Crypto Brokers and Exchanges 2022

Traders are spoilt for choice when it comes to crypto exchanges and brokers. But the vast selection on offer often means investors are left with a difficult decision. In this review, we unpack the factors every trader should consider in their comparison. Plus, we list the best cryptocurrency brokers in 2022 across the globe, covering those in the UK, Europe, USA, Canada and Australia. Check out the table below for the top-ranked cryptocurrency exchanges.

What Are Cryptocurrencies?

Cryptocurrencies are digital tokens where transactions are recorded on a ledger, known as a blockchain. Their popularity has soared in recent years due to the decentralised nature of the technology that underpins them. All records are verified by the network of users as opposed to a central authority, such as a bank or government. This means they’re considered more democratic than traditional financial services since they are owned and managed by people, rather than organisations.

Bitcoin (BTC) led the way as the first cryptocurrency to soar in price. The first bull run was in 2017 when its value rocketed from less than $1,000 to nearly $20,000. The trend began again in 2020, with BTC reaching over $60,000. It is this volatility that has captured the attention of traders looking to profit from the dramatic price changes. Other popular tokens include Ethereum, Cardano, Polkadot and Litecoin, which are offered by many of the top crypto platforms based in London, Melbourne and beyond.

How To Compare Crypto Brokers

There is a range of factors to consider when selecting the best cryptocurrency broker or an online exchange. There are some minor differences between the two, but increasingly, traditional exchanges are now offering brokerage services, such as leverage and futures. We’ve listed the top things to look out for below.

Tokens

The largest crypto coin brokers offer a wide selection of tokens. Traders should look for brokers that support the top coins by market capitalisation, such as Bitcoin, Ethereum, Cardano and Dogecoin. Depending on your strategy, you may also be interested in up and coming altcoins. These may be undervalued currently, but arguably offer increased profit potential vs well-known coins.

The crypto brokers with the most coins tend to be swap-only platforms, such as SushiSwap and Uniswap. These are truly decentralised exchanges where platform users can recommend listings, meaning new tokens will be available to swap all the time. But while the extensive asset list is great for the diversification of portfolios, traders should also note the downsides. There have been examples of ‘copy coins’ that imitate existing tokens with high value. Plus, deposit methods are restricted to crypto coins only. No fiat currency is exchanged through these platforms at all.

Other popular crypto assets include derivatives such as CFDs, futures and binary options. Some of the most popular brokers, including Binance and Kraken, now offer these in certain jurisdictions. Many traditional stock brokers are now offering crypto products too. Interactive Brokers provides cryptocurrency futures and options. Plus, they’re introducing token trading products in 2021.

Crypto Platforms

The top 5 biggest crypto brokers all use their own proprietary platforms to exchange tokens. In general, they’re extremely user friendly, making them perfect for beginners. In particular, Binance, eToro and Kraken allow trade execution in just a few clicks.

For crypto CFDs, platforms such as MetaTrader 4 (MT4), MetaTrader 5 (MT5) and TradingView (all traditionally used for forex), are also popular choices. Note that brokers offering cryptos through these platforms are typically selling derivatives, not the underlying asset. While many traders prefer derivatives, it’s important you understand the instrument you’re purchasing.

Mobile apps are available for many of the top cryptocurrency exchanges, allowing on-the-go execution.

Regulation

Regulation of crypto brokers varies globally. Cryptocurrencies are still a new asset in financial services, so many of the top global authorities have not yet determined the scope of their protection.

In most jurisdictions, the exact rules are unclear. In particular, in the US, the Security Exchange Commission (SEC) considers them securities, while the Commodity Future Trading Commission (CFTC) regards them as commodities. Even more confusingly, many of the top crypto brokers do not allow US citizens to trade. Binance has its own site, Binance.US, for clients in the USA, offering limited tokens and functionality, while BitMex banned US citizens in 2015.

In the UK, the FCA has been more transparent. Crypto trading is legal and many of the top brokers are regulated. Crypto derivatives are restricted for retail traders due to the volatility of the underlying asset.

In Australia, ASIC regulation is not as restrictive. There are no bans on derivatives, but leverage is capped at 1:2. Crypto brokers must adhere to Anti-Money Laundering guidelines, in line with forex and stock brokers.

Across the rest of the world, the rules vary. In Dubai (UAE), crypto brokers are banned. However, most other countries, such as Singapore, Nigeria, Kenya, South Africa, and India, have no restrictions at the time of writing.

Margin

Some major crypto brokers now offer leverage as part of their services. In line with most global regulations, this is usually capped at 1:2. However, depending on your jurisdiction, this can vary.

Leverage, also known as margin trading, allows traders to borrow cryptocurrency from brokers to increase their position size. Investors essentially multiply the results of their trades by executing positions at 2 or 3 x what their original deposit would allow.

Cryptocurrencies are volatile markets, so investing with leverage is risky. Losses are multiplied as well as profits, so traders should consider whether they can afford to take the risk.

Fees

Fees are a vital component of crypto broker selection, as high costs can eat into profit margins quickly. Commission usually fits into one of two types: a flat fee per trade or a percentage of volumes traded over a 30-day period. Both operate in a tiered structure, becoming cheaper per trade the more that you execute.

Maker Taker fees are applied if your exchange does not provide its own liquidity. In this case, if you’re adding liquidity to the books, the exchange will encourage this by providing a rebate. If you’re taking liquidity from the market, you’ll be charged a fee, just as you would with any purchase.

Other costs include gas charges (a fee for completing a transaction on the Ethereum blockchain for example), account inactivity fees, or deposit and withdrawal charges.

Payment Methods

Leading crypto brokers that accept multiple payment methods will usually permit one or more of the following:

• Bank wire transfer
• Credit/debit card
• Crypto deposits
• Skrill/Neteller
• PayPal

Note crypto swap platforms, such as SushiSwap and Uniswap only accept crypto deposits. You’ll need to purchase through a broker beforehand and then move your tokens between platforms.

Security

All good crypto brokers will make security a priority. In the past, there have been some high profile exchange hacks that have caused huge losses to users. In 2014, Mt Gox, an exchange that was handling over 70% of all Bitcoin transactions at its peak, closed its doors and went into liquidation. The company announced over 850,000 Bitcoins were stolen, worth over $460,000. Hackers had been skimming Bitcoins from the exchange for years.

More recently, Bithumb, a South Korean exchange, lost around $30 million in XRP to hackers in 2018. This was shortly followed by a suspected inside job hack that cost a further $13 million.

And these stories are not uncommon. Blockchain technology is still fairly new and many exchanges are small in comparison to the tech giants like Facebook and Google. There is not the same investment in security. But in recent years, the tide has begun to turn. Gemini is now insured against hacks by Aon, one of the largest insurance providers in Europe. And many legitimate exchanges are now regulated by national authorities that require certain customer protections.

The safest crypto brokers will provide 2FA, store customer coins in a cold wallet and will invest heavily in security. Despite this, it is recommended to store tokens in an external wallet with your seed code offline.

Other Functionality

Depending on your requirements, traders may also look for some of the following additional services:

• Crypto prime brokers – Coinbase, BitGo and Genesis Capital offer prime brokerage services to institutional traders.
• Hosted wallets – Many cryptocurrency platforms now offer hosted wallets, meaning that hardware or non-custodial wallets are not required.
• Bot services – There are crypto robots available to purchase online that can be tagged onto platforms. While it’s possible to make a profit using bots it’s a service that is plagued by scammers. Traders should be wary of any that claim to provide passive income. Ensure any bots are thoroughly back-tested before investing real funds.
• OTC crypto brokers – Over The Counter (OTC) services may be preferred by clients who are looking to place large trades filled by a single party. There should be no slippage and no limits on trade size.

Crypto Broker Reviews

Use this table with reviews of crypto platforms to compare all the brokers we have analysed. Note that some of these digital currency brokers may not accept new accounts from your country. If we can determine that a broker would not accept your location, it is marked in grey.

FAQs