Interactive Brokers, which has been rated as the best online broker for eleven consecutive years by Barron’s, has debuted a crypto trading service that allows registered investment advisors to trade Bitcoin, Ethereum, Litecoin, and Bitcoin Cash on behalf of their clients around the world.
This is in addition to being able to trade stocks, options, futures, bonds, mutual funds, and ETFs for their clients through the platform. The service launch by the famous broker firm attests to the continued popularity of digital currency.
“Allocating a small percentage of assets to cryptocurrency as part of a well-diversified portfolio has steadily become more commonplace, and advisors may wish to recommend cryptocurrency to their clients,” said Steve Sanders, EVP of Marketing and Product Development at Interactive Brokers. “Adding cryptocurrency trading underscores our ongoing dedication to providing advisors with the investment products and tools they need to successfully manage client portfolios and grow their businesses.”
Offering crypto trading services to institutional financial advisors means some sort of approval for the asset by the vastly popular company. Effectively, the service will be accessible to its 5,731 RIA clients. The platform allows RIAs to trade all assets – including crypto now, in over 135 markets from a single account. The IRAs can analyze and manage a portfolio for their clients.
This will definitely make many people trading through the financial brokers on the platform become interested in holding crypto as part of their portfolio for purposes of diversification. Besides, it makes crypto look appealing to institutional traders.
As a key competitor to Robinhood – which already has crypto trading functionality for its clients, IB will use the new service to innovate and meet new clients’ demands. While Robinhood has a better appeal to younger investors, the majority who are trading financial markets for the first time, Interactive Brokers has a better appeal to institutional clients and its customers have three times asset value on average per customer than Robinhood.
Interactive Brokers has over 1 million active client accounts from highly regulated areas like the U.S., U.K., Canada, Japan, Australia, Hong Kong, and Singapore. It provides services to over 220 countries and territories.
The service, which is offered thanks to a partnership with the Paxos Trust Company, is initially available to customers in the United States but would later be accessible to financial advisors in other parts of the world. Although the service does not include commission-free trading like with some brokers, institutional brokers will pay no custodial or reporting fees, and the fee is just 0.12% – 0.18% per trade. There is a $1.75 minimum per order.