If you’re new to the cryptocurrency world, you may be pondering over what a Bitcoin broker is and how to initiate the process of doing investments in this regard. The simplest analogy is that Bitcoin brokers are similar to regular stock trading websites. But make sure that you know their policies. For example, if you trade cryptocurrency on eToro, then that means you’re secured with real assets as long as your trade is a non-leveraged buy position.
This is because Bitcoin brokers act as intermediaries between you and the investment markets, requiring you to go through a third party to purchase and sell cryptocurrency.
For example, the Bitcoin broker will need you to establish an account at first. In addition, if you want to deal in pounds and pennies, you’ll need to be confirmed.
After all, it’s as simple as looking up the cryptocurrency you want to trade, inputting the amount you want to deposit, and completing a market order.
The Bitcoin broker will then provide you with the choice of storing your freshly bought tokens in its own custody or transferring them to a private wallet.
Finally, Bitcoin brokers are in the business to earn money, which is why they will charge you a variety of fees for utilising their platform. This might include costs for depositing and withdrawing cash, as well as placing buy and sell orders.
How to Select The Best Cryptocurrency Broker for You?
You should not decide about the best broker on others’ recommendations, instead, you should research yourself about the crypto broker because only you know which one can be appropriate for your needs.
This is why we always advise our users to conduct their own analysis before signing up for a new trading platform. Being a new investor, you might be confused about how to choose the best broker. For your ease, we’ve prepared a list of features and functionalities that a crypto broker must hold.
So, let us reveal those metrics on the basis of which you’ll choose your crypto broker.
1. Regulation & Security
Although cryptocurrencies are not approved as an investment scheme in the United Kingdom, this does not indicate that you should subscribe to an unregulated website. Conversely, we highly suggest you choose a Bitcoin broker that is FCA-regulated.
This ensures that your savings are protected from fraudulent activity and that you will be able to deposit money and make withdrawals in GBP. For example, as previously stated, FCA-regulated Bitcoin broker eToro accepts GBP deposits by debit and credit cards, Paypal, Skrill, bank transfers, and other methods.
When you decide to withdraw GBP, you can do so using the same payment method you used to deposit. When utilising an unconnected platform, however, your right to access GBP payments will be significantly hampered.
We’ve discovered that many unregulated sites will try to get around these prohibitions by working with third-party payment services. This, however, implies that you will be paying a large amount in fees, which might be as big as 10%.
Another danger of utilising a platform that is not authorized by the FCA is that you have no way to know if your money is protected. For example, if you do some research on unregulated crypto exchanges, you’ll be surprised to realise that billions of pounds have been stolen over the last decade.
2. Range of Assets
We frequently discover that the top crypto brokers in the UK are companies that provide a wide range of supported marketplaces.
In any case, opening and maintaining accounts with various crypto brokers and exchanges solely to diversify may be time-consuming. As a result, it’s recommended to remain with crypto brokers who provide a diverse range of digital currencies.
Another thing to ponder over is that you may want to entirely diversify into other asset types. In this regard, eToro is an excellent choice, since it not only provides 40+ crypto markets, but also hundreds of commission-free stocks and ETFs, as well as marketable CFD assets that follow FX, commodities, indexes, and more.
3. Fees
When looking for the top Cryptocurrency brokers in the UK, we were shocked by how much diversity there is in terms of costs. Furthermore, we discovered that majority of platforms made it impossible to access information on basic account expenses.
To put you in the appropriate path, we’ve broken down the primary expenses to watch out for when selecting the best cryptocurrency broker for you.
4. Payments
When looking for Bitcoin brokers, you should consider the cost of payments. After all, in order to purchase cryptocurrency, you must first pay a deposit.
Payment costs will vary based not just on the broker, but also on the deposit method. For example, you may deposit cash at Crypto.com for free using a UK bank transfer. However, debit/credit card transactions are increased to a maximum of 2.99%.
On debit/credit card payments, Coinbase charges a staggering 3.99%. However, bank transfers to the United Kingdom are free. All payment options at eToro, including debit/credit cards, e-wallets, and bank transfers, cost just 0.5%.
Remember that if you use a UK investment bank transfer, the cash may take a few days to deliver. However, in addition to deposits, you should also verify the withdrawal costs.
5. Trading Commissions
Cryptocurrency brokers often charge a fee on buy and sell orders. This is often represented as a%age rate multiplied by the size of your trade order.
As an example:
When you use Coinbase to exchange Cryptocurrencies against GBP, you will be charged a normal fee of 1.49%. So, if the trade value was £1,000, the charge would be £14.90.
If you chose to cash out your Bitcoin stake a few months later and it was valued at £3,000, you would have to pay 1.49% again. This translates into a charge of £44.70.
When it comes to picking a Cryptocurrency broker, there are many less expensive solutions than Coinbase. eToro, for example, simply costs the spread, which is the difference between the bid and ask prices defined by the markets.
Trading Tools
We’ve discussed fees, regulations, and commissions, and now we’re proceeding to the tools required for trading. These are management tools that can help you make cryptocurrency investing decisions.
The following are some of the tools provided by the finest Bitcoin brokers in the UK:
1. Technical Analysis and Charts
Because cryptocurrencies are volatile, anticipate big price fluctuations. As a result, if you want to participate in a short-term trading strategy, it’s a good idea to select a Bitcoin broker that provides real-time price information.
Furthermore, if you’re familiar with technical analysis, it goes without saying that you should seek for a platform that has pricing indications and sketching tools.
2. Educational Resources
Unless you’ve previously traded digital currencies, it’s a good idea to brush up on your understanding. With this in mind, it is prudent to select a Bitcoin broker who not only provides trading services but also instructional resources.
This might range from lengthy guidelines on how to trade Bitcoin to seminars and videos.
3. Types of Orders
Personalized order types are another feature to look for while looking for the top Bitcoin broker in the UK. This will allow you to initiate and exit deals in a risk-averse manner.
When you buy cryptocurrency, for example, eToro, Binance, and Huobi all enable you to use a stop-loss order. This instructs the broker to auto terminate your trade if its value falls by a particular amount, such as 10%.
Furthermore, the trusted brokers automatically place take-profit orders. This allows you to advise the broker to quit your trade when it achieves a certain profit objective, such as 30%.
4. Usability
In our analysis of the top Bitcoin brokers, we highlighted that while some platforms cater to newcomers, others cater to seasoned traders.
A solid beginning point for determining whether a Bitcoin broker is appropriate for your skillset is to browse around their trading site.
When you sign up with eToro, for example, you’ll get an option to utilise a free demo account that enables you to deal with paper money. You may use this option without depositing any money, allowing you to determine whether the site is acceptable before proceeding.
Finally, if you create an account with a Bitcoin broker that provides an extremely sophisticated trading suite, you may make an expensive error.
5. Mobile App
Many crypto brokers have a high-quality mobile app that is suitable for both iOS and Android devices.
This means you can access your cryptocurrency holdings no matter what is your location.
This may be useful if you learn about a fresh rising trend and want to purchase a certain crypto asset.
Or, if you wish to terminate an open job immediately, simply log into the app.
In any case, if your selected Bitcoin broker does not have a good mobile app that links to your primary account Then it is advisable to look elsewhere.
6. Customer Service
The finest bitcoin brokers in the UK will provide excellent customer service. This is typically provided through a live chat option, such as those provided by eToro and Crypto.com.
Examine the support team’s working days and hours, as well as the contact options available. If email is the sole option, you may have to wait several days before hearing back from the broker.
Conclusion
Now that you have understood all the required features and tools a good crypto broker should hold. Following these points, you can select the best broker for you that can ease your trading process. If you want to know about the best crypto brokers, click here.
Losses are a part of every business, but nobody wants to suffer from such scenarios. So, don’t forget to consult with experienced traders and then research on your own before deciding on a crypto broker. This is a matter of your hard-earned money, so you must be cautious before making any decision.
