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Cryptocurrencies have become far more accessible for the average American with a rise in popularity the last few years. Several brokerage firms now allow investors to buy and sell cryptocurrencies right alongside their stocks, mutual funds, and other investments. And some top cryptocurrency exchanges have made the process more user friendly than ever.
While the number of cryptocurrency investing platforms are on the rise, investing in cryptocurrencies may not be right for everyone. We're not saying it's a good idea or a bad idea to trade in and out of cryptocurrencies. The fact is that cryptocurrencies are still a rather speculative asset class. Whichever direction they ultimately go, you can count on a roller coaster ride.
Having said that, there's nothing wrong with holding some digital currency as a long-term investment. Especially if you believe in the long-term potential of cryptocurrencies as either a means of payment or a store of value. And you have a relatively high risk tolerance.
With that in mind, here are some of the best cryptocurrency exchanges for April 2021. These include brokers, exchanges, and apps you can use to start building your own cryptocurrency portfolio today.
The Ascent's best cryptocurrency exchanges and apps:
- Cryptocurrency selection: Gemini Exchange
- Finding new cryptocurrency investing strategies: eToro
- Diversified investing needs: Robinhood
- Membership ecosystem: SoFi Active Investing
- Investing and peer-to-peer payment: Cash App Investing
- Trading platform: Coinbase
Rating image, 4.5 out of 5 stars.
4.5 stars
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
Offers several dozen cryptocurrencies and delivers a professional-level trading experience. Gemini Pay allows customers to use QR code technology to spend their digital money in more than 30,000 retail stores. The new Gemini Earn pays interest on idle cryptocurrencies at high rates.
Read Full ReviewFees:
$0.99-$2.99 for orders under $200, 1.49% for orders greater than $200
Account Minimum:
$0
Open Account
On Gemini Exchange's Secure Website.
Rating image, 4.5 out of 5 stars.
4.5 stars
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
eToro is one of the best cryptocurrency exchanges and has 15 cryptocurrencies on its platform. It offers some unique features, such as the ability to follow and match the investments of other cryptocurrency traders.
Fees:
0.75%-5% of the bid/ask spread, varies by cryptocurrency
Account Minimum:
$50
Open Account
On eToro's Secure Website.
Rating image, 4.5 out of 5 stars.
4.5 stars
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
The best place to buy cryptocurrencies and traditional investments like stocks and options. It has 17 different cryptocurrencies and gives immediate access to deposits. Plus, cryptocurrency trading on Robinhood is 100% commission free.
Read Full ReviewFees:
$0 for stocks, ETFs, options, and cryptocurrencies
Account Minimum:
$0
Special Offer
Get a free stock with a new account
Open Account
On Robinhood's Secure Website.
Rating image, 4.0 out of 5 stars.
4.0 stars
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
SoFi Active Investing has a well-rounded financial ecosystem. SoFi Members can buy and sell five different cryptocurrencies. They can take out loans, save, and trade stocks. SoFi does charge a markup, but the all-in-one convenience of the platform could still make it worth a look.
Read Full ReviewFees:
$0 for stocks, 1.25% for cryptocurrencies
Account Minimum:
$1
Open Account
On SoFi Active Investing's Secure Website.
Rating image, 4.0 out of 5 stars.
4.0 stars
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
Square's Cash App only offers bitcoin. But it could be a smart choice for people who only want to buy, sell, and hold the leading cryptocurrency. Plus, the popular finance app has some other great features, such as stock trading and person-to-person payments.
Fees:
$0 for stocks, fees vary for cryptocurrencies
Account Minimum:
$0
Rating image, 4.5 out of 5 stars.
4.5 stars
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
Coinbase shines with its vast array of cryptocurrencies available -- customers can buy and sell over 40 of them. There's also an advanced trading platform for serious cryptocurrency enthusiasts. Plus, you can earn some free cryptocurrencies if you're willing to take some educational courses.
Fees:
0.5%-4.5%
Account Minimum:
$2
Where can you buy cryptocurrency?
If you're wondering where to buy cryptocurrency, you have several options. The best places to buy cryptocurrency can generally be separated into two main baskets:
- Brokerages. A brokerage is a company that facilitates the purchase and sale of investments, such as stocks, bonds, and mutual funds. Several of the best stock brokers now offer cryptocurrency trading through their platforms. These can be desktop-based, app-based, or both.
- Exchanges. A cryptocurrency exchange facilitates the buying and selling of digital currencies. The biggest difference is that brokerages offer other investment vehicles. Cryptocurrency exchanges don't.
Whether you go with a broker or an exchange, make sure it has the functionality you need. For example, if you want to buy cryptocurrency on your mobile, look for the best cryptocurrency app.
It's also possible to buy cryptocurrencies directly from other people. This used to be far more popular in the early days of bitcoin. However, that can get a little complicated and is beyond the scope of this discussion.
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What is a cryptocurrency exchange?
A cryptocurrency exchange is a company that facilitates cryptocurrency transactions. Cryptocurrency exchange customers can buy and sell various digital currencies. They may also be able to do the following through the exchange's platform (not an exhaustive list):
- Exchange one type of cryptocurrency for another at prevailing exchange rates.
- Exchange cryptocurrency for fiat currency (like U.S. dollars), or for cryptocurrencies tied to fiat currencies.
- Spend cryptocurrencies, for example, using a linked debit card.
- Access educational resources to learn about digital currencies.
Cryptocurrency exchanges vs. brokers
By definition, a broker is an intermediary between two parties. It typically involves a financial transaction. For example, a real estate broker facilitates transactions between buyers and sellers of real estate.
So, technically speaking, cryptocurrency exchanges can be considered brokers. However, as we discussed above, there are two different types of intermediaries that facilitate the buying and selling of cryptocurrencies. Cryptocurrency exchanges, which allow users to buy and sell cryptocurrencies only. And brokerages that offer cryptocurrency trading alongside other investments like stocks and bonds.
They are all technically brokers. But there are two distinct types of businesses you can use to buy and sell cryptocurrencies.
Are cryptocurrencies safe?
There are two components to cryptocurrency safety -- security and investment volatility.
Let's first look at the security of your cryptocurrency investments. The cryptocurrency you hold in your account in a broker or exchange is typically very secure. That's as long as you use a reputable exchange or broker (like all of those mentioned here). Indeed, one of the selling points of bitcoin's blockchain is its security.
Most leading cryptocurrency exchanges keep the bulk of their digital assets in "cold storage." This means they are stored offline and aren't at risk of being hacked or stolen. In the earlier days of cryptocurrencies, there was a risk of exchanges being hacked, but these issues have largely been dealt with.
Alternatively, you can opt to keep your cryptocurrencies in a separate digital wallet of your own. You could even use one to create your own offline storage. However, the security and functionality of the major exchanges should be enough for most investors.
Now let's consider safety from an investment perspective. It's important to point out that cryptocurrencies -- even bitcoin, the largest and most-established one -- are a young asset class and are rather volatile. This is especially true for the smaller cryptocurrencies in the market. So, you need to be ready to withstand major price swings over time. And, just as with other investments, don't invest money you can't afford to lose.
| Broker/Advisor | Best For | Commissions | Next Steps | |
|---|---|---|---|---|
Gemini Exchange
Rating image, 4.5 out of 5 stars.
|
Rating image, 4.5 out of 5 stars.
|
Best For:
Cryptocurrency selection |
Commission:
$0.99-$2.99 for orders under $200, 1.49% for orders greater than $200 |
|
eToro
Rating image, 4.5 out of 5 stars.
|
Rating image, 4.5 out of 5 stars.
|
Best For:
Finding new cryptocurrency investing strategies |
Commission:
0.75%-5% of the bid/ask spread, varies by cryptocurrency |
|
Robinhood
Rating image, 4.5 out of 5 stars.
|
Rating image, 4.5 out of 5 stars.
|
Best For:
Diversified investing needs |
Commission:
$0 for stocks, ETFs, options, and cryptocurrencies |
|
SoFi Active Investing
Rating image, 4.0 out of 5 stars.
|
Rating image, 4.0 out of 5 stars.
|
Best For:
Membership ecosystem |
Commission:
$0 for stocks, 1.25% for cryptocurrencies |
|
Cash App Investing
Rating image, 4.0 out of 5 stars.
|
Rating image, 4.0 out of 5 stars.
|
Best For:
Investing and peer-to-peer payment |
Commission:
$0 for stocks, fees vary for cryptocurrencies |
|
Coinbase
Rating image, 4.5 out of 5 stars.
|
Rating image, 4.5 out of 5 stars.
|
Best For:
Trading platform |
Commission:
0.5%-4.5% |
FAQs
-
The cost to buy and sell cryptocurrencies depends on the platform. Some charge a percentage of each transaction as a "markup." Others simply make their money on the spreads between a bid and ask price. Either way, the cost of trading is one of the main points to compare between the different brokers and exchanges.
-
A cryptocurrency exchange facilitates the purchase and sale of cryptocurrencies only. A broker is a type of investment platform. It might allow users to buy and sell cryptocurrencies as well as stocks, mutual funds, and other types of investments.
-
It depends. There are more than 4,000 (not a typo) different cryptocurrencies in existence, and some are far more legit than others. Most investors should stick to bitcoin and other large, established digital currencies. Avoid the newer and smaller varieties.
About the Author
Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for The Ascent and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column ("Ask a Fool") that is syndicated in USA Today, and his work has been regularly featured on CNBC, Fox Business, MSN Money, and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.
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