Skip to main content

Does E*TRADE Offer Crypto? ETFs and Alternatives for Crypto Exposure

Conor Scott, CFA| Updated July 18th, 2022

E*TRADE (also ETRADE) is one of the biggest US online brokers, founded in 1982. It offers low trading fees, including commission-free stock and ETF trading.

Unfortunately, ETRADE still lets us down in offering real access to cryptocurrencies such as Bitcoin, Ethereum, Dogecoin, Shiba Inu, Ripple, Stellar, Cardano, Litecoin, and other altcoins.

This article will break down exactly how to gain exposure to cryptocurrencies on ETRADE through alternative means of exposure such as stocks, crypto futures, coin trusts, and ETFs. We will also uncover the four leading exchanges that, fortunately, do provide real access to cryptos. 

Can you buy crypto on ETRADE?

The direct answer is no. ETRADE does not offer direct exposure to the most popular cryptos such as Bitcoin, Ethereum, and Dogecoin. 

Instead, investors can still gain exposure to cryptocurrencies on E*TRADE through four key alternatives tracking the prices of these cryptocurrencies. Below, we discuss how you as an investor can gain exposure to cryptocurrencies through stocks, crypto futures, coin trusts and ETFs.

Best ETRADE Alternatives for owning real cryptos

If your goal is to own all the cryptos you trade, then ETRADE is not for you. Below, we cover four alternatives:

eToro

eToro is a commission-free broker and the leading social trading platform. It supports over 45 cryptocurrencies and has many other products such as stocks and ETFs. Cryptocurrency trading costs 1%, and this fee is charged on top of the Bid-Ask spread market price for both buy and sell trades.
Disclaimer: 78% of retail CFD accounts lose money.

Coinbase

Coinbase is one of the biggest crypto exchanges in the world, with over 80 million users. It offers a wide range of different digital currencies.

Kraken

Kraken is the fifth largest Bitcoin exchange globally, according to trade volumes. Kraken is operational in over 200 countries, with a chunk of its 10 million users resident in Europe.

Binance

The world’s largest exchange by trade volume, Binance offers trading in excess of 300 cryptos (including Dogecoin, Ripple, Stellar, and so on). The user count reaches more than 28 million worldwide.

1# eToro

etoro logo
Visit eToro
78% of retail CFD account lose money.

eToro at a glance

Real Crypto Exposure
Staking
Cryptos supported+40
Commission0% for stocks, 1% for crypto
Custody feeNone

eToro provides a one-stop-shop service when it comes to the world of online brokerages, most major cryptos included. In addition to cryptos, it’s known for stocks, currencies, CFDs, and ETFs.

Staking is also on offer and represents one of the key reasons why any investor would prefer real crypto to alternative exposure. It works like a locked savings account. In exchange for sacrificing your liquidity, you can earn rewards on your crypto still technically belonging to you.

eToro sets itself apart through its unique feature: “social investing,” whereby inexperienced traders can copy those trades done by the pros. It works best for active traders or those serious about learning how to trade.

Users based in Australia, Europe, or the UK benefit from free access to insurance on their assets up to 1 million AUS, EUR, or GBP, respectively. Users in the US receive the standard FDIC insurance up to $250,000 for cash or money market instruments. Crypto positions are not covered worldwide, but some assets are kept in secure, cold (offline) storage.

Opening an account is intuitive and straightforward, and you can even use a “demo” account to start. Crypto purchases are funded through different options, such as credit cards or PayPal, but the only fiat currency accepted is USD.

If you want to learn more, check our eToro Review.

eToro Pros and Cons

  • Real Crypto Exposure
  • Commission-free stock and ETFs trading (not all ETFs are commission-free)
  • Slick, modern, and easy for anyone to use
  • Quick and smooth account opening
  • It makes trading social; allows users to follow and copy friends’ investments and the investments of famous traders
  • Offers a demo version
  • Does not offer the most cryptos relative to other exchanges
  • Spread, overnight, inactivity, and currency conversion fees higher than average
  • Only one currency account (USD)

2# Coinbase

coinbase logo
Visit Coinbase

Coinbase at a glance

Real Crypto Exposure
Staking
Cryptos supported+90
CommissionVaries
Custody Fee0.5% annualized (charged monthly)

Coinbase is one of the world’s top crypto exchanges in terms of cryptos supported and active users. It caters to crypto beginners and veterans alike. If you feel you’re part of the latter group, we wholeheartedly recommend checking out Coinbase Pro.

The breadth of cryptos on offer is impressive and includes Dogecoin, Shiba Inu, Ripple, Stellar, Cardano, and Litecoin, in addition to the classic Bitcoin and Ether.

Its mobile apps are highly rated and feel easy to use. The standard Coinbase app caters well to beginner and intermediate users, while advanced users should appreciate their Pro app. Enthusiasts also excited about non-fungible tokens or decentralized apps are served by Coinbase’s Wallet.

The platform does suffer from relatively high fees, however, with a complex fee structure on top. Breaking it down, smaller transactions face higher fees. For example, a $60 purchase using a US Bank Account as a source of fiat funds will run you $2.99 (commission) plus a 1.49% conversion fee. In other words, you’ll receive a net $56.12 worth of crypto exposure and an effective 6.5% fee.

Coinbase provides crime insurance (against hacking) up to $255 million for the entire platform, but breaches to your account due to personal negligence are not covered.

It’s regulated by the New York State Department of Financial Services in the USA. In Europe, Coinbase Ireland Limited (but not Coinbase Europe) is regulated by the Central Bank of Ireland.

Coinbase Pros and Cons

  • A world leader for real crypto trading
  • An impressive array of coins on offer
  • Three highly-rated mobile apps catering to all types of crypto investors
  • High fees, including a custody fee

3# Kraken

Kraken Logo
Visit Kraken

Kraken at a glance

Real Crypto Exposure
Staking
Cryptos supported+65
Commission0.9-2.0%
Custody feeNone

Kraken suits crypto traders and enthusiasts who want to own the cryptos they trade and be able to engage in futures trading too. The platform offers regulated futures contracts, including Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ripple.

We also like the inclusion of live support coupled with a website and platform explicitly designed for beginners. Kraken offers trading tools for beginners, scaling up to that needed by experts. In addition, there are detailed crypto guides alongside instructional videos and a podcast.

Staking is also there. Kraken appears to have a great array of choices. For example, we see the coin Kava (23% annually) and Polkadot (12%).

Its fees are much more reasonable when compared to Coinbase, usually capping at 2% for standard crypto transactions.

It lacks a wallet for retail users, but it maintains a reputation for storing 95% of the exchange’s assets in cold storage across different geographies.

It’s regulated by FinCEN in the USA.

Kraken Pros and Cons

  • Futures and staking options, in addition to real cryptos
  • Excellent choice for beginners or intermediates 
  • Relatively inexpensive fees
  • No personal wallet service
  • Not insured

4# Binance

Binance Logo
Visit Binance

Binance at a glance

Real Crypto Exposure
Staking
Cryptos supported300+
Commission0.1%
Custody feeNone

Binance holds the top spot of cryptocurrency exchanges worldwide, according to trade volume. It works best for true crypto enthusiasts or traders who want seemingly unlimited access to altcoins or lesser-known coins not available elsewhere. More than 300 supported cryptos is staggering.

Binance offers no real education or beginner training. The platform caters to people who’ve been trading with crypto for at least a while.

It provides numerous options for derivative trading for those volatility-hungry investors amongst us. The charting options and tools blow us away.

65% of users own Bitcoin, with the preferred allocation between 1% and 20%. Thus, the majority of users prefer some altcoin exposure.

The platform recently launched a $1 billion insurance fund to cover any potential hacks, in addition to keeping most crypto assets in cold storage.

Binance Pros and Cons

  • More than 300 cryptos available, including many altcoins
  • Multiple options for derivative trading
  • Insured
  • Limited educational tools

How to gain indirect exposure to crypto on ETRADE

1. Crypto Stocks

Popular stocks tracking the price movements of cryptos include Block, Coinbase, and Riot Blockchain. When we say “tracking”, we’re referring to the general correlations between crypto prices and those of these stocks.

If your goal is to follow the trends in cryptos prices without opening another brokerage account for directly owning cryptos, like with ETRADE, this can be a good option.

Pros and Cons of investing in Crypto Stocks
  • You can easily follow investors’ general interest and the movements of popular cryptos such as Bitcoin, Ethereum, Dogecoin, Ripple, Cardano, and Litecoin.
  • Good for balancing with some equity exposure, offsetting “pure crypto”, if that’s your goal.
  • They prioritize liquidity and convenience.
  • Your stock performance may significantly deviate from crypto prices (like Dogecoin), as the stock prices themselves include the particulars surrounding companies. For example, how are their cash flow and income statements?
  • Crypto stocks only trade during regular market hours, such as 9:30 am to 4:00 pm EST.
  • Liquidity can decline rapidly in adverse conditions, such as during a major selloff on the back of bad news. This drop in liquidity could add to your losses, while the major cryptos tend to have consistent liquidity.

2. Coin Trusts, Index Funds, & ETFs

Coin Trusts and crypto ETFs operate almost identically to stocks but with a few key differences.

Cryptocurrency trusts (or “coin” trusts) are like traditional trusts, except they are designed to hold only cryptos. Like ETFs, these trade similar to stocks but primarily on OTC markets – not exchanges. Coin trusts arrived first on the trading scene since the US SEC was wary of approving ETFs without full due diligence. There are certain tax benefits, which you should review with a local tax advisor knowledgeable about cryptos before buying.

On the other hand, ETFs trade on exchanges and provide quick, passive access to cryptocurrency exposure. There is a handful of crypto ETFs, such as the Proshares Bitcoin ETF (BITO).

Pros and Cons of investing in Crypto Trusts & ETFs
  • You can easily follow investors’ general interest and the movements of popular cryptos such as Bitcoin, Ethereum, Dogecoin, Ripple, Cardano, and Litecoin.
  • Good for balancing with some equity exposure, offsetting “pure crypto”, if that’s your goal.
  • They prioritize liquidity and convenience.
  • Your stock performance may significantly deviate from crypto prices (like Dogecoin), as the stock prices themselves include the particulars surrounding companies. For example, how are their cash flow and income statements?
  • Crypto stocks only trade during regular market hours, such as 9:30 am to 4:00 pm EST.
  • Liquidity can decline rapidly in adverse conditions, such as during a major selloff on the back of bad news. This drop in liquidity could add to your losses, while the major cryptos tend to have consistent liquidity.

3. Crypto Futures

While stocks, funds, trusts, and ETFs could be considered “buy-and-hold” instruments, crypto futures are for experienced investors wishing to incorporate leverage into their trading. ETRADE offers CFTC-regulated futures such as the CME Ether Contract, representing an underlying of 50 Ethereum coins. The platform provides four different contracts, covering Bitcoin and Ether.

Crypto futures trade nearly 24 hours a day and six days a week. The contracts are cash-settled, so no cryptocurrency ever changes hands – only your exposure to profit and loss. However, please be mindful that since futures trading happens through margin accounts and elevated leverage (sometimes up to 50x!), losses can mount quickly.

Pros and Cons of investing in Crypto Futures
  • They provide hands-on, nearly 24/6 trading, with the possibility of going short or long.
  • Bitcoin and Ether futures are regulated by the Commodity Futures Trading Commission (CFTC).
  • They offer the opportunity to use significant leverage in your trading.
  • Leverage is a double-edged sword, and losses can happen very quickly.
  • They provide no direct access to cryptos.
  • Only the most popular cryptos are covered, namely Bitcoin and Ether.

Why prefer crypto ownership over indirect exposure?

There are critical arguments for each angle, and every investor is different. We’ll walk you through some of the top points for each.

Real Cryptos: True ownership, enabling secure (offline) storage and long-term holding; High-return staking paying yields well above traditional bonds; Reduced transaction fees on average relative to coin trusts and funds.

Indirect Exposure: Follow the general trends with cryptos while not owning them; Avoid the hurdles of crypto ownership, such as opening a second brokerage account for crypto trading or registering for a crypto wallet; Follow multiple coins at once, such as through an ETF or index.

Wrapping up

It boils down to your personal preferences. Do you want to own crypto or follow it as part of a greater traditional stocks and bonds portfolio?

If owning crypto is the name of the game, then you’ll be happy to know that most crypto exchanges streamline the account opening process to a few intuitive. Then direct ownership, staking, and leveraged trading are all yours through your mobile phone. If you opt for an all-in-one, such as eToro, you can have crypto while concurrently managing a traditional portfolio of stocks, ETFs, futures, etc.

The bottom line: in 2022, it’s become incredibly easy to own crypto, and you likely don’t have to forgo the opportunity in favour of stocks- or futures-based exposure. However, great crypto funds are offering passive exposure to the sector.

Did we answer all of your questions? If not, please let us know your feedback in the comments below!

Conor Scott, CFA
Contributor

Conor is a CFA charterholder who has been active in the wealth management industry since 2012, continuously researching the latest developments affecting portfolio management and cryptocurrency.

linkedin