How to Buy Crypto with Interactive Brokers
Find out if Interactive Brokers is the right choice for your crypto trading needs and what services they provide.
Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Summary: Interactive Brokers (IBKR) provides indirect access to the cryptocurrency market via crypto-related ETFs and stocks, offering investors a method for gaining crypto exposure without direct trading.
For those seeking a trading platform with direct cryptocurrency transactions, eToro is a suitable alternative. It stands out with competitive fees and robust regulation, offering a secure, diverse trading environment. This platform caters to a broad spectrum of assets, including over 3,000 cryptocurrencies, stocks, and ETFs.
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Can I Buy Crypto with Interactive Brokers?
Interactive Brokers (IBKR) does not offer the option to purchase cryptocurrencies directly. However, they provide alternative avenues to gain exposure to the digital asset market. This is primarily done through exchange-traded funds (ETFs) and exchange-traded notes (ETNs) that track the performance of cryptocurrencies.
It's important to consider the inherent risks associated with these instruments, such as counterparty risk, which is the risk that the issuer may not fulfil their financial obligations. We recommend investors use a real crypto asset exchange to hold the underlying and withdraw it to a personal wallet.
How to Buy Crypto with an IBKR Alternative
For those seeking alternatives to Interactive Brokers (IBKR) for Bitcoin, Ethereum, and other cryptocurrencies, eToro is a noteworthy choice. Recognized for its comprehensive asset portfolio, eToro offers more than 3,000 assets, including a range of cryptocurrencies, stocks, and ETFs. The platform is renowned for its user-friendly interface, backed by stringent regulatory oversight in both the U.S. and Europe. With a global user base exceeding 30 million, eToro has established itself as a reliable platform for crypto investments.
- Account Creation and Verification: Visit the eToro website. The sign-up process is straightforward and includes identity verification for security and regulatory adherence.
- Funding Your Account: On the dashboard, locate and click the 'Deposit Funds' button. This action is crucial for initiating your investment journey.
- Deposit and Currency Selection: Choose your deposit amount and your preferred currency. eToro’s versatile platform offers several deposit methods to accommodate different user preferences.
- Investing in Cryptocurrency: With your account funded, you can invest in a variety of cryptocurrencies available on eToro.
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What are the Fees?
Interactive Brokers implements a fee of 1.5% as a spread on cryptocurrency transactions. This spread, representing the difference between the buying and selling prices, is a part of their 'Lite' tier service, which is characterized by commission-free trading. On the other hand, their 'Pro' tier involves commissions that may go up to $1 per trade. This is exclusive of any additional fees that might be levied by exchanges or regulatory bodies.
In contrast, eToro adopts a commission-free model for its users, with an average spread of approximately 1% on cryptocurrency trades. This approach marks eToro as an economical choice in the crypto trading space. Additionally, eToro maintains a uniform account structure, offering all accounts without any fee, thereby simplifying the trading experience for its users.
Does Interactive Brokers Offer Bitcoin ETFs?
Yes, Interactive Brokers (IBKR) offers Spot Bitcoin ETFs. These ETFs enable investors to gain exposure to Bitcoin without directly owning the asset. Interactive Brokers provides low commissions on these ETFs, ranging from USD 0.0005 to USD 0.0035 per share, alongside the advantage of IB SmartRoutingSM. Notably, Spot Bitcoin ETFs hold actual Bitcoin, meaning their prices fluctuate in line with Bitcoin's price in the cryptocurrency markets.
Clients can access various popular Spot Bitcoin ETFs through IBKR, including ARK 21Shares Bitcoin ETF, Bitwise Bitcoin ETF, Fidelity Wise Origin Bitcoin Trust, and others. Additionally, IBKR's focus on technology and automation offers clients a sophisticated, global trading platform with low costs for managing investments, including access to cryptocurrencies.
Bottom Line
In conclusion, while Interactive Brokers (IBKR) does not directly offer cryptocurrency purchases, it facilitates exposure to the crypto market through Spot Bitcoin ETFs and other instruments. This allows investors to engage with the cryptocurrency market without owning the actual asset. Furthermore, for those seeking a direct investment in cryptocurrencies like Bitcoin and Ethereum, eToro emerges as a viable alternative, providing a user-friendly platform under robust regulatory compliance. With its commission-free model and an inclusive account structure, eToro stands out as a practical option for diverse crypto investments.
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