Only a handful online brokers accept deposits and withdrawals in Bitcoin. None of them are stock brokers.

Bitcoin is arguably one of the most popular investments and trading instruments nowadays. Many popular online brokers allow us to trade Bitcoin along with other in-demand cryptocurrencies. However, only a handful accept deposits and withdrawals in Bitcoin.

It also needs to be noted: online brokers that accept bitcoin deposits are usually forex and CFD brokers. Such as LiteForex, AvaTrade, Plus500, Traders' Way, Trade360, among others.

Are there stock brokers that accept bitcoin deposits? Unfortunately, there is none. Stock brokers are liable to stricter regulation that requires them to exercise extra care in accepting fund deposits and processing withdrawals -which prevents them from accepting Bitcoin deposits.

Stock Brokers That Accept Bitcoin Deposit

Three main reasons may explain why hardly any stock broker accepts bitcoin:

 

Volatility

Bitcoin fluctuates greatly for as long as it is traded in the market, influenced by factors such as investor and user sentiments, government regulations, and media hype. It began at zero dollars when it was introduced in 2009, then rose to over $900 by the end of 2016. Bitcoin easily surpassed $40.000 at the beginning of 2021, but then fell to $29,795 in July of the same year. It rose again to a record new all-time high at $68,990 by November 2021, before dropping to $49,243 in December.

This kind of fluctuation is not conducive to maintain steady risk management for both investors and brokers.

 

Anonymity

Bitcoin rose to prominence as an alternative payment method with cheaper costs and faster processing, as well as its capability to handle anonymous transactions that did not and do not present in traditional bank transfers. However, Bitcoin's anonymity makes it challenging for brokers' compliance departments.

Licensed brokers are required to follow a set of standard procedures, including but not limited to ensuring depositors' legal identities and conforming to anti-money laundry directives. Both could not be guaranteed when and if the broker itself accept Bitcoin deposit.

 

Legalities

There are huge controversies surrounding Bitcoin legalities. Some countries recognize it as a part of "commodities" or "investment assets", instead of "currency". Consequently, you may have to pay taxes on your Bitcoin savings, but the tax payment should be done in dollars (or any other currency accepted in your country). Thus, understandably, no licensed stock brokers could accept Bitcoin deposits as long as it is not recognized as an official currency.

More so in countries where Bitcoin is banned outright. Unlike CFD brokers that may operate in several countries around the world with multiple licenses, stock brokers are highly dependent on domestic financial supervisory authority. Therefore, they could not offer any payment options that are declared illegal.

In order to maintain secure risk management, it would be better to convert your Bitcoin savings into dollars before using it to invest in stocks. It may be a bit cumbersome, but there's no other alternative currently.

Would stock brokers allow Bitcoin deposits in the future? The most tricky problem lies in legalities. As long as it is solved, stock brokers anywhere would most probably compete to offer the best terms for Bitcoin deposits. However, we never know when it would be.