How do you buy bitcoin?
There are three primary ways to buy and sell cryptocurrencies like bitcoin:
- Buy bitcoin (the underlying asset) - The most common way to buy bitcoin is to buy physical bitcoin from an online bitcoin exchange such as
eToro. Your bitcoin is then held and secured in a digital wallet provided by the broker (or you can withdraw it to the wallet of your choice).
- Buy a bitcoin CFD (contract for difference) - Another popular way to trade bitcoin is through CFDs. With a CFD, you do not own the underlying bitcoin. Instead, you are betting on the direction that bitcoin's price will go — either up or down. The main benefit of CFDs is that you can short bitcoin if you expect the price to go down. Holding longer term can be expensive due to the cost of carrying CFDs overnight (i.e., rollover premiums).
- Buy an exchange-traded product (ETP) - Exchange-traded products are a class of securities that can be anything from a structured product or fund to a derivative contract or trust. Bitcoin ETPs include exchange traded funds (ETFs), exchange traded notes (ETNs) and other securities such as the Greyscale Trust (GBTC) that aim to track the price of bitcoin.
How much does it cost to trade bitcoin?
Fees for buying bitcoin can become quite high across many of the websites and unregulated exchanges that are out there, which is why we suggest only using a regulated broker. While the fees themselves may vary when buying bitcoin, the costs will consist of any per-trade commission, along with the difference between the bid/ask price — also known as the spread.
The fees to trade bitcoin generally start at anywhere from 0.002% to as much as 2% (and sometimes even more) of the trade value, depending on where you trade and the trade size.
Brokers that charge a commission will usually have lower spreads, while commission-free brokers will have higher spreads to make up for the difference. For example, if you buy $25,000 worth of a bitcoin CFD that has a spread of $50, that would be the commission equivalent of 0.002% of the trade value.
In other words, whether they come via spread or commission, bitcoin involves trading costs. Sometimes the fees also vary depending on whether you place a market order (to fill at the current or next available price) or if you use a limit order (to fill at a specific price or better), the latter of which can sometimes be cheaper at exchanges such as Coinbase.
What does a bitcoin broker do?
Bitcoin brokers enable you to buy or sell cryptocurrency. Without a broker, you cannot safely trade cryptocurrencies like bitcoin. To avoid scams, using a trusted broker is crucial when you are trading bitcoin.
What is the best forex broker to trade bitcoin?
Traders who wish to purchase the underlying physical bitcoin will find that eToro is a great option, followed by
Swissquote Bank and
Interactive Brokers. For bitcoin CFD trading, which includes the ability to go long or short on bitcoin, we recommend forex brokers such as
Saxo Bank and
AvaTrade due to their range of crypto assets (as long as you are located outside of the U.K.).
Crypto CFDs cannot be traded in the U.K. by U.K. residents due to regulatory restrictions (unless you are designated a Professional Client). Click here to learn more.
Can you trade crypto on forex?
Most crypto assets are offered either as the underlying physical asset or as a CFD or other derivative — including spot forex contracts. For example, Saxo Bank launched crypto trading for bitcoin as a spot forex contract, which behaves the same way as a CFD despite having a different legal distinction. If you are looking to trade crypto on
FOREX.com, crypto CFDs are available outside of the U.S. (except in the U.K., unless you are designated a Professional trader).
Which broker is good for cryptocurrency?
If you just want to buy and hold cryptocurrency, Coinbase is an excellent choice. Coinbase is trusted by nearly 70 million users and is highly regulated in the U.S. and other countries. That said, not all cryptocurrencies are supported or available in all regions, and if you are looking for access to more trading tools and the ability to trade in either direction (long or short) then a CFD or forex broker is your best bet.
Which forex broker offers the most cryptocurrencies to trade?
Our research found that
eToro offers the most cryptocurrency pairs to trade. With eToro, investors can buy and sell bitcoin (as the underlying asset), trade crypto CFDs, and even copy trade other investors. After eToro, other crypto brokers that offer dozens of cryptocurrency CFDs to choose from include
Which crypto exchange is the safest?
Among brokers offering bitcoin underlying,
Swissquote, regulated as a Swiss bank, is the safest broker. Founded in 1996, Swissquote is publicly traded (SIX: SQN) and regulated in four tier-1 jurisdictions.
eToro is another safe crypto exchange that uses multi-signature schemes (a form of cryptography) to help protect the crypto that it holds as a custodian. eToro's U.S. entity is regulated in 47 states as a Money Services Business (MSB) with the Financial Crimes Enforcement Network (FinCEN), whereas its EU entity eToroX is licensed by the Gibraltar Financial Services Commission (GFSC).
Which crypto broker has the lowest fees?
While Coinbase and Binance both offer entry-level pricing, Binance is cheaper with just 0.1% for the maker fee (when you place a limit order) or taker fee (when you place a market order), compared to Coinbase which charges 0.5% for both maker and taker fees on its base level (lowest) pricing tier. Binance and Coinbase are the largest cryptocurrency exchanges globally.
In terms of fees for active traders, Coinbase only outranks Binance when you compare the highest tiers offered by each broker. For example, for traders that surpass $1 billion dollars in volume — or 150,000 BTC — Coinbase is cheaper, offering a 0% maker fee and 0.04% taker fee. The 0% maker fee kicks in when you surpass $300 million on Coinbase, whereas on Binance you are charged a maker fee no matter how much volume you trade.
How much is one bitcoin worth?
Powered by blockchain technology, the price of one bitcoin reached a new all-time high of almost $70,000 in November 2021. The price gains were mostly attributed to new institutional investors entering the market and buying bitcoin.
I first wrote about cryptocurrencies in 2013 when bitcoin was still a novelty. Yet, as I'm writing this, the combined market cap of cryptocurrencies is over $2 trillion, with bitcoin accounting for nearly half. According to data from Coinmarketcap, the price of bitcoin can fluctuate widely across various trading venues, although in recent years the cryptocurrency markets have become more efficient — despite the high volatility.
Is buying bitcoin risky?
Despite the potential for large gains, buying bitcoin remains risky. The main risk is significant volatility (price swings). If you buy bitcoin and then the price plummets, you can sustain substantial losses. Adding any leverage (trading with borrowed money) will only further increase your risk when buying bitcoin.
Also, bitcoin remains a complex financial product. Many investors have lost money simply by losing their private keys, whether through exchange hacks or because they did not secure them properly in self-hosted wallets. Using a regulated, reputable broker is essential for safely trading bitcoin.
How do I know if a crypto broker is regulated?
To avoid scams, you should only use regulated bitcoin brokers. To verify a broker's regulatory status, start by determining the broker's legal name and country, and then find the appropriate regulator website to look them up. For example, a broker in the U.K. must be authorized and regulated by the Financial Conduct Authority (FCA). Here at ForexBrokers.com, we track, rate, and rank brokers across 20
How do you sell bitcoin short?
To speculate that bitcoin's price will fall, you must open a forex brokerage account with a broker that offers bitcoin CFDs, or contracts for difference. Using a CFD, you can open a sell order (bet the price will go down) and then place your trade. To make a profit, the price of bitcoin must fall. If bitcoin rises in price, you will lose money.
If CFDs are not available, using a futures or options contract can be an alternative way to bet against bitcoin. However, bitcoin futures and options are very complex instruments, not widely available, and should only be traded by professionals.
Should I buy physical bitcoin or use CFDs to trade bitcoin?
If you are a long-term cryptocurrency investor, buying the underlying physical bitcoin is the safest and lowest-cost way to invest in bitcoin. For more active, short-term trading, Contracts for Difference (CFDs) might be your best option. Just remember: CFDs are not ideal for holding long-term positions (months or years), as the financing charges will add up over time.
Is trading cryptocurrency legal?
In some jurisdictions, cryptocurrency is banned or illegal to purchase, trade, or own. Meanwhile, in other countries, it is perfectly legal. For example, in the United States (U.S.) and the United Kingdom (U.K.), it is legal to buy cryptocurrency from regulated brokers. However, CFDs are illegal to trade in both countries. The U.K. ban on bitcoin CFDs went into effect on Jan. 6, 2021.
How do you safely store bitcoin?
If you do not want to keep your bitcoin with your online broker, you'll need to store it safely. To secure your bitcoin, you must choose a hot (online) or cold self-hosted (offline) wallet. Note: safeguarding cryptocurrencies in your own self-custody wallet comes with its own risks and responsibilities. Just like having cash in your pocket, it must be secured properly.
Personally, for a hot wallet (online, internet-connected), I use Blockchain.com, which provides a mobile and web-based version. For cold storage, I use Ledger, a hardware device that allows you to keep the bitcoin private key offline. When you keep your private key offline, you'll need to create a written backup recovery phrase — a critical step to safeguard your bitcoin in the event that you lose your hardware device.
Do I need a broker to buy bitcoin?
Yes, always use a trusted and highly-regulated bitcoin broker to buy bitcoin. Using a regulated broker will help you protect yourself from scams and keep your bitcoin secure. To avoid scams, never buy bitcoin from someone directly or from a third-party website or marketplace that is not properly regulated. For cryptocurrency that you do control, never share your seed phrase (recovery phrase) or private keys with anyone (this is the equivalent of giving them your money).
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At ForexBrokers.com, our evaluations of online brokers and their products and services are based on our collected quantitative data as well as the qualitative observations and qualified opinions of our expert researchers. Each year we publish tens of thousands of words of research on the online forex brokerage industry, and we evaluate dozens of international regulator agencies (click here to learn about how we calculate Trust Score).
Our research team thoroughly tests the most important cryptocurrency features and services offered by online brokers. We conduct extensive research into each broker’s overall crypto offering to determine the number of available crypto assets, and whether the broker offers the physical (underlying) assets or crypto CFDs (or both) – among other important data-driven variables.
We also test any crypto-specific trading tools or resources, and we research any and all trading costs, spreads, and crypto-specific fees (such as when converting crypto to crypto).
We test cryptocurrency services across a variety of platforms and devices; all websites and web-based platforms are tested using the latest version of the Google Chrome browser. Our Desktop PCs run Windows 11, and we use MacBook Pro laptops running macOS 12.5 to test copy trading on the go.
We also test cryptocurrency services on mobile devices; for Apple, we use the iPhone XS running iOS 15, and for Android we use the Samsung Galaxy S9+ and Samsung Galaxy S20 Ultra devices running Android OS 12.
Ultimately, our rigorous data validation process yields an error rate of less than .1% each year, providing site visitors with quality data they can trust. Click here to learn more about how we test.
Forex Risk Disclaimer
There is a very high degree of risk involved in trading securities. With respect to margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, there is considerable exposure to risk, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or related instrument. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses. Read more on forex trading risks.
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