IBKR becomes the second major brokerage to offer Cryptocurrency trading after Robinhood. The brokerage, which has assets under management of over $200B, is said to partner Paxos Trust Company, a regulated provider of cryptocurrency services that works with PayPal on its digital asset trading.
In a previous announcement, June, Chairman Thomas Peterffy said the firm would launcho cryptocurrencies trading by the end of the summer as the nascent asset class is becoming more mainstream. Through a recent statement reported by Businesswire, the Chief Executive Officer Milan Galik said, “As financial markets evolve, sophisticated individual and institutional investors are increasingly seeking out allocations to digital currencies as a means of achieving their financial objectives.”
What is IBKR Cryptocurrency offering?
One would wonder why there seems to be so much speculation about the IBKR’s Cryptocurrency services. The answer is not far-fetched by merely having a close look at the company history. Interactive Brokers, also known as IBKR in short form, is a multinational brokerage firm that operates the largest electronic trading platform in the U.S. by the number of daily average revenue trades. The company and its affiliates executes specifically at 2,170,000 per day.
By offering a cryptocurrency trading option, the company opens its doors to millions of institutional and professional traders from over 135 market destinations worldwide. IBKR traders who trade a wide variety of electronically traded products, including stocks, options, futures, Forex, fixed income, and funds worldwide can trade Cryptocurrency.
Who trades on IBKR and the opportunities.
IBKR’s Cryptocurrency services, unlike several others, are for classified Investors and brokerage account holders with $10,000. The users vary from various electronically traded products, including Stocks, Futures, E-minis, Options, CFD, Forex, Crypto, etc. It also opens doors to users to trade the listed electronically traded products with USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, and CHF.
What do IBKR’s Cryptocurrency services mean for the Cryptocurrency market?
For a traditional top-ranking brokerage firm to include Cryptocurrency services in its offering is enormous. Furthermore, IBKR fees and asset classes made the offering more exciting.
According to the company, “U.S. clients of the brokerage will now trade and custody bitcoin BTC=BTSP, ethereum ETH=BTSP, litecoin, and bitcoin cash alongside stocks, options, futures, bonds, mutual funds, and exchange-traded funds for as long as 0.12% to 0.18% of trade value.” However, its offering depends on monthly volume, with no added spreads, markups, or custody fees.
The IBKR’s Cryptocurrency services will impact BTC, ETH, LTC, and BCH. It is also good news to other Bitcoin, Ethereum standard Cryptocurrencies, and tokens with potentials. For instance, IBKR news means so much excitement to LEDU users who are getting so much confidence in holding Cryptocurrencies like LEDU coin for their unique use cases.
By the above trading arrangements, the firm is set to rival prominent Cryptocurrency service providers like Coinbase.
IBKR Vs. Coinbase
The entrance of IBKR into the Crypto market left the community with more crypto options. Also, it is set to contend with Coinbase, an already established Cryptocurrency service provider. It is now at the privy of investors to consider the two among others before making their choices.
No investor would deliberately throw away money, so it becomes necessary to do due diligence in choosing a Cryptocurrency trading platform. It is best to consider reputation, regulatory issues, trading, withdrawal fees, funding methods, currency, and assets, among other considerations before funding accounts at any brokerage. Meanwhile, it is noteworthy that IBKR and Coinbase already have good reputations and regulatory records. Both have spent over 43 years and 32 years, respectively, offering financial services.
After going through these articles, investors would be able to decide between IBKR and Coinbase considering the following services and offerings:
- The company offers Forex (Currency), Majors, Indices, Penny stocks, Dow Jones, FTSE, Bitcoin, ETH, BCH, LTC, metals, energies, and several other financial market instruments.
- It allows investors to operate a minimum deposit of $10,000, using various currency types like USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, and CHF.
- Investors can fund demo, VIP, and standard accounts with Apple Pay, Cheque, Credit Card, Google Pay, JCB Card, Mastercard, Samsung Pay, and Crypto transfer.
- IBKR users can trade funds for as low as 0.12% to 0.18% of their trading value.
- No spread, markups, or custody fees.
- USD 1.75 minimum per order.
- Unlike IBKR, Coinbase allows both smaller and larger investors to trade Crypto.
- It offers only Crypto for as low as 0$ minimum deposit.
- Users can fund through Silvergate Bank Transfer and Western Union.
- Coinbase doesn’t operate a demo account.
- It charges a spread markup of about 0.5 percent with a varying transaction fee depending on the size of the transaction and the funding source.
- The average transaction fee is at 1.99 percent of the transaction value.
What does IBKR’S crypto service mean for Coinbase?
According to Brokerage Reviews, Coinbase and IBKR have $223 billion, 50 million accounts, and $232 billion, 981,000 accounts funded, respectively. The deal should be if IBKR without Cryptocurrency offering should have a higher user base and AUM than Coinbase, its crypto offering will rival Coinbase.
Also, the trading fees, margin rates will further help IBKR earn more users despite its $10,000 deposit restrictions.