Trading cryptocurrencies in the US is legal, but it is more restrictive than you might find in other global jurisdictions. A few of the highest-rated exchanges in the world originated in the US market. However, finding a reputable crypto broker or exchange in the US market is not a daunting task. Take a look at our list of best brokers in the USA to help you in your search.
To trade cryptos in the US, a trader must select either a crypto exchange in the USA or brokers offering cryptocurrency trading. Several exchanges and brokers are highly recommended for this purpose, but your individual needs will dictate which one is the right fit for you. We are here to help you with making that choice. If you are just starting your trading journey, we have information that will help guide you from opening an account in the US to information on where you can trade crypto in the US. Read on to find out more.
CFDS ARE COMPLEX INSTRUMENTS AND COME WITH A HIGH RISK OF LOSING MONEY RAPIDLY DUE TO LEVERAGE. 79% OF RETAIL INVESTOR ACCOUNTS LOSE MONEY WHEN TRADING CFDS WITH THIS PROVIDER. YOU SHOULD CONSIDER WHETHER YOU UNDERSTAND HOW CFDS WORK AND WHETHER YOU CAN AFFORD TO TAKE THE HIGH RISK OF LOSING YOUR MONEY.
It is legal to trade crypto in the US market. Exchanges currently have minor regulatory oversight, only following the rules laid out in the Bank Secrecy Act and the Securities and Exchange Commission (SEC). Forex brokers, regulated by the Commodity Futures Trading Commission (CFTC), have slowly joined the crypto fray and now offer limited crypto trading support in the US market.
Of the exchanges in existence today, only a subset offers market access services in the US. Major exchanges such as Coinbase, Kraken and Gemini have a daily volume turnover that puts them in the top dozen of all global exchanges. However, exchanges and brokers may limit the number of coin programmes they support. Coin programmes must pay a considerable sum and justify market trading of their tokens before any exchange or broker will accept them in their crypto offering portfolio.
Traders may trade crypto from either an exchange or an online broker in the US market. Brokers tend to limit their offerings, choosing to focus on the major programmes where related volumes can cover support costs. The market has also evolved to support institutional trading of options on a handful of exchanges devoted to this genre, but access may be prohibitive for the average retail trader.
Globally, there are two ways to trade crypto: via exchanges and brokers. Except for institutional trading of crypto options in the US, exchanges allow you to buy and hold the crypto token of choice from their portfolio offering. Depending on the security precautions of the exchange, you may want to investigate having a ‘wallet’ to store your crypto assets. Most exchanges in the US have instituted tightly controlled offline ‘cold storage’ wallets to secure your assets from the possibility of an external hacking compromise.
Brokers offer two ways to speculate with crypto assets, either the traditional form of owning the asset or speculating on price by way of a derivative. A derivative does not require you to actually own the crypto asset, thereby dispensing with the need for a wallet or offline cold storage procedures. The most popular crypto derivative is a contract for difference (CFD), which is a wager between you and your broker on the future direction of a crypto’s price. Unfortunately, regulators in the US currently forbid the trading of CFDs in the US market.
Even at the best Bitcoin brokers in the USA, opening a US crypto trading account is very similar to opening one in any other global market jurisdiction. There are six steps in the process:
Bitcoin brokers in the USA came later in the process, but fee levels have changed as competition has increased. Fees come in three types: trading fees, deposit/withdrawal charges, and margin borrowing costs. On average, trading fees can average roughly 0.4%. Binance, the largest exchange, can be as low as 0.2% or 0.1%, but do not be misled by fee rates meant for institutional traders that trade huge amounts of volume. Deposits tend to be free, with withdrawal fees to cover some banking costs. Also check with your bank. Margin interest rates are usually posted on the broker’s website. It is always advisable to compare broker fees using a broker comparison table.
Which broker is best for cryptocurrency in USA?
When looking for the best crypto brokers in the USA, individual traders will always have differing needs to satisfy in such a search. Coinbase ranks highly for beginners, while Gemini is often cited as the best from a security perspective. If you are an experienced trader and want low fees, then Kraken tops the list, but if you want an online broker of Bitcoin and other altcoins with high ratings, then eToro may be worth considering.
Is trading crypto legal in the US?
Trading in the US is legal, as long as the exchange or broker complies with the stipulations in the Bank Secrecy Act. These rules pertain to anti-money laundering statutes and Know Your Customer regulations.