How to Choose the Best Broker for Bitcoin Trading
Because there’s so much competition in the Bitcoin exchange market as well as having many brokers and exchanges to choose from, it can be difficult for beginners to know which option will work best. Here are a few things we suggest keeping in mind before you decide on the right online broker for your Bitcoin trading:
Use a regulated Bitcoin Broker or Exchange. The regulatory body develops rules and services protect the integrity of the market, as well as traders, and investors, such as the Financial Conduct Authority (FCA) in the UK. Due to possible safety concerns, open your trading account with a regulated broker.
Bitcoin trading happens 24 hrs a day online, so customer support should be available at all times. You’ll want to be able to speak with a live support person, and many brokerages have a local UK office for ease of use. The representative’s ability to answer your questions regarding spreads and leverage, as well as company details is very telling.
The details of a good broker should be out in the open for everyone to see, either online or otherwise.
Your ideal online broker for trading Bitcoin should be able to offer either multiple account options or provide you an element of customizability. Perhaps the broker even has a separate account for beginners. Look for a Bitcoin Broker that offers competitive spreads and easy deposits/withdrawals.
When selecting an online Bitcoin broker, many just concentrate on Bitcoins. Nonetheless, you should keep in mind there are many other types of investment alternatives offered. Including Forex (FX) currencies, Stocks or shares, ETFs, CFDs, futures or options.
Buying and selling Bitcoins costs money. However, unlike buying stocks or bonds, Bitcoin brokers usually charge a percentage. You may consider looking for an online broker that charges a flat rate fee instead of the percentage model.
Because Bitcoin is traded in a market where people are both looking to buy or sell the currency, it’s crucial to consider the amount of liquidity that an exchange can have. Liquidity is the ability to sell without the price being significantly affected, causing the price to drop.
For more information on Currency and Forex Trading, please see our tutorial: What is Forex?