Despite an extended bear market that now spans more than 13 months, the interest in investing in cryptocurrencies is still very high.
Over the last couple of months, several of the world’s leading brokers and financial institutes have started working on solutions that would allow them to offer Bitcoin, Ethereum, and Ripple to their clients. However, so far no major financial institution has shown any interest for the altcoin market which has some people wondering if the big brokers will ever start offering altcoins.
The Problem with Altcoins
Today some brokers are offering Bitcoin futures and others have applied to start offering Bitcoin and Ethereum ETFs. But so far, no major broker has shown an interest in the smaller altcoins, and it’s unlikely that it would ever happen for several reasons.
In fact, the quick answer to whether big brokers will start offering altcoins is a plain no. There is just too much risk involved and not enough established value behind the altcoins. A leading financial institute wouldn’t put their reputation or their clients’ funds at the risk of an altcoin that could collapse and disappear at any given moment.
As you probably know, every serious broker on the global market is tightly regulated by the world’s leading regulatory bodies. This means that there are rules about what type of assets and instruments these brokers can offer their clients.
For example, in the United States, the major exchanges and brokers have to ask the SEC for permission to offer new instruments. And considering how reluctant the SEC has been and still is about giving out permission to offer derivatives based on Bitcoin, we doubt altcoins would ever be accepted.
Not Enough Value
As a major international broker, your goal is to offer customers access to lucrative and high-valued markets and the altcoin market is just not big enough.
At the time of writing, according to CoinMarketCap.com, Bitcoin had a market capitalization of over 63 billion dollars which is pretty huge for any single instrument. And when you compare that to the fifth biggest cryptocurrency called EOS which has a market cap of just above 2 billion dollars, it becomes clear why no major brokers are showing an interest in altcoins.
What Are The Options If You Want to Trade Altcoins?
So if you can’t use any of the world’s largest brokers to trade altcoins then how do you trade them?
Well, even though the large brokers and exchanges aren’t offering altcoins right now, there are other legitimate services that do.
In our opinion, one of the most fun ways of trading altcoins is by using CFDs. Better yet, CFDs are easy to get started with. As a new trader, we suggest you open an account with one of the top cryptocurrency brokers for beginners since they all offer a variety of altcoins. Some brokers are better than others, and some offer more altcoins than others, therefore you should evaluate them all before picking the broker you want to stay with.
In addition, most traders are relying on cryptocurrency exchanges for their altcoin trading. In fact, all the major cryptocurrency exchanges are offering altcoins to their customers, and it is one of the easiest ways to trade them.
If you were hoping to be able to trade altcoins with big stockbrokers and exchanges your opportunities look slim. As mentioned, the risks are too high and the value too low for any major financial institution to be interested in altcoins. However, that does not mean you can’t trade altcoins, and at the moment, you are able to trade Bitcoin and Ethereum with some of the big stock exchanges both in the US and Europe.
Moreover, there is actually a multitude of established and trustworthy forex and CFD brokers that offer altcoins, and you can always get a trading account with a cryptocurrency exchange.