If you are getting into the world of crypto for the first time without any experience, it would be a shame if your first transaction ended up as a disaster. That is why many people who are beginners in crypto trading decide to use crypto brokers.
What is a crypto broker?
Traditionally, a broker is a person who serves as a middle man, someone that both parties that are doing a transaction can trust. The same applies to brokers for cryptocurrency, as these are platforms where one can acquire some cryptocurrency and sell it safely to a crypto exchange member with no risk.
In some cases, the crypto brokers will also be the crypto exchange party. This is the case if you wish to purchase a lot of cryptocurrencies that they own, but lately, a lot of brokers do not have any cryptocurrency of their own. Instead, they find the best seller for your interest.
In theory, you too could do everything a broker does if you visit a crypto exchange platform yourself. However, if you are a beginner, you probably do not understand much about trading, so it is just best to give your cryptocurrency or fiat currency to a broker and exchange it for whatever you desire.
Of course, if you understand the principles of trading, not just for crypto, but in general, you too could quickly become a crypto broker. The best way to do this is to have a lot of crypto lying around on your wallet. However, if this is the case, you probably already know more information about crypto than this article would provide.
Quick broker vs. exchange explanation
Brokers are an excellent option for beginners who want to see what crypto is all about and make a one-time investment. That is because doing so with a broker is easy and very user-friendly. Most broker platforms are amicable, and they do not have a rigorous account-creating system as a crypto exchange site would have.
In most cases, you would register by simply giving out some basic information and your e-mail without having to confirm your identity with an ID or a video call. That’s right; you would have to do those things on a crypto exchange site, which is why it is very unappealing for beginners or those who want to buy crypto once or twice.
Another big difference in crypto broker vs. exchange is the payment methods available. Brokers often give easy payment options such as using your credit card. For example, Binance, one of the biggest broker sites out there, offers over 60 different payment methods.
Brokers will often provide you with a wallet where you will receive the goods you are looking for, whether you are buying crypto for esports, the mooning cryptocurrency, or even NFTs. Because of that, they also usually have excellent customer support if you are struggling with a transaction or if you have any questions about their services.
What are the advantages of a broker?
Like we said, buying cryptocurrency at a broker without knowledge is extremely easy. It would be like visiting E-bay or Amazon and just ordering the cryptocurrency you are interested in. This is not how easy it would be on a crypto exchange.
You can use various payment methods that are very easy to acquire, where the credit card is the best example. For most crypto exchanges, you would have to use a slightly more complicated payment process, such as a bank transfer, given that your bank supports crypto exchanges.
Getting support from crypto brokers is usually very easy. You can contact them by mail, phone, or even live chat. They will respond quickly, which is often not the case on crypto exchange platforms.
What are the disadvantages?
Since crypto brokers are very convenient, they do charge a fee for their services. These fees are a bit higher when compared to you using the crypto exchange yourself. While this might seem off-putting for some individuals who would like to save that extra buck on their first transaction, the fee is worth it if you are not experienced in crypto.
Exchange platforms usually offer more options than a broker because brokers specialize in making things convenient for specific cryptocurrencies that they already know how to trade with or those they already have on themselves.
Brokers do not offer margin trading options. What is margin trading, you wonder? It is when you have the opportunity to bet money on the change of a specific price for a cryptocurrency. You can say if the price will rise or fall, and you can profit from that without actually buying anything.
Example of buying from a broker
- The first thing is first before you buy anything from a broker, you would have to create an account on their platform, which is usually very simple.
- Second, you place an order on the cryptocurrency or an NFT in a game based on crypto you would like to acquire.
- Third, if the broker does not have said order, they will get one themselves from the crypto exchange after you have already paid them.
- Fourth, they will deliver the order to the wallet they provided you to finalize the transaction.
What are the best crypto broker platforms out there?
Lately, many crypto broker platforms are popping up, as everyone wants the slice of the crypto pie to fill up their pockets. While crypto brokers are trusted because they have to go through the registration process to become a crypto broker officially, some are better than others.
For starters, some of them will do orders much faster than others due to their experience with crypto. On the other hand, some crypto brokers are better than others because they offer more orders and payment types options. But in general, if you are looking for the best cryptocurrency trading site, you might want to check the ones mentioned below.
This broker platform is so significant and widespread that people often mistake it for a crypto exchange considering just how many options they offer to their users. Orders on the platform are done incredibly fast, and the fees they charge are only at 0.1%. That fee is meagre, and you should take advantage of it while it is still like that.
We already mentioned earlier that they offer over 60 of them when it comes to payment options. You will not find anything similar to this on other broker platforms. The convenience is genuinely there, and since the fee is so low unless you make significant investments, the platform is also excellent in the long run. If you want to learn more, you can check out our Binance review.
With a name like that, no wonder they are one of the most popular platforms where users can get their first crypto. This one has slightly higher fees, as they can go up to 0.40%, but they offer specific cryptocurrencies that Binance does not, and the fee drops if you are trading more than $25,000 per month. Of course, you can expect minor differences in all broker platforms that we mention.
Since this is somewhat of a crypto exchange platform, the registration is a bit more complex than most broker platforms. Of course, this also makes the account you create safer. Again, if you want to learn more about this platform, you should check out our Crypto.com review.
Being relatively new, one would be surprised that this platform is praised as much as it is, especially when considering the high fees that range from 0.75% to 5%. There are some pros and cons to this site. Pros: You can copy the strategies of experienced users, try out those strategies on paper trading, and get the cryptocurrency off the platform. Cons: Not available in certain areas(New York and some other states, for example), you cannot return the cryptocurrency to the eToro wallet once you move it out, and the customer service is limited.
Again, checking out our eToro review is advised if you want more information.
You have probably heard about this platform if you were checking out where you can acquire your first cryptocurrency, and there is a good reason for that. A crypto broker platform is on par with Binance if you ask us. Many people tend to use Coinbase as their main wallet, as it is effortless to use, but not for trading as the fees can be high if you do not have Coinbase Pro.
Once you get Coinbase Pro, the fees are sometimes as low as 0.5%, which, to be fair, is still not close to the fantastic 0.1% that Binance offers. One thing that is important to highlight with Coinbase Pro is that you will have more of a crypto exchange experience than a broker one, which might not be what you are looking for as a beginner.