Summary: Interactive Brokers provides a platform for cryptocurrency trading through their partnership with Paxos Trust Company, enabling users to trade and hold 4 digital assets, including Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. With a low fee structure, trading on IBKR can be more cost-efficient than indirect exposure through crypto-related equities.

For those seeking a better alternative, Kraken stands as a top choice. Founded in 2011, this US-based and globally available broker grants access to over 200 cryptocurrencies, offers lower fees (0.16% per trade), and enables advanced features like crypto staking. The platform enables deposits in over 20 currencies, including USD, CAD, GBP, EUR and more.

Best Crypto Alternative to Interactive Brokers
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Kraken is a globally licensed exchange that maintains registrations with FinCEN, the FCA, FINTRAC (Canada), ASIC and other top financial markets regulators.
Table of Contents

Can I Buy Bitcoin with Interactive Brokers? 

Yes, Interactive Brokers lets clients transact four cryptocurrencies, including BTC, BCH, ETH, and LTC. But keep in mind, while they do offer this service, their 0.2% transaction fee and limited crypto selection might not be as competitive as other dedicated, regulated crypto platforms globally. If you're thinking of diving into the crypto world, you should join a platform that offers a wider array of digital currencies and offers better fee structures. Always ensure whatever platform you choose aligns with regulatory standards for security and peace of mind.

How to Buy Crypto with an Interactive Brokers Alternative

If you're an Interactive Brokers client keen on diversifying into digital currencies, we suggest a reputable, licensed platform like Kraken. Kraken, overseen by major financial regulatory bodies and with a global presence, facilitates immediate and free multi-currency deposits. The platform supports trading, buying, and staking over 200 cryptocurrencies at attractive rates starting at 0.16% per trade. Funding your account is straightforward, with multiple options, such as bank transfer, SEPA, Interac e-Transfer and more.

Here's a concise guide to aid your journey:

  1. Account Setup: Create an account on Kraken and complete the verification steps.
  2. Currency Selection: Select your desired deposit currency on Kraken (e.g. USD, GBP, CAD, EUR and others).
  3. Deposit Funds: Choose your preferred payment method (bank transfer, ACH, SEPA, Interac e-Transfer or card payment) and initiate your deposit.
  4. Crypto Purchase: Lastly, pinpoint the cryptocurrency you wish to delve into and finalize your transaction.
Deposit and trade 200+ assets with Kraken.
Deposit and trade 200+ assets with Kraken.

What are the Fees?

IBKR Crypto offers a competitive fee structure for cryptocurrency trading. The commissions range from 0.18% to 0.2% of the trade value, which is significantly lower compared to several other platforms. For a trade value of $1,000 in crypto, the transaction fee with IBKR/Paxos would be 0.18%, amounting to just $1.80. 

This starkly contrasts to other platforms such as Gemini and Coinbase Pro, which charge 0.40% ($4.00) and 0.60% ($6.00), respectively for the same trade value. Furthermore, with IBKR Crypto, there are no added spreads, markups, or custody fees. Notably, the minimum fee per order is USD 1.75, which is capped at a maximum of 1% of the trade value, ensuring cost efficiency for traders.

What is IBKR Crypto?

IBKR Crypto is Interactive Brokers' advanced offering that enables users to trade cryptocurrencies at competitive rates. With commissions as low as 0.2% of trade value, users can trade and hold primary digital assets like Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. Furthermore, the platform extends the ability to hold USD in the cryptocurrency account, trade additional tokens provided by Paxos Trust Company, and engage in cryptocurrency trading around the clock. 

All trading and custody regarding these digital assets are overseen by Paxos Trust Company, ensuring a secure and reliable trading environment. Additionally, Interactive Brokers' platform provides a unified trading experience, allowing clients to invest in crypto alongside other assets like stocks, options, ETFs, and more.

IBKR Crypto
IBKR Crypto.

Crypto Basic vs Crypto Plus on IBKR

Crypto Basic and Crypto Plus are specific trading permissions on Interactive Brokers for cryptocurrency dealings. The standout feature of Crypto Plus is its access to the Paxos web app for trading, available across IBKR platforms like TWS and IBKR Mobile. This advanced permission offers 24/7 crypto trading, the ability to hold USD in a Paxos account, and support for non-marketable buy limit orders. However, with Crypto Plus, users must pre-fund their Paxos account before making crypto purchases, and all related services are provided by Paxos Trust which could increase counterparty risk.

Final Thoughts

Interactive Brokers offers its users the opportunity to dive into the crypto market through their IBKR Crypto service, which boasts competitive rates as low as 0.2% of the trade value. While this might appeal to existing IB clients, those seeking a broader spectrum of cryptocurrencies and perhaps more attractive fees might want to explore other regulated platforms, like Kraken. It's essential for prospective crypto investors to research and select platforms based on fee structures, available assets, and regulatory oversight, ensuring both value and security in their digital asset ventures.