While some traders like to own the currency directly, others turn to the futures market. Futures may be an even more attractive way to play the volatility of digital currencies such as Bitcoin, because they allow traders to use leverage to magnify their gains but also magnify losses.
But futures involve a lot more risk in exchange for that potentially higher reward. Meanwhile, crypto exchanges are limited to digital currencies, though you can own the currencies directly and can often buy several, rather than simply Bitcoin or Bitcoin futures, as you would with a general broker. Here are the best brokers for cryptocurrency trading, including traditional online brokers, as well as a new specialized cryptocurrency exchange.
You might also want to check out which brokers offer the best bonuses for opening an account to determine where you can get a little extra. Robinhood is a great option for buying cryptocurrency directly. Interactive Brokers lets you trade four cryptocurrencies directly, including Bitcoin and Ethereum, for one of the lowest commissions in the market.
It also allows you to buy Bitcoin and Ethereum futures rather than owning the currencies directly. In addition, Interactive Brokers brings its full suite of investment offerings, so you can buy almost anything that trades on an exchange. Though Webull may be less known than its rival commission-free trading app Robinhood, it provides investors with a solid offering that includes cryptocurrency trading. Several cryptocurrencies are available for trading, including Bitcoin, Ethereum and Cardano.
Charting tools and an impressive mobile app make Webull a broker worth considering. Traders have a couple options at this broker, which has rolled out direct currency trading via TradeStation Crypto, with commission-based pricing for traders. Pricing is based on your account balance with the broker and whether your order is directly marketable. Normally pricing ranges from 0. Traders can also buy and sell Bitcoin futures as well as take advantage of substantial volume trading discounts. Binance is a specialized trading platform that allows you to buy and sell digital currencies, including the largest such as Bitcoin and Ethereum but also dozens of other much smaller coins, too.
The commission structure at Binance is low and only gets cheaper the more you trade. Trading fees start at 0. Coinbase is a specialized cryptocurrency-focused platform that allows you to trade digital currencies directly, including Bitcoin, Ethereum , Solana and Tether. It charges a spread markup of about 0. One major feature at eToro is CopyTrader, which allows you to follow and identify other top traders on the platform and copy their trades. Be sure to do your research before committing to this strategy.
Kraken is a cryptocurrency exchange that allows you to trade in dozens of different digital currencies such as Bitcoin and Ethereum, as well as emerging ones such as Cardano and Solana. More active traders can benefit from a premium tier called Kraken Pro, where the fee range declines to 0.
Kraken is not yet available to residents of New York and Washington state. Schwab also has no account minimum, but any futures contracts you trade will require some minimum margin to hold them open. However, TD Ameritrade does not allow trading directly in the digital currency.
Charles Schwab has purchased TD Ameritrade , and will eventually integrate the two companies. If not, you may want to turn to a cryptocurrency exchange, since they offer more choice of tradable cryptocurrencies. How We Make Money. Editorial disclosure. James Royal. Written by. Bankrate senior reporter James F. Royal, Ph. Edited By Brian Beers.
Edited by. Brian Beers. Brian Beers is the senior wealth editor at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money. Reviewed by. Kenneth Chavis IV. Share this page. Bankrate Logo Why you can trust Bankrate.
Investing disclosure: The investment information provided in this table is for informational and general educational purposes only and should not be construed as investment or financial advice. Earn high yield, access new tokens early, join our mining pool , or use your crypto assets for taking out a low-interest loan. Keep up with crypto and hone your skills with tutorials, market analysis and research.
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They don't know how their risk tolerance and age can affect their choices. You can take a few steps to figure out your personal risk tolerance. Begin by completing a risk tolerance questionnaire to get a feel for your level of comfort. Include any concerns you may have about your age, to guide you in pinning down a risk profile. It will help you find the right investments to include in your profile. Think about taking advantage of the information sessions and educational resources provided by the financial services firm that manages your k.
You can often meet one-on-one and get personalized guidance. It also helps to study on your own. Learn some of the terms so you become more familiar with how a k works. Knowing your risk tolerance and a bit about the investment will help you decide how much you want to save. It will guide you to a point where you're comfortable allocating your money.
Many people forgo saving for retirement when they begin working, but early contributions form the initial earning potential for your account. You should start early. Do your best never to miss a contribution so you can make the most out of a k , even if you have to reduce the amount you save once in a while. There's still time to build an account if you get a late start in your 40s or 50s.
You're allowed to make increased contributions to your k when you turn These are called "catch-up" contributions. Many large employers offer k contribution matching. Your employer makes a matching contribution up to an absolute maximum if you save to your k. One good rule of thumb is to save at least enough to get the employer match.
You're turning down free money and the returns that the money could earn if you don't take advantage of employer matching. There's no one-size-fits-all k contribution amount for everyone. It's best to save as much you can afford to without hurting your other financial goals and obligations. You might be placing too much into your account if you don't have enough left over to pay your rent or reduce your credit card debt. You'll have even more money working for you if your employer matches your contributions.
Many people experience life changes within a year. You should adjust your savings and portfolio balance whenever you have a big change that affects your finances, such as buying your first home or having a child. Work through your finances to decide how much you can put into your k each month. The amount you come up with is called your "deferral percentage. Your portfolio is the collection of assets you have. You have nine investments in your portfolio if you have three mutual funds, three stocks, and three bonds.
This mix is also diversified. It's made up of different assets, which reduces the risk. You have many options for planning your diversification. One is the " minus age " rule. The percentage of stocks in your portfolio should be the number you arrive at when you subtract your age from The rest should be made up of mutual funds, bonds, or other investments.
You can go on about your work and life and let the k do its job after you've set up your deferral percentage and chosen your investments, but you should follow a few maintenance tips. A year-old using the " minus age" technique would rebalance their k by reallocating their stocks into mutual funds or funds into stocks to reach the percentage required.
You shouldn't have to buy and sell from your k every time the stock market dives or climbs. Assessing your risk tolerance and balancing your portfolio from the start should keep you from having to move money back and forth during market ups and downs. Don't forget to give your k a raise as well when you get a raise.
You'll still enjoy the raise, but you'll also increase your savings. Most k plans offer a hardship withdrawal option, as well as a loan option if you find that you have to take money out of your plan before you retire, but there are limitations and downsides. You'll have to pay it back with interest by a certain time if you take a loan from your k. This information is presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any one investor.
It might not be right for all investors. Investing involves risk, including the loss of principal. Power Finds. They represent an enormous emerging market for both crypto-native service providers and forward-thinking legacy financial players alike. A k plan is a tax-advantaged retirement account that many employers offer to their employees.
Employees can contribute to their k accounts through automatic payroll withholdings up to a pre-set annual limit, and employers typically match some or all of these contributions. Investment earnings made via a traditional k plan are not taxed until the employee withdraws that money upon retiring. Most k s only allow employees to invest in mutual funds and exchange-traded funds ETFs. However, if your employer offers a self-directed k , you may be able to directly allocate your funds to alternative investment vehicles such as cryptocurrencies.
Additionally, a number of FinTech startups have begun offering crypto-specific k plans to their institutional clients. However, as mainstream interest in digital currencies continues to grow, many other k providers are now looking into crypto retirement plan offerings of their own. An IRA account is a tax-advantaged account that allows investors to save for retirement with tax-free growth or on a tax-deferred basis.
IRAs usually classify crypto as property, and income from buying or selling crypto via an IRA is usually treated as a capital gain — which, depending on the type of IRA, could be either tax-free or tax-deferred. There are several different types of IRA accounts, and, as is the case with k s, the investment choices available in most IRAs are limited to fairly conservative financial products.
As a result, when it comes to investing in crypto through an IRA, there are two main options to choose from:. SDIRAs allow investors to invest in alternative asset classes that are typically excluded from conventional IRAs, such as real estate and precious metals. In order to hold assets in a crypto IRA, you must make the investments through a limited liability company LLC and place orders through a cryptocurrency exchange that is compatible with your crypto IRA provider.
More specifically, one must:. You may also be able to purchase and trade crypto via brokers or by investing in a private placement fund that holds crypto, depending on your SDIRA provider. Their position as custodians also means these service providers can help you recover access to your crypto IRA account if you forget your password. Instead, you can simply set up an IRA with a service provider, use your account details to create and fund an account on a participating crypto exchange, and begin trading immediately.
A number of crypto-native startups such as BitcoinIRA and BitGo offer crypto IRAs, and several legacy retirement fund providers have also begun offering support for crypto investments. Investing in bitcoin and other cryptocurrencies for retirement can be a good diversifier and may enhance your investment returns. Conversely, it may also inject more risk into your retirement portfolio.
Additionally, IRAs that allow you to invest in crypto may have high fees to cover the unique security and custody requirements and additional reporting duties required by the IRS for crypto investments. On top of that, it can cost several thousand dollars just to set up and fund a SDIRA, and if you prematurely withdraw funds from a crypto retirement account, your earnings will likely be taxed at the standard capital gains rate.
Every crypto investor should carefully vet their potential investments and only use reputable exchanges and service providers that fully comply with local and federal regulations. This is especially true if you are investing for your retirement. Cryptopedia does not guarantee the reliability of the Site content and shall not be held liable for any errors, omissions, or inaccuracies.