Interactive Brokers adds cryptocurrency trading, joining rivals

Trader Talk

Interactive Brokers is introducing cryptocurrency trading, adding to competition for self-guided virtual currency traders among brokerages.

The Greenwich, Connecticut-based company will allow users to buy and sell Bitcoin, Ethereum, Litecoin and Bitcoin Cash through a partnership with crypto brokerage Paxos Trust, according to a statement Monday. Customers will pay a commission of 0.12% to 0.18% of a trade’s value, or up to $1.80 per $1,000 trade, depending on how much they transact.

“We started with four that we thought were the basics,” said Steve Sanders, executive vice president of marketing and product development at Interactive Brokers. “It could be the case that we expand that,” he added. “We just view crypto as yet another asset class.”

U.S. cryptocurrency markets this year are seeing dramatic price swings and closer regulatory attention. SEC chair Gary Gensler has asked Congress to pass a law giving the agency legal authority to monitor crypto exchanges and the regulator has already exerted its existing power in cases like a recent lawsuit against the founder of BitConnect, a cryptocurrency exchange.

“As the regulatory environment emerges, we’ll be there to work with it,” Sanders said. “We offer all of these asset classes — stocks, options, foreign exchange, futures, bonds and metals. We work with a lot of regulators.”

Interactive Brokers will be up against rivals such as Robinhood that offer commission-free crypto trading. Robinhood instead earns money on virtual currency transactions through rebates from trading venues, and the “spread,” or difference between the estimated cost to buy and sell virtual tokens.

With about 1.5 million customer accounts, Interactive Brokers cultivates an active and seasoned clientele. Customers have an average of approximately $250,000 in their accounts, according to Sanders. Robinhood, in contrast, had about 22.5 million funded accounts at the end of June, and its average account size was roughly $5,000 as of February.

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