I have been trading with a few crypto brokers and so far my experience has been nothin less than amazing. But is it just me who feels like this ?
Here is what I see as the potential list of pro’s and con’s of a crypto only broker. I will keep updating this list based on common consensus so both newbies and experienced trades can get some help from it.
POSITIVES:
Anonimity of Account: Minimal or NO KYC regulations
Higher leverage: crypto only brokers are not limited by ESMA or CFTC advisory of leverage
Potentially Lower commissions: since these brokers do not have too much overhead cost, I see they tend to compete on spreads and commissions and make it cheaper overall for the trader
Efficient tax management: you can defer your taxes for as long as you want by keeping your profits in your accounts or moving profits to a crypto exchange
Cheaper to send small payments: For those of us, who send or keep small accounts in forex accounts end up paying significant in transaction fees. Example 30$ per wire for a 1000$ account means 3%, and credit card payments are no different. With cryptos that cost goes down to virtually zero or less than 0.1%
Fast (perhaps fastest): Account Opening and time to fund and put your first trade in market is probably fastest
Possibility to trade over the weekends: since crypto markets are 24/7, you can possibly also trade over the weekend if you are trading in cryptos
NEGATIVES:
Difficult to buy cryptos in size: Especially if you are looking to open large accounts say over 25K or more
Not every bank/country is crypto friendly: so if your bank does not allow you to transfer funds to a crypto exchange, you have limited choices on how to buy cryptos. Bank’s think cryptos are “rat poision” and crypto community thinks bank is that “rat”, so there is a constant mutual belittling there
Complex Process : for newbies who have never traded or purchased cryptos, the who process can be very daunting and cumbersone. We all are just so used to funding our forex accounts with debit cards and bank wires.
It will be great if I can get some feedback from other users of the forum and we can potentially have a list of positive and negatives of a crypto only brokers for everyone’s benefit. To maintain simplicity I will take skepticism out of my analysis and will assume that we are only talking about established or reputed brokers who are genuinely trying to change the forex industry landscape
PLEASE NOTE, THIS IS NOT A BROKER LIST. I dont intend to promote or list any brokers on this post but just have opinions on “why” and “why not” should an investor choose to trade with a crypto only broker. I will keep updating positives and negatives based on my experience with crypto brokers and based on opinions on this thread by its participants. If you dont have opinions, please just reply “Yes” or “No” to indicate weather you support or oppose the idea of crypto only forex brokers. Thanks all for your inputs !
@Hadden totally agree and we typically tend to have hesitations before we try something new. Imagine, if we have not tried internet back in 1990’s because it was “slow” and “felt complicated”
Like I said it’s not about making a broker list but crypto revolution and it’s impact on forex industry. I would refrain from naming brokers as there are a lot of threads on this forum that are already doing that very effectively.
Here are a few links from babypips that might give you specific list of brokers.
To answer your question in a more generic sense: I prefer brokers that honour both deposits and withdrawals in cryptos without limiting me in what currency I want to use. I also have an inherent preference for anonymous accounts although that is still rare among a lot of brokers that I have tried. But if you think about it, there isn’t much regulation around cryptos and all KYC norma are more or less self defined by the broker. So if it is not required by regulation, why should I share my private information with broker who then is going’s to store that information with servers that I don’t have control over. So yes, anonymity is a big deal because I believe we should have complete control over our own information and how/who we share it with.
Yes! I prefer trading with a crypto fx broker over a crypto currency exchange anytime because of the ease of starting with them and how SIMPLE setting up accounts with them is. There are no extra fees or charges, your only cost is the spread. Plus you can trade on professional trading platforms MT4 & MT5. You can long/short cryptos & take leveraged positions as well. And the ease of keeping my FX and crypto positions in one place is a big one for me.
the only concerns i have is the pain of cashing/banking out cryptos…. Though I live in a very crypto friendly country but cryptos draw a hefty taxes here. Anyhow the positives overweigh the concerns. Nice post BTW @whywescalp
That definitely is a big plus and something that didnt occur to me before, I will add that point to my list. Thanks for your inputs
There are many ways you can cash out of cryptos (including cash, however it depends on your tax situation and account size) for example www.localbitcoins.com is one such example. Hope that helps.
@whywescalp YES i agree with you. Cryptos are all about making things simple- be it payments or trading and these cryptocurrency based platforms are the means to this end.if I go point by point on your opinion:-
I really appreciate this genre of brokers for saving the traders from revealing the personal details to the third parties unnecessarily. Which then obviously goes to the government to beat the stick on our financial dealings. Now when blockchain is the ruling king and no fiat money is even involved in trading, why to take a chance on your personal info. There is already a huge business of data theft in the intrnl. Market. And KYC for what? Crypto market has no controlling authority, so who views the KYC otherwise.
Yes! Leverage means a lot (to me atleast ). I am not very fond of these leechlike organizations who badger US traders and the brokers around. With crypto fx brokers this problem can also be put to end. they offer good leverage options.
Absolutely! I have seen crypto fx platform with much tighter spreads even 0.0 pips and zero overheads. As they operate trades through cryptos and no extra cost is taken, so commissions are nominal than conventional brokers, which is change im getting use to coming from paying fees for every god damn thing you do starting from depositing to withdrawing.
no taxes till no fiat is involved. Convert only when needed ,till them keep the profits in crypto and capitalize them.
most helpful feature about crypto payments. No extra transaction costs. Otherwise wire transfers actually eat up significant amount of trader funds.
Instant is the word.
I do trade in crypto’s and weekends are actually a game changer many times. Weekdays saved for forex, weekends for crypto.
I even think the cons are considerable but they can be overcome with time. Overall I would say, crypto based brokers are the next BIG thing in financial industry.
Regarding the bank transfers(withdrawals and funding) to exchanges - I found Bitstamp works for my country (Bulgaria).
A lot of the banks here refuse to process withdrawals and funding to and from exchanges. Oddly enough - Bitstamp works.
There is an issue there - the account verification (with that platform) can take up to 2 months. Anyway, once that’s done - you’re golden.
The exchanges do not have an issue with sending or receiving. The banks, however, are a whole different can of worms.
They (the banks) refuse to handle transfers to and from crypto exchanges.
interestingly thats where peer to peer BTC transfer platforms like localbitcoins.com are very helpful. You dont have to use your bank but can use paypal, skrill and bunch of other wallets or simply cash in many cases (if you want to just test it). I dont recommend cash as the best option, but I have tried doing that and found it no more different than buying a pack of cig from a road side vendor
Bank will keep blocking bitcoin for some reason or another. There was an interesting quote that I read which said “If bitcoins are rat poision then Banks are the rats”. I to some extent agree with it and thats why I understand why banks are such a pain when dealing with bitcoin exchanges
Oh, I fully understand why they are doing it.
It’s just pointless. I’ve traded. Made some money. Want to withdraw them - and they do not want to make a commission out of it. Fine.
There are other ways to get my cash. Like for example buying pre-paid amazon shopping cards. And the bank can’t do anything about it. Not to mention that the country will not collect any taxes on my profits, because they will not be transferred to my account (thus I will not have to declare them and get taxed). So, yeah.
It’s a flawed way of thinking, but I get it. They are protecting their own niche/market/monopoly - call it whatever you like.
Paypal doesn’t work as well. Tried and tested. Wanted to make a fund an exchange account via PayPal and the bank (where the money is) blocked it.
So, yeah. There are other financial services that will do the trick. For example, LeuPay (also a payment company with an office over here) have no issue with such transfers. But that’s a separate topic.
I believe, and I stand to be corrected if wrong, that part of the reason for banks reticence may be their obligation to comply with Money Laundering Regulation which, given Crypto’s lack of transparency/anonymity, could be an issue.
Money laundering is a major concern and cryptos have made money laundering easier so there is definitely an argument to be mande there. However, just like money, crypto’s have both a bright side and a dark side.
There is a $400 billion industry where foreign workers send money back to their families abroad and majority of these transactions are done via hawala. At the same time illicit trades as we know off s** and dr** industry thrives on hawala networks. transferwise.com is an online remittance service that in a way used hawala as a use case and created a legit repatriation business around it by performing KYC and letting people exchage money by disintermediating banks.
Bitcoin - Open source P2P money says that bitcoin is a payment network and a new kind of money. Its value is based on mutually ageed upon price just like any other currency (exchange rates). If everyone who opens an account at a crypto exchange is KYC’ed well then there is no issue of money laundering while if you use your own hardware wallets and transfer money then there is no KYC involved.
To make long story short, Bitcoin is not bad. If it was bad and used only for illicit trade then central banks would have easily banned it by now. But there are a lot of good sides to blockchain and cryptos which is why it has become so difficult for central banks to outrightly ban them in the first place.
). I am not very fond of these leechlike organizations who badger US traders and the brokers around. With crypto fx brokers this problem can also be put to end. they offer good leverage options.