Cryptocurrency has taken the world by storm. Growing interest in Bitcoin and Ethereum, in addition to altcoins, has shaken the investing landscape and left big-time investors confused. So, it’s no wonder that the most common questions today are, what is cryptocurrency and how do I buy some?
This article will answer both of these questions with a special look into how this is done with Webull. Webull is an investment platform that launched in 2018 to provide investors with greater insight into stocks and ETFs. This platform is informative without being exhausting. Brand new investors might find it a touch overwhelming, but intermediate investors find they can really hit their stride with Webull.
Webull is also known for offering its users completely free trades of stocks, ETFs, and investments in retirement accounts.
In addition, Webull offers a full suite of products like retirement accounts, margin investing, a stock simulator, and extended trading hours.
For more on Webull, see this article.
Webull is a new entrant into the world of cryptocurrency. It currently offers this service on their mobile application after a user submits an application. The cryptocurrencies available are Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Litecoin (LTC), Dogecoin (DOGE), Zcash (ZEC), Stella Lumens (XLM), and Ethereum Classic (ETC).
Once your application to buy and sell cryptocurrency is accepted, you can trade at any time of the day and any day of the week. This is because cryptocurrency is not regulated by a commission that sets the regulations.
The cryptocurrency transacting platform on the Webull app is made just like the experience for trading equities. There is a lot of research available but it isn't overwhelming like many other advanced brokerage firms.
Crypto is a new area of exploration for many investors so it’s no mystery why there is some confusion around the subject. In its simplest form, cryptocurrency is a digital form of currency that is not issued by a central authority like a government.
Cryptocurrencies are run off decentralized networks, which utilize blockchain technologies. This makes cryptocurrencies unique because it is virtually impossible to counterfeit the coins.
If this has piqued your interest in learning more about cryptocurrencies, check out this article.
In November of 2020, Webull announced that it would allow users to purchase and sell cryptocurrency through the platform. This comes in response to the more than 100,000 users that requested to sign up for the service through the app platform.
There is no cost to sign up for cryptocurrency investing with Webull nor are there any commissions associated with using the service. This allows investors everywhere to try Webull as their main platform for investing in currencies. However, investors are charged a spread whenever they purchase or sell a coin. More on this below.
In the world of digital coining, there are several forms of cryptocurrencies and each has its own advantages and disadvantages. Webull currently supports trading with 15 cryptos:
Webull has explicitly stated that the company is currently working on adding more coins in the future.
In addition to these 15, they also have a number of cryptocurrencies that are available for tracking. While you can't trade them with Webull, you can monitor their price movement. This includes over 20 extra cryptos.
Webull offers 24/7 access to crypto trading. And while there are no specific commissions associated with crypto trading, Webull does charge a 100-basis point spread on both the buy and the sell.
This is fancy terminology for saying there is a 1% markup and markdown of your crypto transaction. For instance, if you are planning to purchase $100 worth of Bitcoin, $1 (or 1%) will go to Webull for the service. The same is true when you sell.
Because cryptocurrencies are not regulated or brokered by an officially recognized exchange, trading can happen at all hours of the day and all days of the week. Even holidays!
Before you can trade crypto on the platform, you will need to complete an application. To do so, follow the instructions below:
Like its stock market investing approach, Webull offers a large amount of data and information without overwhelming its users. With Webull, users can even create their own customizable charts to track what is truly important to them. Crypto trading also comes with real-time data and specific indicators to keep you up to date.
Webull houses their cryptocurrency portfolios on the same app as other securities meaning that all your wealth can be available from the same platform. This is a huge benefit that allows users to view one source of truth without moving from one account to another.
At the same time, it's important to note that your crypto and stocks are not actually stored in the same account. Webull Crypto and Webull Financial are two separate entities. More on the implications of that a little later.
Another benefit of using cryptocurrency is instant settlement. Because no physical processes are used when buying or selling cryptocurrency, your money will settle instantly. This means that when you put in an order to sell any amount of coins, that money will appear in your account instantly.
With equities such as stocks and ETFs, it can take up to several days before those funds will actually appear in your account.
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Webull also offers fractional coins. This means that instead of purchasing the entire coin, you can type in a dollar amount and elect to purchase only that amount.
Fractional coins are a great option for those that might be timid about starting a cryptocurrency portfolio. This is absolutely a risky asset and like all equities, it is very possible for you to lose more than you invested. Of course, nothing is lost until you actually sell the asset. But on paper and in real life, losing it all is a real possibility.
This is one reason why fractional coins and stocks have become such mainstream instruments. Another reason is simply accessibility. You no longer have to pay the full asking price for a specific investment. If this were not the case, purchasing coins would be limited to only the investors with deep pockets.
Purchasing a fractional coin does not inherently mean you have less risk, but it does mean you will be less exposed depending on how diversified your portfolio is. You will be affected by proportional price reductions and price increases no matter how much you own.
The more diversified your portfolio, the less impactful large swings become to your overall financial picture.
Webull crypto trading is completely separate from the Webull entity that trades stocks and ETFs. Webull Financial LLC is a broker-dealer that is registered with the Securities and Exchange Commission (SEC).
As such, it has certain regulations and protections. Securities such as stocks and ETFs are protected by the Securities Investor Protection Corporation (SIPC). This protects investors against the insolvency of a broker-dealer.
Cryptocurrency, however, is not under the same protection. Because there is no regulatory authority for cryptocurrency, there is also no protection. This is one reason it is held by a completely separate entity called Webull Crypto LLC.
It is also important to note that as cryptocurrency becomes increasingly popular, legislation may come into effect that could adversely affect the use, transfer, exchange, and value of cryptocurrency.
Because of the separate entities and the increased risks associated with cryptocurrencies, users will not be able to transfer their coins directly into or out of Webull’s platform. Users must liquidate (sell) their assets first and then transfer the cash value of the coins. Keep in mind that transferring cash from one platform to another could take several days to complete.
As a result, you cannot transfer your Webull crypto onto a hardware wallet. This is generally the safest way to store your crypto because then you have control over it. When you hold your crypto with Webull, there is the potential for Webull to get hacked and your crypto to be lost.
In order to avoid this risk, it's generally better to use a dedicated crypto exchange like Coinbase. This will allow you to transfer your crypto off of the exchange and hold it securely.
There are two primary reasons why Webull does not allow you to transfer your crypto off of the platform. The first of which are they want to protect investors. A crypto transfer is irreversible and if you accidentally send your crypto to the wrong location, there is absolutely no way to get it back.
Second, Webull needs to report your crypto gains to the IRS. In order to do that, they need to know how much you paid for your crypto. If you were able to transfer crypto in and out of Webull, they'd have no way of knowing how much you paid for your coins.
If you are still skeptical of investing in cryptocurrencies, know that Webull offers 24/7 support online and over the phone. If you have questions specific to Webull’s cryptocurrency policies, you can have all your concerns addressed by knowledgeable and trained staff.
Webull has both a mobile and desktop platform which allows users to trade from the comfort of their home, or from across the globe.
By using Webull’s desktop platform, users can use nearly 50 different widgets to analyze trends, decipher market information, and place trades more efficiently. Webull is truly focused on providing an optimal experience for its customers and is known for truly listening to their desires.
This platform has several in-depth and comprehensive tools for crypto investors, but they also place heavy emphasis on user simplicity and ease of use.
While the information may be overwhelming for newcomers, Webull is received best by intermediate investors who can use the data and tools to their full advantage.
As previously stated, cryptocurrency investing is not for every investor due to the inherent risk. However, Webull offers a compelling reason to try.
Where Webull currently falls short is in the inability to transfer your crypto off of the platform. This feature is a must-have for experienced crypto investors who have the saying "not your keys, not your coins". They are referring to the public and private keys needed to transfer your crypto from one place to another.
Without those keys, you don't have much control over your crypto. Additionally, you subject yourself to the risk of loss due to a hack of the exchange. However, this may be a feature that Webull is able to roll out in time.
For now, Webull is a great platform for beginners in the crypto investing space because of how easy it is to get started. Give it a try today and start to build your cryptocurrency portfolio!