Ethereum brokers have offered significant investment opportunities since the crypto launched in 2015. Ether (ETH) is the second-largest digital currency by market cap and is popular with active retail traders. In this review, we list the best Ethereum brokers in 2023 and provide a guide to choosing between top exchanges.
What Is Ethereum?
Ether is a cryptocurrency launched by blockchain enthusiasts. It was designed to be used within the Ethereum network, however, it’s now accepted as a transaction method at an increasing number of online and physical merchants. Digital money can be transferred across the globe with transactions stored on a decentralized record, known as a blockchain.
A blockchain is a distributed electronic ledger that keeps track of all transactions. So ledgers are essentially the foundations of cryptocurrency transfers.
Value exchange is the main use of the Ethereum blockchain, via the network’s token, Ether (ETH). The long-term vision is to provide users with more control over their capital, replacing intermediaries with smart contracts that automatically execute transactions.
How To Compare Ethereum Brokers
The number of Ethereum brokers continues to rise following significant global interest in the digital currency phenomenon.
Online exchanges provide financial services for users who want to start buying, selling or trading Ethereum.
There are several important factors to consider when choosing between Ethereum brokers:
A spot trade happens when buyers and sellers come together to exchange a token with instant settlement. Ethereum brokers act as intermediaries for buyers and sellers to bid or offer a quick way to buy the token at a fixed price.
Spot transactions via Ethereum brokerages are an easy method for beginners starting their investment journey and tend to be more user-friendly than an exchange. However, brokerage services can yield slightly higher fees.
Leverage allows users to amplify the results of a position. eToro offers 1:2 leverage on Ether, however, rates may vary depending on local regulations and current market volatility.
Using leverage can amplify your gains, but it can also amplify your losses. Traders should always utilize risk management approaches, such as stop loss and take profit orders.
Some providers even offer the possibility of buying pre-leveraged tokens like ETH3L (long) or ETH3S (short) which amplify the price movement by three times.
Interactive Brokers is one of the top Ethereum brokers offering futures products. Futures contracts are a good option for those looking to speculate on the longer-term price of the crypto without owning the token itself.
To trade ETH futures, you will need to set up an account with a registered futures broker, instruct how many contracts you would like to buy or sell, and select an expiry.
Futures also come with the possibility for leverage, and depending on regulation, this can be as high as 1:500.For example, KuCoin offers rates up to 1:100.
Fees can fluctuate significantly between providers.Brokers tend to work on a percentage charge model, for example, 0.2% of the trade value.We recommend Ethereum brokers that charge a flat rate so that you’re not penalized for smaller purchases.
Also consider other fees such as account maintenance, inactivity charges, plus deposits and withdrawals.
The legal status of Ethereum varies around the world.Digital currency trades are viewed differently from traditional investments at most regulatory agencies.Other than anti-money laundering rules, many authorities do not have specific laws that regulate digital assets, posing risks to consumers.
The FCA, which governs the UK’s financial services, states that crypto traders are unlikely to be covered by the Financial Services Compensation Scheme or the Financial Ombudsman Service.This is different for cryptocurrency derivatives, where the rules are often more clear-cut.The FCA has banned derivatives on Ether and other digital currencies for UK traders.
We always recommend opening an account with Ethereum brokers that are regulated in your local jurisdiction.
The CySEC, FCA and ASIC are some of the top agencies that regulate online exchanges and investing platforms.
Selecting Ethereum brokers with powerful but user-friendly platforms is important. Whether that be the industry-established MetaTrader 4 (MT4) or bespoke proprietary terminals, traders of all experience levels should be able to find a system that meets their needs.
Integrated price analysis tools and interactive charts and graphs will support your transaction decisions, so look for a platform that offers intuitive services. You can also utilize demo accounts to get a feel for features before opening a live account and depositing capital.
Mobile apps are becoming the norm at many Ethereum brokers. With crypto available 24/7, 365 days a year, easy-to-use apps create the access point needed from a mobile or tablet device.
Keep track of those vital and sometimes sudden price movements with alert notifications and manage transactions while on the move.
The best Ethereum brokers provide additional features, such as access to information on strategies or other educational resources. These can be particularly useful if you are new to crypto investing.
An increasing number of Ethereum brokers also offer bots (known as Expert Advisors).
These automated programmes can save you time and energy by completing calculations and executing orders on your behalf. Of course, exercise caution when allowing anything to trade on your behalf. While some Ether bots can be effective, others are low-quality and could lead to losses.
The type of investing account you select is important. Ethereum brokers tend to offer various options, but the cheapest account may not always provide the best profit potential. Look for competitive spreads and commissions, low fees for deposits and withdrawals, plus customizable tools to suit your strategy and volume.
Brokers that offer Ethereum sometimes run financial incentives and rewards. This can include no deposit bonuses or loyalty schemes based on investment volumes. We recommend finding a good broker before considering their incentives – never pick one purely because of the welcome bonus. And always check the terms and conditions to understand the potential limits of the offer and whether this applies to Ethereum.
The top Ethereum brokers offer good quality customer support. As the digital currency market is open 24/7, we would recommend a platform with contact times that stretch into the evenings or weekends, especially if you plan to open and close positions then. Customer support channels at the best Ethereum brokers include multilingual chatbots, email, social media, or telephone assistance.
Deposits & Withdrawals
Look out for Ethereum brokers that accept quick and easy online deposits and withdrawals.
Exchanges may take additional fees on top of third-party charges to deposit, so check these before funding your account.
Some brokerages also facilitate Ethereum deposits directly. Brokers that accept Ethereum payments make it easier to finance, trade and manage Ether investment portfolios.
Fiat currencies, such as USD and EUR, are also widely supported on investing platforms. However, note that currency conversion fees may be incurred for transferring ETH to and from other fiat and cryptocurrencies.
Minimum deposit requirements vary between Ethereum brokers. FP Markets, for example, requires a $100 initial deposit. For inexperienced or new traders, in particular, opting for a platform with zero or no deposit requirement could be a sensible option.
Gas charges refer to the costs required to execute a transaction on the ETH blockchain. Complicated transactions involving smart contracts, for example, require a higher gas limit vs a simple transaction. Gas prices are usually quoted in GWEI, a denomination of Ether. These are usually integrated into an Ethereum broker’s fees, however, you may have less flexibility to select a gas fee based on your desired processing time.
Gas fees are also affected by the price of Ethereum. Because one GWEI is equivalent to 0.000000001 ETH, when the cryptocurrency is on a bull run the gas fees also increase.
For instance, the average daily gas fee for Ethereum from January 2021 to May 2022 was approximately $40, but in August 2022, it dropped to $1.60.
It’s worth noting that these fees do not go to the broker, but rather to the miners and network security personnel as a reward for their efforts.
The Final Word on Comparing Ethereum Brokers
Ethereum brokers offer user-friendly investment opportunities for aspiring crypto traders. Consider the key features mentioned above to find a platform that meets your needs. Alternatively, check out our list of the best Ethereum brokers to start today.
Lastly, be aware of local regulations and check the status of Ether investing in your area.
What Are Ethereum Brokers?
Ethereum brokers are online platforms that facilitate the buying, selling, and exchanging of Ether (ETH). This could take the form of spot and leveraged investing, futures, CFDs, or other derivatives.
Why Use Ether Brokers?
ETH brokers often provide a straightforward investing platform. Clients benefit from a variety of services provided by Ethereum brokers, including customer support, a range of deposit methods, established analysis tools, and various educational resources.
What Are the Best Ethereum Brokers?
To find the top Ether brokers, consider factors such as fees, spreads, available tools, and product types (such as spot and derivatives). We also recommend choosing a regulated provider to ensure additional protections for retail traders.
Can I Trade Ethereum Futures?
What Is the Difference Between an Ethereum Broker and an Exchange?
An exchange is an online platform that allows users to buy and sell Ethereum with each other.