Online retail brokerage firm Interactive Brokers Group has added digital assets to its offerings, launching a crypto trading platform that allows its clients to trade Bitcoin, Ethereum, Litecoin, and other altcoins at a much lower fee than its competitors.
Interactive Brokers partnered with Paxos Trust Company, a regulated provider of cryptocurrency services that also works with companies like PayPal on digital asset trading, to enable the crypto service.
It said it would charge between 0.12 percent and 0.18 percent in brokerage fees per transaction, depending on the monthly volume, which is lower than the 2 percent charged on other crypto exchanges.
“While other crypto exchanges and brokers charge fees of 2 percent 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-to 0.18 percent 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,” the company said in a statement.
The brokerage firm, which says it caters to active traders and sophisticated investors, announced in June that it would launch crypto trading by the end of the summer, an acknowledgment by Chairman Thomas Peterffy that crypto assets are becoming more mainstream.
Soaring demand for crypto assets fueled by high returns in recent years has prompted a number of traditional retail brokerage firms to move into crypto trading services to serve their clients. Charles Schwab and Fidelity offer access to bitcoin futures. Others that already offer crypto trading include Robinhood and TradeStation.
Investors, both retail and institutional, poured into Bitcoin and other digital assets in 2021. The price of the world’s largest digital currency soared to a record high of almost $65,000 in mid-April before plunging to less than $30,000 in June. It is currently trading at $47,749.52.
“As financial markets evolve, sophisticated individual and institutional investors are increasingly seeking out allocations to digital currencies as a means of achieving their financial objectives,” said Milan Galik, CEO of Interactive Brokers. “In giving our clients access to cryptocurrency trading, we recognize the need to meet the growing investor demand to trade cryptocurrency alongside other asset classes in a convenient and low-cost way.”
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?