Table of contents:
- 1 The trading offer in the Crypto Broker Test
- 1.1 Use leverage when trading with cryptocurrencies
- 1.2 Crypto trading costs – Costs and fees to consider
- 1.3 Choose a broker with the lowest possible spreads
- 1.4 CRYPTO BROKER FEES COMPARISON: NOTE OTHER COSTS
- 1.5 AVOID INACTIVITY FEES WHEREVER POSSIBLE
- 1.6 Accounts and accounts with the Crypto Broker
- 1.7 ONLINE BROKER COMPARISON CRYPTO: DIFFERENT REQUIREMENTS FOR THE MINIMUM DEPOSIT
- 1.8 Trading platforms and mobile trading possibilities at a glance
- 1.9 BROKER CRYPTO COMPARISON: USING THE TRADING PLATFORM OF A BROKER OR A THIRD PARTY
- 1.10 USE MOBILE APPS TO TRADE ON THE GO
- 1.11 Usability and clarity of the website
- 1.12 Customer support: How well can you reach the employees of the crypto broker?
- 1.13 Placing value on good accessibility of a broker
- 1.14 Broker crypto comparison: Which additional offers can be used as a trader for crypto trading?
- 1.15 START TRADING WITHOUT RISK WITH A DEMO ACCOUNT
- 1.16 USE FURTHER ADDITIONAL OFFERS WITH A CRYPTO BROKER
- 1.17 Consider regulation and deposit protection in a crypto broker comparison
- 1.18 Broker crypto comparison: opinions of the trade press and awards of the broker
- 1.19 Crypto currencies put to the test: market overview and outlook
- 1.20 THE FUTURE DEVELOPMENT OF DIGITAL CURRENCIES
- 1.21 Use comparisons and crypto broker experience reports
Trading in crypto currencies such as Bitcoin or Ethereum is also becoming increasingly popular among private investors. This trend has also been recognized by many Forex and CFD brokers, which is why they now also offer the possibility to trade the digital currencies. However, experience shows that it is not so easy to choose the right broker for you. So it is not only the trading offer as well as the trading conditions to consider, rather one should as an investor and trader also attach importance to a good trading platform. In the following we will discuss which further test criteria we use for a crypto broker comparison and which points you should pay particular attention to.
The trading offer in the Crypto Broker Test
The first thing to do is to check with a broker to see what is available for trading. We have often noticed that the individual providers sometimes differ considerably in this respect. For example, some brokers limit themselves to two or three crypto currencies. This is quite little, considering that there are now many thousands of crypto coins. However, experience shows that trading is mostly limited to the top 10 or 20, including Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Bitcon Cash (BCH) and Litecoin (LTC). So if a broker offers you some of the crypto-currencies mentioned, you are usually already on the safe side.
Most of the time, trading with such a broker is done via CFD. This means that the trade takes place only between the trader and his broker. Overall, trading in this way offers numerous advantages:
- There is a lever available.
- You can use the same platform as you are used to trading with indices, currencies, commodities etc.
- Usually a free demo account is available to test trading CFDs.
Use leverage when trading with cryptocurrencies
Those who have been trading for a while will know that leverage plays an important role in CFD trading. The amount of leverage depends on the traded underlying asset. For example, it is highest for currency pairs (e.g. euro/US dollar) at 1:30 and lowest for trading crypto currencies at 1:2. Here is an example: We trade with Bitcoin and decide to go long (“buy”) the crypto currency at the price of 10,000 US dollars. Normally, this would require $10,000 in your trading account. However, if you use the leverage in CFD trading, a sum of 5,000 US dollars is enough to trade with Bitcoin. As you can see, the available trading capital is therefore “leveraged”.
- Which cryptocurrencies are available for CFD trading?
- What other underlying assets can be traded with the broker?
- Use leverage also when trading with crypto CFD
Crypto trading costs – Costs and fees to consider
In addition to the trading offer, the trading costs also play a very important role when trading with crypto currencies. The costs and fees that can arise when trading with crypto CFDs can be divided into the following three categories:
- Costs that are incurred with each individual trade (usually due to the spread)
- Fees charged by the broker for deposits or withdrawals
- Other costs and fees (for example, inactivity fee or costs for the trading platform)
Choose a broker with the lowest possible spreads
Experience has shown that the costs that you have to pay to the broker for each individual trade play a particularly important role when trading with crypto-currencies. Normally a broker charges these fees in the form of a spread: This is the difference between the purchase price and the selling price. The larger this difference is, the higher the costs for the trader. For crypto currencies, the spread is often expressed in percentage points. This can best be illustrated with an example: We trade with Bitcoin again and assume that the spread for this is 1%. If the crypto currency is quoted at $10,000, this means that the Bitcoin including the spread is available at a price of $10,100. On the other hand, if you trade with a broker where the spread is only 0.50%, you would only have to pay USD 50 in fees in this case.
Most of the time, the spread is the lowest with Bitcoin. Anyone wishing to trade in more exotic crypto currencies should therefore bear in mind that the costs can also increase as a result.
CRYPTO BROKER FEES COMPARISON: NOTE OTHER COSTS
As already mentioned, there are other costs besides the spread that traders should be aware of. For example, it is common practice for many brokers to charge their customers for deposits or withdrawals. We will discuss this point in more detail later in this article. With some brokers you also have to pay a fee for the trading platform. However, there is usually always the possibility to use at least one platform free of charge. You should also pay attention to fees that arise from holding positions overnight. In this case, financing costs are usually due.
AVOID INACTIVITY FEES WHEREVER POSSIBLE
Some brokers also charge a so-called inactivity fee. This is incurred if you do not use your account for active trading for a certain period of time. The period is usually between three and twelve months. Also with regard to the amount of the fee, the providers sometimes differ considerably. We therefore generally recommend closing the trading account if you no longer need it for trading. If necessary, it can then be reopened at any time. In this way, inactivity fees can be avoided.
- Select brokers with the lowest possible spreads
- Fees may also be incurred for deposits and withdrawals
- Avoid inactivity fee if possible
Accounts and accounts with the Crypto Broker
To start trading crypto currencies, it is necessary to open a trading account with a crypto broker. Fortunately, most brokers have made this process quick and easy. To open a trading account for live trading, the following information is usually required:
- Personal details (for example name and address)
- Information on the financial situation (income and assets)
- Previous trading experience
- It is also usually necessary to confirm your identity and address. To do this, it is usually sufficient to send your identity card to the broker (by e-mail or by uploading it on the broker’s website). It is also necessary to make a minimum deposit into the account.
ONLINE BROKER COMPARISON CRYPTO: DIFFERENT REQUIREMENTS FOR THE MINIMUM DEPOSIT
With many crypto brokers you often have the choice between different trading accounts. Very often, the accounts differ mainly in the spreads offered and in the levers available. Sometimes there are also special accounts for beginners and advanced traders. Occasionally, some brokers also offer their customers so-called VIP accounts. On these accounts, one often receives not only very good trading conditions, but also additional services: Examples of this are preferential treatment in customer support, better training offers or extensions to the trading platform. With some brokers you can choose freely between the different trading accounts. In our experience, however, it often depends on the deposit made whether you can use a VIP account, for example.
To start with crypto trading, many brokers only need a few 100 €. For a VIP account, the minimum deposit can also be in the four or five-digit range. However, in our experience, it is usually quite sufficient to open a “standard” account with a crypto broker. In general, it is advisable to take a close look at the differences between the respective accounts. In this way, you can decide for yourself what conditions and services you need.
If, on the other hand, you only want to open a demo account to test a Crypto Broker, you usually only need to provide your name and e-mail address to register. In this way, you can usually start trading (with virtual money) after just a few minutes.
Many brokers offer different accounts for trading crypto currencies.
Often the “standard” accounts are sufficient.
Opening an account is very uncomplicated with most brokers nowadays.
Trading platforms and mobile trading possibilities at a glance
If you compare several brokers with each other, you should also take a closer look at the respective trading platforms of the providers. As a trader, one usually spends many hours a day analyzing the charts and looking for signals for profitable trades. You should be supported in this activity as much as possible by your trading platform. For the technical analysis you need various drawing tools. Examples are trend lines, support and resistance lines and channels. On the other hand, the trading platform should also provide numerous indicators. In our experience, the following indicators are often used when trading crypto currencies:
- Moving averages
- RSI indicator
- MACD indicator
In addition to technical analysis, a trading platform should also support other tasks. These include money management, for example. As a trader, you should always have an overview of which positions are currently open and which trades you have executed in the past with what results. It is also useful if the platform also enables automatic trading. This way you are not forced to spend the whole day in front of the trading screens. Instead, you can let the software automate your strategy trading. This possibility is especially interesting for those traders who can only trade on the stock exchange as a sideline.
BROKER CRYPTO COMPARISON: USING THE TRADING PLATFORM OF A BROKER OR A THIRD PARTY
Nowadays, many brokers offer a choice between their own in-house trading platform and third-party software. The best known third-party platform is MetaTrader (MT). The MT is used by traders all over the world and it convinces above all with its range of functions. The software has numerous drawing tools for chart analysis. Furthermore, the MetaTrader is equipped with over 30 technical indicators. In addition, one receives this basically free of charge.
Another advantage of the MT is that the platform can be easily extended with additional functions. Many of these extensions are offered for free. As you can see, you should definitely try out the MetaTrader. However, we have made the experience that more and more brokers nowadays are starting to develop their own trading platforms. The quality of these platforms can vary greatly. It is therefore recommended to try out the broker’s trading software in a demo account before you finally decide on a specific provider for crypto trading.
USE MOBILE APPS TO TRADE ON THE GO
In the meantime, almost all brokers offer the possibility of using a mobile version of the trading platform as an app. This is very practical, because it allows you to access your trading account even when you are on the road. The apps can be found as usual either at Google Play or in the Apple App Store. However, it is important to have a computer with a large screen available for chart analysis. The displays of smartphones and tablets are usually too small for this. It is also important that you can use a mouse to draw the lines. An app should therefore be considered above all as a useful addition.
Using a broker’s self-developed platform or the MetaTrader
Test and compare trading platforms best on a demo account
Use mobile apps for trading on the go
Usability and clarity of the website
For a crypto broker evaluation the website of the provider also plays a very important role. In our experience, you can often tell from the broker’s website whether you are dealing with a customer-friendly and reputable company. For us, the following points play a particularly important role:
- How clearly is the website structured?
- Is information about the trading offer as well as the costs and fees easy to find?
- Is it obvious at first glance how to contact the broker?
- Does the website provide information on regulation and deposit insurance?
- Does the website work well on mobile devices such as smartphones and tablets?
In general, we advise against brokers who try to “hide” important information from website users. Fortunately, however, most providers today are quite transparent about their trading conditions. Another positive aspect is that most of the websites are also available in German for German-speaking customers. However, there are also better and worse providers in terms of translation quality. This problem does not arise with a German broker. Nevertheless, in our experience you can open a trading account with a broker based in the European Union without any concerns. We will discuss this point in more detail later in this article.
Pay attention to clarity and user-friendliness of the website
Can you quickly find all the important information for the crypto trade (including trade offers and trading conditions)?
Is it obvious at first glance how to contact the broker?
Customer support: How well can you reach the employees of the crypto broker?
Overall, in our experience, good brokers also distinguish themselves by providing their customers with easily accessible and competent customer support. In general, the following possibilities exist for contacting the employees of a broker:
- by telephone
- by e-mail or contact form
- via Live Chat (via the website)
- via WhatsApp
- via Facebook
Frequently, questions can still be answered best and, above all, fastest by telephone. It is therefore a pity that more and more brokers today are foregoing this method of contact. As a rule, this is supposed to save costs. Therefore, if a broker also offers a telephone hotline for support, this is a very good sign. With some providers it is even a free telephone number.
Overall, as a customer, you should also make sure that German employees are also available for support. It is also important that inquiries are answered as quickly and competently as possible. There are also differences with regard to the business hours of the support: some brokers can be reached around the clock, while other providers restrict themselves to the trading hours on the European stock exchanges.
Placing value on good accessibility of a broker
Good brokers usually also offer their customers a German hotline (preferably free of charge)
Pay attention to the business hours of the customer support
Crypto Broker Comparison: Which payment methods are available to customers?
If you compare several crypto brokers with each other, you will usually also find that they offer different payment methods. Thus, deposits and withdrawals can basically be made in the following ways:
Credit cards (for example MasterCard, Visa and American Express)
Payment service provider (e.g. “Immediately”)
Online Wallets (for example PayPal, Skrill, Neteller and WebMoney)
Often it also depends on the payment method used whether the broker charges a fee for the deposit or withdrawal. Some providers are also very customer-friendly and generally waive such fees. In any case, it makes sense to inform yourself in advance about possible fees. For example, it can also happen that your own bank or savings bank charges for transfers. You should also note that transfers are usually the slowest way to send or receive money.
Many brokers offer the following payment methods: Bank transfer, credit cards, payment service providers and online wallets
Very customer-friendly brokers waive fees for deposits and withdrawals
Transactions by bank transfer usually take the longest time
Broker crypto comparison: Which additional offers can be used as a trader for crypto trading?
More and more brokers today also offer their customers numerous additional offers. Therefore you can compare the individual providers with each other in this respect. For example, training courses are popular in this respect. These can help beginners in particular to familiarise themselves with trading crypto currencies. Brokers often rely on webinars, videos and trading articles. Overall, in our experience it is very instructive to watch experienced traders trade. Therefore, we recommend that you also use the webinars and videos of the brokers to increase your knowledge.
START TRADING WITHOUT RISK WITH A DEMO ACCOUNT
It is particularly important to apply the new knowledge to trading yourself. For this you can use a free demo account with most brokers. Normally, real-time prices are already available on such an account in order to simulate trading realistically. However, you do not trade with real money, but with virtual capital. This way you can get to know trading with crypto currencies without risk. Often a virtual credit between 10.000 € and 100.000 € is available for this purpose. However, many brokers limit the demo phase to 15 or 30 days. However, if you need more time to test the broker, you can usually extend the demo account without any problems.
In general, a demo account is a very good way to get to know a broker better and to familiarize yourself with the provider’s trading platform.
USE FURTHER ADDITIONAL OFFERS WITH A CRYPTO BROKER
In addition to the training offers and the demo account, many providers also offer other additional services. A good example of this is an economic calendar. Such a calendar contains important dates and events which will in all probability lead to price movements on the markets. Therefore, it makes sense for traders to look at the economic calendar at least once a day.
All in all, a good broker can often be recognized by the fact that he provides his customers with useful additional offers.
- Use training offers to familiarize yourself with trading
- Train crypto trading on free demo account without risk
- Watch out for other additional offers (e.g. business calendar)
Consider regulation and deposit protection in a crypto broker comparison
Before finally deciding on a particular broker, one should also consider the important issues of regulation and deposit protection. When it comes to the question of which state authority is responsible for the supervision and control of a broker, it is primarily the registered office of the provider that plays a role. For example, German brokers are regulated by the Federal Financial Supervisory Authority (BaFin). A popular location for crypto brokers is also Cyprus, for example. There, the supervision and control is carried out by the Cypriot financial supervisory authority CySEC. The country has been a member of the European Union for many years, which has numerous advantages for the trader: European law also applies in Cyprus, which means, for example, that customer deposits must be kept separate from the broker’s other assets. Furthermore, the EU is known to be very strict when it comes to data protection.
Deposit protection is also very important. In an emergency, this protects customer deposits up to a certain amount. Usual amounts are between 20.000 € and 100.000 €. All in all, we recommend that you choose a broker with its head office or branch in the European Union. Because this ensures that the provider is regulated and that there is also a deposit insurance.
- Regulation and deposit insurance play a very important role when choosing a broker
- It is best to choose a broker with its headquarters or branch in the European Union
- Observe the level of deposit protection
Broker crypto comparison: opinions of the trade press and awards of the broker
In a broker comparison, it is also useful to look at how the trade press judges the individual providers. Important criteria in this context are the trading offer of crypto currencies and the trading conditions. In addition – as shown – the trading platform and customer support also play a very important role.
Many brokers often advertise on their websites with awards, which they have received from financial magazines, financial portals or at trade fairs. The most important thing is from whom the broker received this award and also the question in which area the provider was awarded.
For example, the title of “Best Crypto Broker” is very meaningful if it is the result of a customer survey with several thousand participants. If, on the other hand, the award was only given by a small website, the significance is rather low. In addition, one should pay attention to whether the broker received the award “only” for his trading platform, for example, or whether the provider was positively evaluated as a “total package”.
All in all, in our experience it is very important to try out a broker yourself. As shown, you can very well use a demo account for this purpose.
- How does the trade press rate a particular broker?
- Has the provider already received awards such as “Best Crypto Broker”?
- Who presented the award?
Crypto currencies put to the test: market overview and outlook
All in all, the market for crypto currencies has changed a lot in the last few years. Thus the history of Crypto Coins began in 2009 with Bitcoin. At that time, however, the success of the digital currencies was not yet foreseeable. They were developed with the idea of providing a better alternative to conventional currencies such as the euro or the US dollar. However, especially at the beginning they were only a niche product. Due to the strong price increases (especially of the Bitcoin), more and more people and especially the media became aware of the crypto currencies.
This is not really surprising, because in 2017 Bitcoin, for example, managed to rise from around 1,000 US dollars to almost 20,000 US dollars. It is therefore not surprising that many traders are fascinated by these massive price increases. For example, there are many analysts who see the crypto currency at 100,000 or even 500,000 US dollars in a few years. In comparison, the current valuations appear to be very low. However, before using real money in crypto trading, it is advisable to first get used to the strong price movements of the digital currencies in a demo account.
THE FUTURE DEVELOPMENT OF DIGITAL CURRENCIES
In the meantime, the crypto currencies have also arrived in everyday life. For example, in more and more online shops you can also pay with Bitcoin. In addition more and more investors are interested in the crypto currencies. Thus also ever more large investors (for example banks and insurance companies) use crypto currencies, in order to diversify their depots, in order to set up themselves thereby broader.
All in all, we can therefore observe a growing demand, which will tend to lead to ever increasing prices. However, there will also be repeated corrections. These can then be used to buy Crypto Coins at lower prices. As an investor and trader, however, you should not only concentrate on Bitcoin. The block chain technology on which Bitcoin is based cannot only be used for digital currencies. Rather, Blockchain is also suitable, for example, for securely storing large amounts of data or for making transport chains forgery-proof. This is very important, for example, when it comes to the production and distribution of drugs. Overall, it can therefore be assumed that the crypto currencies will continue their triumphant advance in the future.
- Very strong price movements in the crypto currencies
- Crypto Coins will also become more and more common in everyday life
- Great potential of the blockchain technology
Use comparisons and crypto broker experience reports
In this article we have gone into great detail about how to proceed with a crypto broker comparison. First of all, it is important to consider which crypto currencies you want to trade with. Because the trading offers of the individual brokers differ in this point, sometimes considerably. On the other hand, if you plan to trade exclusively with Bitcoin or Ethereum, you will find what you are looking for in most crypto brokers. In addition, the individual brokers should also be informed about their trading conditions with one another.