Would it be better to choose a broker or an exchange platform to invest in cryptocurrencies? And, in that case, which would be the best brokers and exchanges for it?
The costs charged by brokers and cryptocurrency exchanges reduce the trader’s profitability. However, it is not the only factor to be taken into account when choosing and should not be the only criterion. There are several elements to be considered, such as available assets, trading platforms, and more.
In this article, we will have a look at the best brokers and exchanges to invest in cryptocurrencies in the UK and what options you have as a retail trader.
Best brokers to invest in cryptocurrencies
It is noteworthy to mention that the FCA banned the sale of crypto derivatives in the UK for retail traders. In other words, individuals can only buy and sell real crypto assets. For this reason, many brokers in Europe offer CFDs and other derivatives on crypto in other countries, but not in the UK, so their offering is limited to other assets permitted in the country.
If you are interested in trading CFDs instead, check out our article on the best CFD brokers.
Here is a short summary of the main brokers available in the UK to buy cryptocurrencies:
Is eToro the best cryptocurrency broker?
eToro is one of the few UK-regulated brokers that offer real cryptocurrencies, stocks, and ETFs. It also has a much broader offering that encompasses CFDs on many other assets, including forex, commodities, and indices.
A key benefit of using eToro is that it is beginner-friendly thanks to its copytrading feature, which allows individuals to copy master traders’ portfolios with one click, so there is no need to gain significant experience to have a successful strategy with eToro. Check out our comprehensive eToro review for more information.
|Financial assets||Cryptocurrencies, stocks, ETFs, and CFDs on many other assets|
|Number of cryptocurrencies||+50|
✅ Wide variety of cryptocurrencies and other assets
✅ Beginner-friendly platform
✅ Copytrading feature
❌ Lack of in-depth analysis tools
❌ Charge for withdrawal of funds and inactivity
❌ Account available only in USD
Is BUX the best cryptocurrency broker?
With Bux, you can invest in crypto, stocks, and ETFs. For cryptocurrency, there is a fee of 0.5% per trade. However, the fee is waived if you hold a minimum of 1,000 BUX tokens in your account.
The broker offers only real assets and is a great choice for long-term investment strategies due to its many features, such as a dividend calendar and even automated investing plans.
|Financial Assets||Crypto, stocks, ETFs|
|Platforms||Bux Mobile Phone App|
✅ Regulated broker
✅ Easy-to-use platform
✅ Ideal for long-term investment strategies
❌ Only mobile phone app available
Is TradeStation the best cryptocurrency broker?
TradeStation is a real asset broker. You can trade multiple assets, including stocks, ETFs, options, futures, and mutual funds. However, the crypto offering is quite limited – you can only trade Bitcoin (BTC), Ethereum (ETH), and USDC.
TradeStation platform is feature-packed, boasting multiple sophisticated tools, including a customisable trading interface, price analysis, and one-click order entry.
|Financial assets||Crypto, stocks, ETFs, options, futures, mutual funds|
|Cost||Variable, max cost is $2 + 0.60% (depends if order is immediately marketable or not)|
✅ Lower cost for higher trades (above $1,000)
✅ Platform available via browser, mobile phone, and downloadable software
✅ Unlimited demo account
❌ No copy trading option
❌ Crypto offer is very limited
Are you looking for more UK brokers with competitive offers? Check out the following articles:
- Best forex brokers
- Best ETF brokers
- Best brokers for beginners
- Best brokers to trade CFDs
- Best brokers for options
- Best commission-free brokers
- Best fixed-income brokers
What are the best exchanges to invest in cryptocurrencies?
If you want to trade crypto only, here are the top 3 UK crypto exchanges:
Best exchanges to invest in cryptocurrencies
|Coinbase||Security and services|
|Kraken||Security and support for beginner investors|
|Bitpanda||Security and innovation|
Coinbase is recognised as a platform for effortless and trustworthy buying and selling of cryptocurrencies. It is among the prominent platforms, boasting a daily traded volume exceeding $4 billion, over 43 million registered users, and availability in more than 100 countries.
It provides secure storage, with 98% of customer funds stored offline. These factors, combined with its commendable practices, establish Coinbase as one of the premier exchanges for cryptocurrency investments.
Kraken has also been rated as one of the safest cryptocurrency exchanges. There is no doubt that it is one of the best that exists today.
One of its features is the support it provides to its clients, regardless of their level. It offers guides, and resources, and has a high-quality support service. The Kraken platform itself is designed to be used by novice cryptocurrency traders and investors.
Bitpanda is one of the largest exchanges in the world and was founded in 2014. Since 2020, it has been recognised as a unicorn, having attained a valuation exceeding $1 billion as a startup. Within Bitpanda, you have access to over 25 cryptocurrencies available for buying and selling.
Requirements for a good cryptocurrency broker (or exchange)
Prior to even contemplating whether to opt for a broker or an exchange for cryptocurrency investments, we must inquire about the following criteria. What requirements should I expect from a broker (or exchange) to include it among the candidates for investing in cryptocurrencies?
- Regulation: The platform of our choice should comply with specific security policies, either through oversight from a regulatory entity or by securing the deposited funds. This ensures that situations like the FTX bankruptcy do not occur.
- Variety of cryptocurrencies: The best broker or exchange should present an extensive range of cryptocurrencies available for trading. This enables the diversification of investments and provides opportunities for substantial profits.
- Initial deposit: A reputable cryptocurrency broker should be accessible to investors by setting a reasonable minimum initial deposit. It should not be overly costly to start investing.
- Demo accounts: For beginners, it is crucial that the broker offers a demo account, allowing practice and learning before committing real money.
- Fees and commissions: Familiarising oneself with a broker’s charges and commissions is always important before registering on the platform. This evaluation helps in determining if the broker is suitable, with a preference for low fees.
- Customer service: This is a vital aspect to consider. The best broker should provide excellent customer service to its clients, accessible through live chat, email, or phone.
Where to buy cryptocurrencies from: broker or exchange?
One of the initial factors to contemplate is whether it is preferable to opt for a reliable cryptocurrency broker, to begin with, or if an exchange would be a better choice.
Broker to invest in cryptocurrencies
Brokers allow the convenience of having everything integrated into one trading platform – ranging from multiple assets to invest in to analysis tools, research and education, and many more.
On the other hand, an exchange typically only allows you to buy and sell crypto. Here is a short summary of the main pros and cons of choosing a broker for crypto:
|Pros of using a broker||Cons of using a broker|
|✅ Trading platform is usually packed with many tools and useful features||❌ Costs are typically higher than on an exchange|
|✅ Regulated and trustworthy||❌ Crypto offering is usually quite limited|
|✅ Beginner-friendly||❌ May lack advanced tool (such as trading APIs)|
|✅ You can create a diversified portfolio by adding other assets|
Exchange to invest in cryptocurrencies
Exchanges tend to be somewhat more intricate to navigate. However, if you allocate a significant portion of your portfolio to these emerging digital assets, they can potentially be the optimal choice.
Exchanges provide opportunities to generate profits through diverse means, including staking or lending your crypto. If you are new to crypto, you can start with the basics, such as reading this Bitcoin guide and Ethereum guide, along with choosing one of the best crypto wallets to store your crypto assets.
|Pros of using an exchange||Cons of using an exchange|
|✅ Large selection of cryptos||❌ Security can be somewhat weaker than brokers’|
|✅ Multiple ways to generate profit, such as staking or lending||❌ Can be quite complex for beginners|
|✅ Typically lower costs than brokers||❌ You can only trade crypto (no other assets for diversification)|
|✅ Choice of advanced trading tools|
|✅ Suitable for experienced investors|
Summary: best crypto brokers
In summary, the choice between an exchange and a broker for investing in cryptocurrencies depends on various factors. If your investment strategy is closely tied to the crypto industry, exchanges would be the preferable option. Over time, brokers may fall short in providing the range of alternatives found in exchanges.
However, if you intend to venture into the crypto world on a more casual basis, perhaps focusing on widely traded cryptocurrencies like Bitcoin or Ethereum and allocating a smaller portion of your portfolio, a broker that includes cryptocurrencies would be suitable. This approach offers convenience, ease of operation, an intuitive interface, and an additional level of safety.
Are crypto brokers and exchanges regulated in the UK?
Yes, crypto brokers and exchanges operating in the UK are subject to regulatory oversight. The Financial Conduct Authority (FCA) is the regulatory body responsible for overseeing and supervising these platforms.
What factors should I consider when selecting a crypto broker or exchange?
When choosing a crypto broker or exchange, several factors are worth considering. These include regulatory compliance, platform security, reputation, available cryptocurrencies, trading fees and commissions, customer support, user experience, and deposit/withdrawal methods.
How can I ensure the security of my funds on a crypto broker or exchange?
Look for brokers and exchanges that implement robust security measures such as two-factor authentication (2FA), cold storage for funds, encryption protocols, and regular security audits. Additionally, consider platforms that have a track record of no major security breaches and a transparent approach to safeguarding customer assets.