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Summary: Charles Schwab's platform does not support the direct trading of real cryptocurrencies. However, it offers options for investors to get exposure to the crypto market through crypto-linked stocks and ETFs. While this is a safer way to engage with the asset class, it comes with its own challenges, including potentially higher costs and the absence of owning the actual digital asset.
After thoroughly reviewing multiple platforms, we find eToro a standout multi-asset broker. eToro offers access to a wide variety of real cryptocurrencies, along with a user-friendly interface and competitive fee structures. Importantly, eToro operates as a licensed exchange under FinCEN regulations, enabling smooth USD deposits from U.S.-based banks.
Can I Buy Crypto with Charles Schwab?
Currently, Charles Schwab doesn't allow the direct purchase of cryptocurrencies on its platform. Instead, it offers exposure to crypto-related financial products such as exchange-traded funds (ETFs) and stocks from companies participating in the crypto industry, like MicroStrategy and Galaxy Digital Holdings.
Investors should tread carefully when exploring these investment avenues, considering potential risks that include management and custody issues. Historical incidents like the decline of FTX can serve as cautionary examples of these inherent risks. Moreover, choosing these investment options may lead to higher expenses (carry costs) compared to buying primary assets like Bitcoin (BTC), Ethereum (ETH), or Solana (SOL).
How to Buy Crypto with a Charles Schwab Alternative
If you're looking for a secure way to invest in cryptocurrencies as an alternative to Charles Schwab, consider using a US-regulated crypto asset exchange that complies with FinCEN guidelines. Such platforms offer multiple secure options for depositing USD, such as bank or ACH transfers, and credit or debit cards. We recommend eToro over other popular platforms like Coinbase, due to its advantageous fee structure, tighter spreads, and diverse asset offerings.
To begin your crypto journey with eToro, follow this straightforward guide:
- Visit the eToro website and go through the identity verification steps.
- Locate the 'Deposit Funds' button, typically found at the bottom left corner of the interface.
- Choose the amount in USD you wish to deposit and select your preferred method, such as ACH transfer or credit/debit card.
- Complete the deposit process, and you'll be ready to use the funds in your account to invest in a variety of cryptocurrencies.
What are the Fees?
If you're trading crypto stocks, ETFs, or other related financial products on Charles Schwab, you'll notice that there aren't explicit fees or initial charges. However, Charles Schwab does include a fee within the spread, the difference between the buying and selling prices of equities and other investment vehicles, which typically fluctuate around 1%.
This pricing structure closely resembles that of eToro, our recommended alternative. A unique benefit of using eToro is the opportunity to buy actual cryptocurrencies directly, giving you more investment options than the limitations of trading only derivatives on Charles Schwab.
Will Charles Schwab Offer Real Crypto Assets?
At the moment, it appears improbable that Charles Schwab will start offering real crypto assets anytime soon. The main obstacle is the lack of a secure and robust infrastructure to hold actual cryptocurrencies for individual and institutional investors.
Setting up such an infrastructure would require significant investment in both technology and security measures. So far, Charles Schwab hasn't shown any signs of moving in this direction. Therefore, it's reasonable to expect that Charles Schwab will maintain its focus on current products and services, which don't include direct transactions in crypto assets.
About Charles Schwab
Charles Schwab is a major online brokerage firm based in the United States, catering to various investors, from individuals to institutions. Established in 1971, Schwab has been a reliable platform for trading stocks, options, bonds, mutual funds, and various other financial derivatives. The brokerage is noted for its $0 account minimum, zero fees for online listed equity trades, and a satisfaction guarantee, demonstrating its commitment to making investing accessible for everyone.
The platform's user interface is designed for ease of use, supported by Schwab.com and the Schwab mobile app for seamless account management. Schwab offers a plethora of online tools to help users screen and evaluate investments, create investment plans, and more. Though Schwab is a comprehensive platform, it does not yet support direct trading of real crypto assets, opting to focus on crypto-linked stocks and ETFs.
To sum it up, if you're interested in investing directly in cryptocurrencies, Charles Schwab may not be your best option right now. While it does offer ways to get exposure to the crypto market via crypto-linked stocks and ETFs, these methods often come with higher costs and don't allow you to own the actual digital assets.
On the other hand, eToro emerges as a preferable alternative, boasting a user-friendly interface and a wide array of real cryptocurrencies. Plus, it complies with FinCEN regulations, allowing for secure and easy USD deposits. Since Charles Schwab hasn't shown interest in supporting direct crypto trading, investors may find it more beneficial to use regulated platforms for a safer and more optimized digital asset experience.