Best Ethereum Trading Brokers 2020
In this article, we will look at how to trade Ethereum simply online as a CFD. When you trade Ethereum with a CFD broker you can use it as a leveraged product, just like Forex. You can open a trading account with a recommended broker within just a couple of minutes and start trading immediately. When you trade Ethereum, rather than buying it outright you are actually speculating on the price, rather than buying the underlying stock. Let’s explore the benefits inside.
The brokers below represent the best Ethereum Trading Brokers.
|Broker||Rating||Official Site||Regulations||Min Deposit||Max Leverage||Trading Platforms||Foundation Year||Publicly Traded||Trading Desk Type||Currencies||Commodities||Indices||Stocks||Crypto||Commission on trades||Fixed spreads||offers promotions||Official Site|
CMC Web Platform
Dealing Desk, Market Maker
cTrader, MT4, MT5
90% of retail CFD accounts lose money
CySEC, FCA, FSC
90% of retail CFD accounts lose money
IRESS, MT4, MT5
75% of retail CFD investors lose money
ASIC, CySEC, FCA, MiFID
cTrader, Currenex, eToro Platform, Keystone, Marketspulse, Mirror Trader, MT4, MT5, Tradologic, Zulutrade
Market Maker, No dealing desk, STP
75% of retail CFD investors lose money
The Broker offers a diverse range of trading instruments such as shares, FX pairs, indices, cryptocurrencies, commodities, and treasuries. These instruments total to over 10,000. Known for its exceptional bespoke trading platform, the company attracts all types of traders, both newbies, and veteran traders. Besides the trading platform, the broker claims to offer reliable customer support, competitive spreads, fast deposit and withdrawal times and much more.
OctaFX is a Forex and CFD trading platform with a focus on low, competitively priced spreads. It supports MT4, MT5, and cTrader trading platforms. cTrader offers the lowest costs, but does require a bit more experience. Novice traders are best starting off at OctaFX using MetaTrader 4, which supports micro accounts.
OctaFX supports 28 currency pairs, a smaller number than many competitors. You can get leverage up to 500:1 for currencies. Different leverage is available for metals, indices, and crypto trading. OctaFX was founded in 2011 and is based in and licensed in Saint Vincent and the Grenadines. Read our detailed review of OctaFX here.
FXTM, short for ForexTime, is a platform with a primary focus on foreign exchange. That specialization allows it to rise above many others when it comes to Forex focused trading platforms and tools. CFDs are available on 50+ currency pairs including major, minor, and exotic pairs. Leverage is available up to 1000:1.
Spreads are competitive across all platforms with 24-hour trading open 5 days per week. FXTM is based in Cyprus and licensed by the International Financial Services Commission (IFSC), Cyprus Securities and Exchange Commission, and other regulators in and out of the EU. A free demo account is available. Read our detailed FXTM review here.
This brokerage offers a massive range of tradable assets through Forex, CFD, and share trading accounts. FP Markets supports the MT4, MT5, and IRESS platforms and offers leverage up to 500:1. You can trade 45 currency pairs with competitive spread or commission pricing.
FP Markets was founded in 2005 and is headquartered in Sydney, Australia. It is regulated by by the ASIC in Australia. Demo accounts are available. While it is suitable for beginners, education resources are limited.
eToro is an online trading platform that was founded in 2007 by the Assia siblings and their friend David Ring in Tel Aviv, Israel. Formerly known as RetailFX, eToro is the pioneering online broker for social trading.
Their Openbook social trading platform in fact changed the nature of the way beginner online traders can trade the financial markets. It made the markets accessible to everyone, no matter what their level of experience by creating a user-friendly environment and allowing traders to copy the trades of other traders’ strategies automatically.
What is Ethereum?
- Ethereum Trading Explained
- How to Buy and Sell Ethereum Online
- Where to Buy and Sell Ethereum
- Payment Methods for Ethereum Trading
- Ethereum Trading Sites, Brokers and Software
- Ethereum Trading Advantages
Many people often confuse Ethereum with Ether. Ethereum is the network, and Ether (ETH) is the cryptocurrency. However, we will use the term interchangeably in order to carry beginners along.
Ethereum is a platform on which smart contracts can be designed, stored and transacted on between two or more parties, without intervention by a central agency. These transactions are stored in blockchain (which is a decentralized ledger) and are available for everyone to see, giving it a peer-to-peer status. These transactions require a digital currency to run on, and Ether tokens are the currency that powers this platform.
Ether can be defined as the cryptocurrency of the Ethereum network. Ether and Ethereum were created by Russian programmer Vitalik Buterin in 2013 as an improvement on the Bitcoin technology. Buterin himself has been a Bitcoin programmer and in creating Ethereum, the following improvements were made:
- The ability to add on blocks of transactions was made easier, enabling them to be added more quickly than is the case with Bitcoin. The thinking is that this makes Ethereum more efficient as a cryptocurrency.
- The Ethereum technology also supports the operation of various computer applications in addition to that of Ether. Therefore, other application such as decentralized cloud storage activities could be performed.
- Ethereum was also built to support a number of apps.
- Lately, Ethereum is being used as the network to support Initial Coin Offerings (ICOs), which are mostly crowdfunding efforts by companies who create solutions for all manner of functions within the cryptocurrency space. Ether tokens (and not equity are allocated to those who contribute funds towards the ICOs.
Ether is now the 2nd most valuable cryptocurrency after Bitcoin. It has gained a massive 2,300% in 2017 alone. This massive surge in price has tickled the interests of traders all over the world, and Ether is now available for trading as a cryptocurrency.
Ethereum Trading Explained
Information available from reliable sources such as Etherscan indicates that nearly 5.3 million Ether wallets exist. These wallets hold the Ethereum currency for individuals and entities. This number indicates a 450% increase from the 1.6 million wallets that were available in May.
What does this indicate? Interest in trading Ether has increased substantially. This followed the steady climb of Ether from March 2017 till date. The price rise in Ether has come as a result of the following:
- Renewed spikes in the price of Bitcoin, which fuelled a general interest in cryptocurrencies.
- High profile institutional from large companies such as Intel, JP Morgan and Microsoft. Vladimir Putin’s high profile meeting with Buterik also spurred rumors of institutional backing from the Russian government.
Ether can be obtained either by purchasing it at the exchanges or by “mining” it. Mining, which is a process of solving complex Mathematical problems in order to add a block to the existing blockchain and opening a channel for Ether to be added to the wallet, gets more difficult as more mining is done. Besides, not everyone is a Maths genius. So most people get their Ether from a source considered more accessible to the public: the Ethereum wallet exchanges.
Interest in trading of Ethereum has spurred the growth of another industry; the crypto CFD industry. This is the trading of cryptocurrency contracts as Contracts-for-Difference (CFD) assets. Trading Ether as a CFD is available on selected forex platforms, where Ether (ETH) is listed as a tradable asset in pairings with the US Dollar, Euro and British Pound.
Trading of ETH CFDs has its peculiar advantages over buying of ETH on exchanges. These advantages are listed below:
- Trading ETH on exchanges can only produce profits when the trader sells his ETH holdings at a much higher price than when they were bought. In contrast, trading ETH as a CFD asset allows the trader to profit from rising and falling prices.
- Those who buy ETH on exchanges are prone to be caught out by sudden price movements on either side because they are essentially trading blind. There are no charts to show possible areas where price will hit support or resistance. However, those who trade ETH as CFD assets usually have access to charts and tools that can enable them to pinpoint areas of support and resistance, thus targeting exact entries and exits.
- All transactions on crypto CFDs, including the ETH CFD contract, are executed and settled instantly. This is in contrast to buying ETH on exchanges where there is a time lag as transactions get cross-checked and approved by the peer-to-peer network.
- Platform-traded ETH CFD contracts can be traded using an expert advisor. Better still, these EAs can be plugged into remote computers (forex virtual private servers) for round the clock trading, whether the host computer is on or off.
- Ethereum CFDs are usually leveraged, so you can control large positions with a smaller amount of your own capital. This can be an advantage if used responsibly.
How to Buy and Sell Ethereum Online
Ether is like any other cryptocurrency you will find. They feature largely anonymous trading which is secure against fraudulent activities. When it comes buying and selling Ether, you can do so using the following means:
- Exchange your ETH as payment for goods and services either on the Ethereum network or on a handful of online shops. Some of these shops also accept Ether-based Mastercard and Visa “cards”.
- You can use your Ether tokens to invest in ICOs of companies that will operate in the cryptocurrency space, or companies that provide support services to cryptocurrency networks. Companies such as Intel, AMD and Nvidia, which supply Graphics Processing Units on which cryptocurrency mining is largely dependent, have already seen their share prices rocket upwards in the last one year due to a surge in demand for their graphics cards by cryptocurrency miners.
- You can decide to store your ETH in online wallets. This strategy depends on being able to buy your ETH at a lower price, then holding them until their value appreciates, before selling off at a higher price to another user.
Where to Buy and Sell Ethereum
Where can Ethereum be bought and sold? As mentioned earlier, you can buy and sell Ethereum on exchanges as well as trading platforms (CFD contracts on ETH).
In order to buy or sell Ethereum on cryptocurrency exchanges, one needs to have a wallet with a unique wallet address. Think of these two items as a bank and a bank account number. You can get your wallet and unique wallet address from the particular exchange you want to use, or you can download a unique wallet from any of the app stores, and link this wallet to the exchange where you want to trade on.
On these exchanges, Ether can be traded using fiat currency or use digital currency. Using fiat currency means you use everyday legal tender such US Dollars, Euros or your local currency to purchase Ether from verified sellers. You can also use digital payment methods such as Skrill, Neteller, WebMoney, etc. You can equally purchase ETH with Bitcoin, and resell ETH for BTC.
Exchanges usually have a list of verified sellers who will post how much they are selling Ether for the various fiat and digital currencies. This allows the buyer to choose from a list of prices and to select the price that will be favorable for the transaction.
Ether contracts can be traded as CFDs on several trading platforms. These platforms basically list the various contracts that feature Ether as a paired asset.
If you are using a trading platform which supports the programming and use ofEAs, then, by all means, you can use your EA to trade any of the Ether pairs. It is important to note that majority of these platforms are owned by market makers. So traders should observe the rules of using market maker platforms, one of which is that not many of them allow EAs or scalping techniques.
Payment Methods for Ethereum Trading
To be able to trade Ether CFD assets, you need to open a trading account with a broker that supports this activity, after which the trader is expected to fund the account using acceptable payment methods. You can buy Ethereum using the following payment methods:
- Credit/debit cards
- Bank wires (SWIFT and SEPA)
Ethereum Trading Sites, Brokers, and Software
An Ethereum trading exchange is a marketplace where Ethereum can be bought or sold in exchange for fiat currency, other digital currencies or other cryptocurrencies. The strategy is to purchase at lower prices, hold for appreciation of price and resell for a profit. The trader can decide to reinvest the initial investment and profit into further trading cycles or may pull the profit and continue investment with the initial sum.
Ethereum Trading Advantages
- Transactions are not leveraged, which allows the trader purchased Ether in quantities they can truly afford and at risk levels, they can manage.
- Transaction costs are lower than in ETH CFD trading.
- Get pricing of Ethereum from several sources. This gives you a choice of what prices will benefit you the most. Some sellers simply want money desperately and can sell to you at cheap prices you will not get on CFD platforms.
A major advantage of using exchanges is that many of them now offer mobile apps that can be downloaded from the iOS Store or from the Google Play store.
In conclusion, we would like to present our preferred list of the best Ethereum trading brokers for 2017. Definitely, there are traders who would prefer to exclusively on exchanges, and others who would like to stick solely to the trading platforms to trade Ether CFDs. However, you can get the best of both worlds, because the insight you get from the technical analysis tools on the CFD platforms can be used for more informed investments on the Ethereum exchanges. So you would have a double advantage when you use both avenues.
For Ethereum CFD trading, we selected brokers with:
- sound regulation. Not regulation in the sense that the assets they offer are regulated, but regulation in terms of having a body look at their trade practices and product offerings to see if they are within the boundaries of the rules.
- Brokers with transparent pricing practices.
- Brokers whose platforms permit the use of the automated trading software.
For Ethereum exchange trading, we selected exchanges that offered the following:
- A system of verification to bounce scammers off their exchanges
- A track record of traders being able to fund and withdraw money from their accounts. This prevents a repeat of the Mt.Gox experience.
- Exchanges that offered a good variety of payment channels so that any trader anywhere in the world would be able to buy or sell Ethereum in their local currencies or at least currencies/digital payment systems that could be purchased with their local currencies.