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Cryptos: what are the alternatives to centralised platforms?
While the fall of FTX has cast doubt on the solidity of centralised platforms, some brokers such as Bitpanda, Trade Republic and Coinhouse could benefit.
Two months after its fall, FTX is still on everyone's mind, especially those of retail investors.
While some have taken everything off the platforms to keep their cryptos themselves - Binance has seen record withdrawals in recent weeks - others still want to use third parties, but are looking for other companies called "safer" even if it means paying a bit more.
What are they?
Of course, there is no perfect player, but some European brokers, who are more regulated and transparent, could come out on top in the coming months by attracting new customers.
We warn you, the list is not exhaustive 😉
Bitpanda 🇦🇹
Bitpanda is an Austrian investment app that claims just over 3 million users. Created in 2014, it allows you to buy, sell and store shares and... cryptocurrencies. Just over 50 cryptocurrencies are available on its app.
One of Bitpanda's main advantages is that the company has an Austrian licence, which is one of the most restrictive on the planet. Its (big) weakness? The platform claims to be "free" on transactions and only takes a "spread" on trades (the difference between the price at which they buy the crypto and the price at which they sell it to you), except that this spread can be as high as 4%. That stings!
Coinhouse 🇫🇷
Coinhouse is France's leading crypto broker. Founded in 2014, the former House of Bitcoin, which is registered with the Autorité des marchés financiers (AMF) as a Digital Asset Service Provider (DASP), also allows you to invest in more than 50 crypto currencies, which it can hold for you.
Coinhouse's fees vary: crypto purchases by bank card are 3.49%. "Rates will come down soon," says Coinhouse boss Nicolas Louvet. On scheduled purchase services (you buy cryptos at regular intervals), the fee is 2%. Coinhouse's advantage is that while it charges a commission on buying and selling, its spread is very low because it buys the cryptos itself from platforms such as Kraken or Coinbase.
Coinhouse, which is one of the only players to have customer advisers (paid services), also allows you to invest in savings and investment products. Its passbooks were affected by the collapse of the American company Genesis, which guaranteed part of the returns on the passbooks. The partial reimbursement of French customers - just over 1,000 - has just begun.
Revolut 🇬🇧
Revolut is one of Europe's leading fintechs. Also founded in 2014, the British company, which claims more than 15 million users, allows users to buy and sell shares and also cryptocurrencies.
The advantage of Revolut is its great simplicity and the number of cryptocurrencies available (95 in total). The London-based fintech's fees are also fairly transparent as they are displayed on every transaction: 1.99% per transaction for standard customers and 0.99% for Premium (and Metal) customers.
The big weakness of Revolut is that you can't use your cryptocurrencies outside the app (you can't send them to an external wallet, for example).
Trade Republic 🇩🇪
Trade Republic is the latest addition to the 'crypto' family. Launched just before the Covid crisis in 2019, the German investment platform started with equities and for the past few months has been offering to invest in cryptos; the service is available in 12 European countries, including Germany, France, Spain.
Trade Republic, which already has just over two million customers, is regulated in Germany and its digital asset custody business is regulated in Austria. "Austrian regulation is the most interesting for expanding in Europe", according to Matthias Baccino, Head of France at Trade Republic (read his interview).
Trade Republic's big strength is its commission system. The company does not take a percentage of buying or selling volumes, but charges one euro per transaction whatever the amount. Its weak point? The company doesn't allow you to withdraw your cryptocurrencies either, but that should happen soon. In the meantime, to get your money back, you need to sell them on Trade Republic and withdraw fiat currencies (euro, pounds...).
eToro 🇮🇱
eToro is an Israeli company founded in 2007. It now claims 30 million customers who can buy stocks and cryptocurrencies (more than 70 cryptocurrencies are available).
One of the strong points of eToro, which is regulated in the UK in particular, is its very easy-to-use interface with the ability to copy other traders' investment strategies. The company also allows users to withdraw their cryptocurrencies from the app. "The user has total control over their investment, regardless of the actions of the broker or the exchange," explains a spokesperson.
The company charges a 1% commission on the purchase and sale of cryptocurrencies.
Swissborg 🇨🇭
Swissborg is one of Switzerland's best-known crypto brokers. Launched in 2017, the company claims more than 700,000 customers, mainly in Switzerland, France and the UK.
Swissborg, which is in the process of raising funds from its community (more on this in the Premium edition), has a wide range of services with the purchase of cryptocurrencies (26 in total) and staking and lending which, for the latter, are not without risks as successive crashes have shown of Celsius and others.
Swissborg's fees are among the lowest on the market with a commission of 0.10% only on withdrawals. The company charges up to 1% on transactions depending on cryptocurrencies and amounts. One of Swissborg's weak points is that you need to hold and immobilise the company's token, the CHSB, to access its Premium services (expect to pay around €4,000 at present to enjoy the best benefits). As this token is fairly limited in its use, this presents a fairly significant investment risk.
Before investing in any product, investors should fully understand the risks involved and consult their own legal, tax, financial and accounting advisors.
