Cryptocurrency Trading with Online Brokers: What You Must Know

The peak daily crypto trading volume is $500 billion – the number reached in May 2021. Many new developments have made cryptocurrency trading possible without centralized or decentralized exchanges. Today, online brokers that feature shares, indices, commodities, etc., now support the buying and selling of cryptos.

There is a caveat: online brokers have a different approach than you would get on a typical cryptocurrency exchange. We will address how you can trade them and explore all you need to know about using digital brokers. Then, you can skip centralized and decentralized exchanges to trade your coins like you would indices, shares, etc.

Buying and Selling the “Physical” Cryptocurrencies

Online brokers may only support a few coins, but some allow direct purchases. They are ideal if you need tokens to play games like online poker in Australia or make e-commerce purchases. You don’t have to worry about getting a crypto wallet and converting your cash.

eToro is a popular broker that supports buying and selling physical coins. Its eToro Money platform provides storage for them. Still, you can store your regular money in it, which you can’t do with a crypto wallet.

This strategy brings several advantages to trading. You can buy and hold tokens for a long time without being limited by short price swings. Also, the wallet can work with decentralized platforms if you want to go into blockchain.  

Online Brokers that Support Cryptocurrency Trading

The online trading market’s worth stood at $10.27 billion in 2022, but it has a 6.7% compound annual growth rate. Forex, indices, commodities, stocks, treasuries, bonds, etc., are the primary financial instruments. Nonetheless, some support cryptocurrency trading in a capacity other than an exchange.

How would you trade coins that you do not own? You can buy and store the coins with centralized or decentralized crypto exchanges. On the other hand, you will get something different with many online brokers.

The first thing to do is to check the available instruments on the online broker. Those that support cryptocurrency trading will list the available coins among their instruments. However, don’t expect them to feature as many coins as the exchanges do.

Here is how to trade cryptocurrencies with them.

➥ Contracts for Differences

Most online brokers do not support the buying and selling “physical” cryptocurrencies. So, you cannot send or receive the coins in a crypto wallet. However, they allow traders to speculate on the price movements by creating a contract for difference (CFD).

Cryptocurrency price movement can go only two ways: up or down. A coin’s value could increase or decrease in the market. Speculating on this movement is how you trade with online brokers.

There are two ways to enter a contract for difference with an online broker, as follows:

  • Open a long position or buy if you think the coin’s value will increase
  • Open a short trade or sell if you think the coin’s value will decrease

Online brokers support cryptocurrencies as leveraged products. That means you don’t need much money (margin) to open a trade or gain exposure to the market. Still, any profit or loss that follows is calculated in full size of your trading position.

➥ Cryptocurrency Exchange Traded Funds

A crypto exchange-traded fund tracks the price of one or more coins. It can be any of the following types:

  • Those backed by physical coins
  • Those that track crypto exchange-traded products or futures contracts

In the first case, the firm providing the fund owns the coins and presents them as shares. That spares you the hassle of owning them yourself. The second option tracks a cryptocurrency’s price on major trading exchanges.

ProShares launched the first cryptocurrency ETF, ProShares Bitcoin Strategy (BITO), in 2021. It mimics the price swings of derivatives instead of the actual cryptocurrency. AvaTrade, IG, CMC Markets, and eToro are brokers that support cryptocurrency ETFs.

Steps to Trade Cryptocurrencies with Online Brokers

Once you have decided which method to use, follow the steps below to trade:

  • Open an account with the broker that supports the crypto instrument.
  • Fund your account with a tradeable amount.
  • Open a trading position on the crypto instrument you want.
  • For brokers like eToro, you can outright buy the coins.
  • Track the market movement and close your trade accordingly for profit.

Pros of Using Online Brokers for Cryptocurrency Trading

  • You can add it to your portfolio and spread your investment on one platform.
  • There is no compulsory ownership of physical cryptocurrencies.
  • You can reduce your losses with stop-loss tools.
  • Online brokers support automated trading like MetaTrader 4.


Cryptocurrency trading is not limited to centralized and decentralized exchanges. Online brokers support it, but in different capacities. So, you can trade the physical coins or get them as CFDs and ETFs.

Decide how you trade and pick the online broker that supports it. Then, you can open or close trading positions on the token.

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