{"id":6482,"date":"2022-05-31T19:55:29","date_gmt":"2022-05-31T19:55:29","guid":{"rendered":"https:\/\/ifg.local\/articles\/how-to-invest-in-crypto-the-islamic-way\/"},"modified":"2024-02-26T15:38:25","modified_gmt":"2024-02-26T15:38:25","slug":"how-to-invest-in-crypto-the-islamic-way","status":"publish","type":"post","link":"https:\/\/www.islamicfinanceguru.com\/articles\/how-to-invest-in-crypto-the-islamic-way","title":{"rendered":"How to invest in crypto the Islamic way – IslamicFinanceGuru"},"content":{"rendered":"

So you\u2019ve decided to take the plunge and actually start investing in crypto. Now you\u2019re delving into actually buying it and you\u2019re not sure where to start.<\/span><\/p>\n

<\/p>\n

Fear not: we\u2019ve been exactly in this position recently so we\u2019ve collated our knowledge here to make sure that Muslims know exactly how to invest in crypto safely and in a halal way.<\/span><\/p>\n

We think the best place overall to buy crypto is Binance<\/b>. Honourable mentions go to Coinbase Pro and Swissborg as well.<\/span><\/p>\n

We\u2019ve based that view on 3 key metrics:<\/span><\/p>\n

    \n
  1. Fees<\/span><\/li>\n
  2. Choice<\/span><\/li>\n
  3. Ease of use<\/span><\/li>\n<\/ol>\n

    This article is part of our crypto series<\/a>.<\/p>\n

    Methodology<\/b><\/h2>\n

    First it was a question of narrowing down the search to a few brokers. Our view is that for this narrowing down exercise, you have to look at the 3 things above in roughly equal measure. Swissborg, for example, has a really good user experience and got rave reviews from veteran crypto experts we’ve spoken to for exactly that reason. Binance is great on the fees side but perhaps not as amazing on the design side. Coinbase Pro is a bit of a hybrid.\u00a0<\/span><\/p>\n

    After this initial filtering, we\u2019ve given our highest weighting to fees. That\u2019s because our mission at IFG is to <\/span>make Muslims wealthier<\/b>. When it comes to investing, fees are something you should look at very closely.<\/span><\/p>\n

    Fees<\/b><\/h2>\n

    Let\u2019s compare the same trade for all 3 brokers. Let\u2019s suppose we are buying \u00a3100 of Ethereum.<\/span><\/p>\n

    The costs would be as follows:<\/span><\/p>\n

    Binance:\u00a0 \u00a30.10<\/strong><\/p>\n

    Coinbase Pro: \u00a30.50<\/strong><\/p>\n

    Swissborg: \u00a30.99<\/strong><\/p>\n

    Binance is the clear winner when it comes to fees. We think that\u2019s the most important thing here.\u00a0<\/span><\/p>\n

    Choice<\/b><\/h2>\n

    Broadly speaking most major crypto exchanges will feature all the major coins. We did not see any major gaps in any of the exchanges in discussion.<\/span><\/p>\n

    However, we\u2019re going to give <\/span>Binance the number 1 spot <\/b>for choice simply because it was the only place we could buy the HBAR token.<\/span><\/p>\n

    Ease of use<\/b><\/h2>\n

    This is where Binance is light years behind Swissborg and Coinbase Pro. Binance\u2019s interface is clunky and complicated. Their mobile app seems to acknowledge this as they have a \u201clite\u201d mode which simplifies the interface. But it still feels a bit clunky and the whole things needs an overhaul in our view.<\/span><\/p>\n

    Coinbase Pro and Swissborg, on the other hand, are a delight to use.<\/span><\/p>\n

    In terms of the sign-up process, we had no problems with any of them. Everything was relatively swift and the deposit mechanism works well.<\/span><\/p>\n

    We did run in to a couple of hitches personally though which are worth flagging:<\/span><\/p>\n

      \n
    1. Ibrahim took a while to get verified on Binance. Mohsin was pretty much instant though. We don\u2019t think this is a slight on Binance though, perhaps Ibrahim just needed to get manually pushed through or something.<\/span><\/li>\n
    2. We know from our veteran crypto-investing friends that lots of people struggle to deposit to crypto exchanges from their banks. For instance, we were unable to send money to Binance from a Starling account, but Lloyds and HSBC worked fine. Again, there is no slight on any of the exchanges here, just that some banks are taking a blanket policy of not letting their customers deposit into crypto exchanges.<\/span><\/li>\n<\/ol>\n

      On this front, Swissborg edges the number 1 spot but Coinbase Pro is a close second. Binance is a very distant third.<\/span><\/p>\n

      Coinbase v Coinbase Pro<\/b><\/p>\n

      Just a quick note on the difference between Coinbase and Coinbase Pro.<\/span><\/p>\n

      Coinbase and Coinbase Pro have no difference between them, except Coinbase Pro is cheaper than Coinbase. I have no idea why they do it this way! But it obviously makes Coinbase Pro a no-brainer over Coinbase.<\/span><\/p>\n

      Both have different apps and are accessed via different domains. It should be obvious which one you are using.<\/span><\/p>\n

      Depositing fiat<\/b><\/h2>\n

      You may be used to buying shares with a broker. Crypto is not the same because you are dealing with two different worlds in one place \u2013 fiat and crypto.<\/span><\/p>\n

      With some tokens it will genuinely be as straightforward as depositing your currency (e.g. USD, GBP) and buying the token with that.\u00a0<\/span><\/p>\n

      However, sometimes it can get a little more complex. To give you an example, we wanted to buy a token called HBAR (worth checking out by the way). To do that on Binance, you can\u2019t just deposit GBP and buy HBAR. Instead, you have to deposit GBP, convert that to Binance\u2019s own local token called BNB.<\/span><\/p>\n

      BNB acts as a kind of halfway house between crypto and fiat. Binance created it to be a common medium on their platform. So to buy HBAR this is the flow:<\/span><\/p>\n

      Send GBP from my bank account to my Binance account > convert GBP to BNB > buy the HBAR\/BNB pair on Binance.<\/span><\/p>\n

      Sharia compliance<\/b><\/h2>\n

      Check out our <\/span>crypto<\/span><\/a> page for our breakdown of which tokens are halal or haram.<\/span><\/p>\n

      Once you\u2019ve established that the token you want to buy is halal, you just need to make sure you\u2019re buying the actual token on your broker of choice and not a derivative.<\/span><\/p>\n

      A good way to test this is to see once you have bought it, can you withdraw your tokens on to your own private wallet? If you cannot, chances are you don\u2019t actually own any tokens and instead you just own a derivative.\u00a0<\/span><\/p>\n

      This is an area where I initially had some concerns on Binance. The way they display some of their tokens is as a \u201cpair\u201d. E.g. BTC\/USD. Those familiar with forex will know that you buy pairs in forex too which got me wondering if I was actually buying the token or if I was just buying a derivative.<\/span><\/p>\n

      Pleasingly though, I checked and since you are able to withdraw the tokens to your offline wallet, it is clear that you are actually buying the tokens. The reason Binance label it as a pair is because with crypto more than anything, people are buying using potentially different currencies \u2013 e.g. GBP, USD or even other types of crypto like BTC or ETH. So it helps to have a market for each particular pair.<\/span><\/p>\n

      Conclusion<\/b><\/h2>\n

      Getting started with investing in crypto isn\u2019t that complicated once you get past the initial fear. We think that the most important metric is fees \u2013 that\u2019s why we think Binance<\/a> is number 1.<\/span><\/p>\n

      If you want the best hybrid of fees and ease of use, then Coinbase<\/a> Pro is good.<\/span><\/p>\n

      And if you just want a super-slick experience and you\u2019re willing to pay more on fees, then Swissborg<\/a> is the one for you!<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

      So you\u2019ve decided to take the plunge and actually start investing in crypto. Now you\u2019re delving into actually buying it and you\u2019re not sure where to start.<\/p>\n","protected":false},"author":25,"featured_media":6483,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","wds_primary_category":12},"categories":[12,13],"tags":[33],"acf":[],"_links":{"self":[{"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/posts\/6482"}],"collection":[{"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/comments?post=6482"}],"version-history":[{"count":2,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/posts\/6482\/revisions"}],"predecessor-version":[{"id":11967,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/posts\/6482\/revisions\/11967"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/media\/6483"}],"wp:attachment":[{"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/media?parent=6482"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/categories?post=6482"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/tags?post=6482"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}