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AdvisorHub Content Studio
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Interactive Brokers’ clients benefit from the ability to trade Bitcoin, Ethereum, Litecoin and Bitcoin Cash plus stocks, options, futures, bonds, mutual funds and ETFs from a single screen.
“How can I invest in cryptocurrencies like Bitcoin?”
If you’re an independent financial advisor, it’s a question you’ve likely heard with increasing frequency from your clients over the last year or two.
And if you’re like many advisors, it’s a question you’re still trying to answer for yourself and your practice.
Once derided by many traditional investment professionals as a fad that wasn’t worth the risk, crypto can no longer be ignored. While cryptocurrencies can be volatile, the prices of many crypto assets have trended upward in recent years amid increasing acceptance from mainstream investors. Many leading investment professionals, including legends like Paul Tudor Jones and Bill Miller, contend that a diversified portfolio isn’t complete without some exposure to Bitcoin and other leading cryptocurrencies.
Not surprisingly, many investment trading platforms are seeking to help individual investors purchase crypto. But few are catering to the special needs of independent advisors who may want to buy and sell crypto for hundreds of clients.
On September 13, Interactive Brokers introduced cryptocurrency trading through Paxos enabling clients to trade and custody Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH) via Paxos Trust Company. Through Paxos, IBKR clients can trade cryptocurrency alongside other asset classes available on the Interactive Brokers platform creating a unified customer experience.
While initially available to clients that are U.S. residents with individual or joint accounts, Interactive Brokers – the largest electronic trading platform in the U.S. – now plans to launch cryptocurrency trading to financial advisors as well.
In keeping with Interactive Brokers tradition, the costs for trading crypto will likely be the lowest you will find in the brokerage industry. The company after all is a pioneer in using cutting-edge technology to lower the costs of trading in securities.
Thomas Peterffy, Interactive Broker’s visionary founder, fabricated the first mobile trading computer which he brought to the floor of the American Stock Exchange in 1983. And Interactive Brokers was the first among major online brokers to offer zero commissions for certain accounts.
So how are crypto trading commissions on the Interactive Broker’s platform?
While other crypto exchanges and brokers charge fees of 2.00% of trade value or more and add spreads or markups to the price, cryptocurrency trading with Paxos on Interactive Brokers’ platform has low commissions of just 0.12% – 0.18% of trade value, depending on monthly volume, with a USD 1.75 minimum per order. Plus, there are no added spreads, markups, or custody fees.
“What we are seeking to offer advisors is the ability to trade crypto alongside stocks, options, futures, bonds, mutual funds and ETFs from a single screen in a low-cost way, says Steven Sanders, Executive Vice President of Marketing and Product Development at Interactive Brokers. “Our RIA platform is a turn-key solution that gives advisors access to low trading costs, leading technology and tools to help them manage client portfolios.”
In addition to trading cryptocurrency, there are numerous advantages for advisors using IBKR’s platform. Among them:
- No ticket charges, no custodial fees, no minimums and no technology, software, platform or reporting fees.
- Interactive Brokers does not have an advisory team or a prop trading group to compete for clients. The same can’t be said for many leading trading platforms.
- Low-cost global trading and custody solution to advisors of all sizes.
- The ability to also trade stocks, options, futures, currencies, bonds and funds from a single integrated master account, and trade cryptocurrencies from the same platform.
- Free customer relationship management, portfolio management and trading platform, plus PortfolioAnalyst®, a tool to consolidate clients’ entire portfolio.
- Automated and flexible client billing.
- Free compliance and website building services.
- Debit card and Bill Pay available for US advisor clients.
Investing in cryptocurrency may not appeal to some of your clients. But for those who see it as a useful diversifier, Interactive Brokers now allows you to seamlessly integrate these trades alongside other asset classes through a single platform that provides a unified view.
If you’re interested in learning more about Crypto for Advisors at Interactive Brokers, visit ibkr.com/riacrypto.
