Cyprus Securities and Exchange Commission. It’s amongst the most reputable Bitcoin brokers on the market and it offers a wide range of helpful features for the investor.
In terms of payment methods, the provided options vary widely from a simple transfer from your bank account to using Skrill, PayPal, NETELLER, and a range of different payment options in general.
In terms of trading fees, eToro places a 0.0005 unit crypto transfer fee on Bitcoin withdrawals and 0.006 units on ETH withdrawals. There are also certain conversion fees that you’d have to be aware of. The minimum deposit on eToro is $200.
The trading platform allows investing in currencies, commodities, stocks, cryptocurrencies, ETFs, and indices. In general, oppening a trading account on the platform is fairly easy and withdrawal fees are not that high.
B2BX Exchange is a cryptocurrency exchange which offers crypto-crypto and crypto-fiat trading pairs. B2BX was launched in January 2018 and is today licensed by the Financial Intelligence Unit (FIU) of Estonia. This allows it to operate as a regulated exchange for trading cryptocurrencies.
B2BX caters for both individual and corporate clients and offers institutional grade liquidity, various order types, advanced API (WebSocket and REST), multiple options of fiat deposits and withdrawals with security options such as funds protection, 2FA and KYC, with low trading fees.
B2Broker is a well known industry player and an acknowledged technology and liquidity provider for Forex and crypto brokers, crypto exchanges and other financial services entities. The company offers a wide variety of services including Forex, CFD and Cryptocurrency liquidity, Crypto/Forex Broker turnkey solutions, crypto payment processing, MT4/5 white label solutions, Trader’s room client cabinet solution and Investment Platform offering a very respectable 800 trading instruments across the entire range of assets.
B2Broker’s operations started in 2014 and the company has since gone on to work with many leading big-name clients in the financial services industry, with over 150 institutional clients at the time of writing.
Evolve Markets is a trading platform which is another one amongst the best Bitcoin brokers. Investor accounts are approved instantly while deposits are confirmed within a few minutes. It allows users to trade on commodities, forex, and cryptocurrency markets.
The trading platform doesn’t have a minimum deposit requirement. There is a 0.075 percent trading fee on cryptocurrencies and no fees on withdrawals and deposits. It allows users to easily buy or sell Bitcoin and it boasts a supposedly powerful trading infrastructure.
SimpleFX is amongst the popular trading platforms which comes with a user-friendly interface and a range of tools which are designated to elevate user experience.
Trading CFDs is one of the flagship offerings. It enables fast and secure transfers, a comprehensive API manager, no minimum deposit or withdrawal requirements, as well as a negative balance protection.
Plus500 is undoubtedly one of the most-well known bitcoin brokers. It has $300 deposit minimum. Just as like eToro, it is regulated by Cyprus Securities and Exchange Commission, the Financial Conduct Authority and ASIC.
In terms of risk management, the platform enables a few different tools, including risk warning. Deposits and withdrawals can be made easily via PayPal, Skrill, credit cards and bank transfer.
24 Option is a well-known is one of the best brokers out there. Among its advantages are the wide range of assets as well as the seemless deposits and withdrawals. However, the platform is also known for fairly high spreads as well as insufficient information regarding the account types.
Markets.com is a broker which is operated by Safecap Investments Limited. This is a Financial Services Company which is regulated and authorized by the Cyprus Securities and Exchange Commission.
Much like the other brokers on the list, Markets accepts a broad range of payment methods which include Skrill, PayPal, NETELLER, wire transfer and so forth.
The broker also takes pride with its customer service.
Choosing among the best Bitcoin brokers is a decision which should be made based on your individual preferences. However, there are established and reputable companies, some of which are listed above in our brief broker comparison.
Reading thorough, unbiased brokers review on any of the trading platforms you might select is essential when making your mind. Generally, though, you should consider a range of factors, most importantly whether or not the Bitcoin trading platform provides everything you need for your seamless, hassle-free, effective and secure Bitcoin trading.
[Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Trading cryptocurrency is volatile and risky. Always consult with a trained financial professional before making any investment decisions.]