How to Buy Bitcoin & Crypto with Interactive Brokers

Key Takeaway: Interactive Brokers does not offer direct cryptocurrency purchases within its platform. Clients must use external cryptocurrency exchanges that comply with the Financial Conduct Authority (FCA) regulations to invest in digital assets like Bitcoin and Ethereum. 

One example is eToro, an FCA-registered exchange offering trading in more than 70 cryptocurrencies. It accepts GBP deposits through Faster Payments, bank transfers, and card payments.

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Can I Buy Crypto with Interactive Brokers?

Yes, Interactive Brokers (IBKR) allows clients to trade cryptocurrencies through its partnership with Paxos Trust Company. Eligible users can access Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and Solana. Trading fees range from 0.12% to 0.18% per transaction, with a minimum commission of $1.75 (subject to a maximum of 1% of trade value).

However, investors should remain aware that Paxos Trust Company, which handles crypto transactions for IBKR, is regulated by the New York Department of Financial Services but offers no regulatory protection for digital asset investments in the UK, and is not registered with the Financial Conduct Authority (FCA).

For those who prefer indirect exposure to cryptocurrencies, Interactive Brokers also provides access to alternative investment products, such as crypto-focused ETFs. Alternatively, investors can use dedicated digital asset exchanges that comply with FCA regulations.

How to Buy Bitcoin with Interactive Brokers

Interactive Brokers offers cryptocurrency trading, but its services are somewhat limited compared to specialised crypto platforms. While you can trade select assets through IBKR’s partnership with Paxos Trust, certain restrictions apply, and crypto custody is managed externally through Paxos.

For those seeking a broader range of crypto options and full control of their digital assets, eToro provides a secure alternative. eToro is registered with the Financial Conduct Authority (FCA), offering more than 70 cryptocurrencies, plus thousands of shares and ETFs.

Here’s how you can buy Bitcoin with eToro:

1. Register: Visit eToro’s website and sign up. Complete the secure identity verification process (Know Your Customer or KYC).
2. Deposit Funds: Once your eToro account is active, log in and select "Deposit Funds." Choose your preferred currency, such as GBP, and transfer funds.
3. Find Bitcoin (BTC): After your deposit is confirmed, use the search function and enter "Bitcoin" or the ticker symbol "BTC."
4. Buy Bitcoin: Enter the amount you want to invest, carefully check the trade details, and finalise the transaction. 

Crypto Trading Fees

UK investors seeking more extensive cryptocurrency options than Interactive Brokers often choose dedicated exchanges like eToro. It’s important to clearly understand eToro’s fees before proceeding:

• Trading Fees: eToro charges a straightforward 1% fee on cryptocurrency transactions. This charge is built directly into the price displayed when buying or selling.
• Market Spread: eToro maintains clarity by not applying extra spreads beyond the stated 1% fee, though market conditions might naturally influence price movements slightly between the bid and ask.
• Withdrawal Fees: Transferring GBP funds from eToro to your bank account incurs no hidden withdrawal fees.

With clear and competitive pricing, no hidden withdrawal charges, and an intuitive platform, eToro is a reliable choice for Interactive Brokers users looking to expand their crypto investment opportunities.

Best GBP Deposit Methods for Interactive Brokers

If you're an Interactive Brokers client in the UK aiming to invest directly in cryptocurrencies, you'll need to transfer funds into a digital asset platform. eToro offers several GBP deposit methods:

• Debit Cards: eToro allows quick and secure GBP deposits through UK-issued debit cards. This payment option facilitates swift transactions and conveniently accepts amounts up to around £30,000 per transfer.
• Faster Payments: GBP deposits through Faster Payments usually arrive within minutes, incur no additional fees, and ensure easy integration with your eToro account.
• eToro Money: If you're planning substantial crypto transactions, the eToro Money service comfortably supports larger GBP transfers, accommodating single deposits of approximately £400,000.

When it’s time to cash out your crypto holdings back into GBP, eToro makes the withdrawal process straightforward, typically without extra fees, sending your funds directly into your bank account.

What is Interactive Brokers?

Interactive Brokers (IBKR) is a globally recognised brokerage firm catering to individual and institutional investors. IBKR offers access to over 150 markets across 33 countries, allowing clients to trade various financial instruments, including stocks, options, futures, currencies, bonds, and funds from a single integrated account. 

The firm is distinguished by its advanced trading technology, competitive commission structures, and robust risk management tools, making it a preferred choice for active traders and professionals seeking transparency in their trading activities.

Conclusion

Interactive Brokers provides limited cryptocurrency trading via Paxos, but UK investors often find platforms like eToro more flexible and user-friendly due to their wider crypto offerings, transparent fees, and easier GBP transactions. 

Before investing, clearly evaluate fees, deposit methods, and security features, and always consider your personal risk tolerance, as cryptocurrencies are highly speculative investments.