Crypto at Traditional Brokers
Many stock brokers now offer crypto trading. Here's what you need to know about buying Bitcoin through Fidelity, Robinhood, and others.
SIPC Does NOT Cover Crypto
Unlike stocks, crypto held at brokers is NOT covered by SIPC insurance. If your broker fails, your crypto may not be protected. Some brokers offer separate crypto insurance, but it varies.
Brokers Offering Crypto
| Broker | Coins | Fees | Withdraw? |
|---|---|---|---|
| Robinhood | 15+ | Spread only | Yes |
| Webull | 40+ | 1% spread | Yes |
| Fidelity Crypto | BTC, ETH | 1% spread | No |
| Interactive Brokers | 4 | 0.12-0.18% | Yes |
| SoFi | 20+ | ~1.25% | Yes |
| Public | 10+ | 1-2% | Yes |
Why Buy Crypto at a Broker?
Convenience
One account for stocks, ETFs, and crypto. No need to manage separate crypto exchange accounts.
Familiarity
Same interface you use for stocks. No learning new crypto exchange platforms.
Regulatory Clarity
Brokers are regulated by SEC/FINRA. Crypto exchanges face uncertain regulation.
Why NOT to Buy Crypto at a Broker
No SIPC Protection
Your stocks are protected up to $500,000 by SIPC. Your crypto isn't. If the broker fails, you may lose your crypto.
Limited Selection
Fidelity only offers BTC and ETH. Coinbase offers 200+. If you want altcoins, brokers are limited.
Higher Fees
Broker spreads (1%+) are often higher than crypto exchange fees (0.1-0.5%).
Can't Self-Custody
Some brokers (like Fidelity) don't let you withdraw crypto to your own wallet. "Not your keys, not your coins."
Bitcoin ETFs: An Alternative
Since January 2024, spot Bitcoin ETFs trade like regular stocks:
- IBIT (BlackRock): Largest, lowest cost
- FBTC (Fidelity): Strong alternative
- GBTC (Grayscale): Original, higher fees
Bitcoin ETFs ARE covered by SIPC (they're securities). For simple Bitcoin exposure, ETFs may be better than direct crypto at brokers.
Tax Considerations
Crypto is taxed as property. Every sale, trade, or use triggers a taxable event. This is the same whether you hold at a broker or exchange.
Brokers typically provide better tax reporting (1099s) than some crypto exchanges.
Our Take
Buying crypto at brokers makes sense for:
- Small allocations (under 5% of portfolio)
- Bitcoin/Ethereum only
- Those who value convenience over control
For serious crypto investing, consider:
- Dedicated exchanges (Coinbase, Kraken) for better selection and fees
- Bitcoin ETFs for SIPC protection
- Self-custody if "not your keys" concerns you
The Bottom Line
Crypto at brokers is convenient but comes with trade-offs: no SIPC protection, limited coins, higher fees. For simple Bitcoin/Ethereum exposure, a spot Bitcoin ETF may be the better option—it's SIPC-protected and trades commission-free.