Interactive Brokers Cryptocurrency Trading Expert Review

Is Interactive Brokers Good For Crypto Trading?

Interactive Brokers has partnered with the Paxos Trust Company, a New York-based regulated trust company and custodian with expertise in digital assets, securities and payments, to provide cryptocurrency brokerage.

Interactive Brokers’ UK clients will have a unified view of their IBKR securities brokerage account and their crypto account at PaxosTrust Company. This means clients will be able to manage their cash, trade cryptocurrencies, and invest in other asset classes, all from a single trading screen.

Gerald Perez, Chief Executive Officer at Interactive Brokers (U.K.) Limited said of the new service:

“Interactive Brokers offers a wide selection of global investment products, sophisticated technology and competitive pricing,”

He added

“Introducing cryptocurrency trading gives UK clients enhanced flexibility to invest across markets and asset classes while also adding exposure to digital assets.”

Basic Crypto & Crypto Plus

There are two types of crypto account for UK traders on Interactive Brokers

Basic Crypto lets you trade and hold Bitcoin, Bitcoin Cash, Ethereum, and Litecoin through the IBKR platform.

There are no additional or separate funding transactions are required and IBKR handles all required cashiering for you automatically, and unvested cash is always kept in your IBKR brokerage account.

Crypto Plus lets you fund your crypto account, trade using non-marketable limit orders, and enjoy 24/7 trading.

You will be able to hold USD in addition to cryptocurrencies in a dedicated Paxos account with access to 24/7 trading and place non-marketable buy limit orders.

With Crypto Plus, all trading of crypto will require prefunding of your dedicated Paxos account and you will be responsible for managing all fund movement between your IBKR brokerage account and your Paxos crypto account. You can also trade crypto immediately when you transfer funds to your dedicated Paxos account during normal US banking hours.

I opted for Basic Crypto so my cash would stay with IBKR rather than a third party, as I prefer to know who I’m dealing with. To enable crypto investing permissions on IBKR you have to complete a fairly basic questionnaire to prove that you understand the risks involved, which only takes a few minutes. You also have to prove that you are a sophisticated or professional investor. And then, just to be double careful, you’re not getting a severe case of FOMO, you have to wait 24 hours before you are able to buy cryptocurrencies on Interactive Broker (this is a regulatory requirement introduced by the FCA in 2023).

Low-cost crypto investing

Overall, Interactive Brokers continues to be one of the cheapest places to trade anything. You can see in the below cost comparison below Coinbase and eToro execution costs are very low.

	IBKR	Gemini ActiveTrader	Coinbase Pro	eToro
Crypto Transaction Fee	0.18%	0.40%	0.60%	1.00%
Spread / Markup	None	None	None	None
Total fee	0.18%	0.40%	0.60%	1.00%
Cost of $1,000 trade	$1.80	$4.00	$6.00	$10.00

There are several benefits to trading crypto on IBKR:

Consolidated platform: Clients can access a wide range of global investment products, including cryptocurrencies, on a single sophisticated trading platform, eliminating the need for multiple platforms.

Competitive pricing: Cryptocurrency commissions are low at 0.12% – 0.18% of trade value, depending on monthly volume, with a minimum of $1.75 per order. There are no added spreads, markups, or custody fees.

Currency conversion: Clients can convert GBP or other currencies to USD (the denomination for cryptocurrencies on the platform) at tight spreads as low as 1/10 of a PIP.

Efficient portfolio management: Financial advisers can easily allocate a percentage of client assets to cryptocurrencies and manage their clients’ portfolios more efficiently.

However, it’s important to note that cryptocurrency is still a very high-risk investment and even tough the costs of trading are lower, there is a high possibility that crypto could become worthless.

Interactive Brokers (U.K.) Limited is registered with the Financial Conduct Authority as a crypto assets firm under the relevant regulations.
However, it’s important to note that cryptocurrencies are unregulated in the UK, and are therefore not covered by the Financial Services Compensation Scheme (FSCS).