The Best Cryptocurrency Exchanges Reviewed
Last Updated March 11, 2018
Imagine this scenario. You are an investor walking into your money manager, Dan’s, office. You sit down, exchange pleasantries, and then, get to the heart of the matter, “Dan,” you say, “I want to transfer every single dollar I’ve got and I want you to put it all into Tesla stock. I have a really good feeling about what Elon Musk is doing with the company.”
“All your stocks?” He asks, floored.
“Not just the stocks, everything; the house, the car, the savings, the 401k.”
“Your kid’s college funds?”
“Yup, even those. Didn’t you see, he landed his Space-X rocket recently.”
“You can’t be serious.”
“Of course I am! The man’s a genius and my money will be in good hands”
Now, discounting the dishonest brokers who would likely jump at the chance of a huge commission, what do you think any broker worth their salt would say? If they were honest, they would call you an idiot. If they were less honest, they would caution you to reconsider, to not be so rash. Likely there would be some mention of ‘putting all your eggs into one basket.’
Experienced investors know that the key to a healthy, growing, long-term portfolio is diversification. Neither you, nor any expert, can possibly foresee all possible marketplace trends, so it behooves you to protect yourself and spread out your wealth as a form of potential loss mitigation. This is true, not only for stocks portfolios, but for wealth in general. It is wise, if possible, to have holdings in precious metals, property, cash, goods, etc; the most recent addition to this list of common investment assets is cryptocurrencies.
As digital currencies have not simply emerged, but practically exploded into the financial mainstream, hundreds of thousands of people are now frantically entering into the cryptocurrency market. As more and more cryptocurrencies hit the virtual marketplace, crypto investors naturally desired a way to diversify a portfolio, or to quickly move investment in one coin to another token. In order to answer this need, a whole host of Cryptocurrency exchanges have popped up offering a wide array of services. Just like with the stock exchange, these exchanges serve as marketplaces for the facilitation of buying, selling, trading all types of coins for alternate coins or fiat currencies. Below we will discuss several of the crypto exchanges and weigh their pros and cons.
Cryptos can be seen a digital cryptographically secured version of gold, silver, platinum or any other type of rare precious metal. Like them, cryptocurrencies can only be obtained in one of two ways: either you mined it, or you purchased it off someone who had mined it at some point in time. Since it is extremely difficult to set up an actual digital mining operation, your best bet for entering the coin market would be by fiat exchange.
Three Types of Exchanges
- Traditional Cryptocurrency Trading Platforms: Such websites connect the seller to the buyer and act as the middleman in the exchange. Like the stock market, buyers and sellers trade based on current market price for cryptos. During these exchanges, the trading platform takes a fee or a cut from each transaction. Some platforms may give the option to convert directly to fiat currency and vice versa based on market price.
- Direct Trading Exchanges: These platforms host direct peer-to-peer trading between buyers and sellers. In these exchanges traders do not use a fixed market price, but rather, set their own buy or sell prices. While they eliminate the middleman, they do significantly increase the chances for fraud.
- Cryptocurrency Brokers: Similar to foreign exchange dealers, these exchange brokerage sites are open to the public and easy to use. The broker sets the price and anyone can visit and buy cryptocurrencies at that price. These can be convenient services, but generally come with higher fees and a larger variance in buy and sell rates.
Know what to look for in an exchange
It should be no surprise that there are a variety of services all claiming that they are the best service for you. Now, obviously that cannot be true for all of them. Each company has its own pros and cons. Therefore, it is vital you do your research before you commence trading. Below are some important things to consider before making that initial trade:
- Reputation – The optimal means to discover the ins and outs of an exchange is to read reviews from individual users as well as industry websites or industry experts. Internet forums like BitcoinTalk, or Reddit’s subreddits such as r/cryptocurrency, r/CryptoMarkets, or r/Bitcoin are fantastic means by which you can discover information and advice from others who have used these exchanges. In these forums you can ask specific questions and get honest answers that you might not get from the exchange’s website.
- Payment Methods – What payment systems are offered on the exchange? Do they take credit card and debit card? Paypal? A wire transfer? If there are limitations to payment options that might be a sever inconvenience. If you do use a credit card, that generally requires a form of identification verification, which leaves you more susceptible to fraud and higher fees. Also remember that if you wish to use a wire transfer that will take as long as the time needed for banks to process the transfer.
- Customer Support – Bad customer support can make or break a relationship with a company. It is important, especially in affairs where large amounts of money may be at stake, that you have the ability to communicate with someone at the company for any concern you might have. Occasionally, you might face issues like a failed deposit or withdrawal and you need to get someone on the line right away. When researching a company’s reputation, this should be very high up on the list.
- Fees – The vast majority of exchanges have their specific fees on their website. Prior to signing up, be sure to research the fees for deposits, transactions, and withdrawals. In regards to trading fees, a good rule of thumb is anything below .025% takers fee and .01% makers fee is a fantastic rate, anything above those numbers should raise eyebrows and cause you to reconsider.
- Exchange Rates– Be sure to shop around and price out exchange rates. There can be a large variance, up to 10%, in exchange rates between sites, so if you shop around for rates, you can potentially save yourself a lot of money.
- Liquidity – Make sure that the exchange you use has high liquidity, or how readily your coin can be converted into an alt coin or into fiat currency. In other words, when can your coin be bought or sold at the fair market price. Liquidity implies that there are no bells or whistles attached during the buying or selling, no discounts or premiums that would make it difficult to immediately sell the asset for what it is worth.
- I.D. Verification – Most platforms that trade Bitcoin in either the U.S. or Europe necessitate ID verification for withdrawals and deposits, although there are some exchanges that allow for anonymity. The extra time consumed by this process is for your and other traders benefits; it protects you and the exchange from fraud, scams and money laundering activities.
- Location Restrictions – Some specific user functions offered by exchanges are only accessible from certain countries. Make sure the exchange you want to join allows full access to all platform tools and functions in the country you currently live in.
Best Cryptocurrency Exchanges
Now that we have gone over the types of exchange and what to look for when shopping around for an exchange, we will examine several exchanges and weigh their pros and cons.
Although it is not really a marketplace, Coinbase is a fantastic entry point to exchange traditional currency for cryptocurrency. “Founded in June of 2012, Coinbase is a digital currency wallet and platform where merchants and consumers can transact with new digital currencies like Bitcoin, Ethereum, and Litecoin. We’re based in San Francisco, California. Bitcoin is the world’s most widely used alternative currency with a total market cap of over $100 billion. The Bitcoin network is made up of thousands of computers run by individuals all over the world.”
Coinbase has quickly become on the of the most popular trading platforms in the world, much in part due to the confidence afforded it by being funded by dependable investors, and utilized by brokers and more than 8 million users in 32 separate countries. It is considered one of the easiest entryways for newcomers to acquire their first coins. They allow the purchase of Bitcoins, Etherium and Litecoin and transactions can be made via major credit cards, EFT payment, SWIFT/SEPA/ACH transfers and PayPal.
The Coinbase platform is intuitive and makes it easy to safely and securely buy, sell, trade, use, and store digital currency through their digital wallet. Transactions can be made via computer or through their Android or IOS app.
For the more experienced technical trader, Coinbase also provides users with access to their subsidiary GDAX (Global Digital Asset Exchange) and does not charge any fees to move funds between a Coinbase account and a GDAX account.
- Sterling reputation – Coinbase is backed by trusted investors and used by millions.
- Security – It has been heavily regulated and is a trusted exchange. They put an emphasis on protecting you and their other users. Your Bitcoins are also insurable, protecting you from any sort of security breach or hack.
- Reasonable Fees – Compared to many exchanges, Coinbase has very sensible fees.
- Ease of use – As mentioned, it is a great entry point into Cryptos and is very beginner friendly.
- Customer Support – If you peruse any of the crypto subreddits you will likely see stories of users who had their accounts frozen by Coinbase. There have been mixed reviews regarding their customer support, so, while the vast majority of users have encountered no issues, some have been left jaded by the experience.
- Limited countries supported – While 32 countries are supported, Coinbase does not operate with uniform services globally. India, for example is not covered.
- Tracking – Coinbase does keep track of how you spend your coins. So, if you are using your money for illicit activities, your account is susceptible to being frozen. Realistically though, you should not be using your money for ill gains anyways, so don’t be an idiot.
Coinmama has been operating as a broker platform for years now, which makes it a veteran of the exchange markets. Many view it as a viable alternative to Coinbase. Using Coinmama, anyone can visit and buy BTC or Ehterium via credit card or cash. It is a great way of purchasing coins, especially if you are using local currency. It should be noted that the features of the site do not work everywhere globally in the same manner. That said, they do support more than 226 countries world wide.
- Beginner Friendly –Easy to use and quickly purchase coins.
- Good Reputation – They have a solid reputation for security and ease of use.
- Fast– Transaction times are very fast, allowing you the ability to get going right away.
- High Exchange Rates– The company charges a 5.5% transaction fee for each purchase. If buying with a credit card, there is an additional 5% fee assessed by Simplex, Coinmama’s credit card processor.
- No bitcoin sell function – You are limited to purchasing coins via coinmama.
- Customer Support – Reviews of customer support are relatively mixed.
Binance is a Hong Kong based exchange that was creaded in 2017. Although it is relatively new, it has quickly become one of the most popular and beloved exchanges on the market. Since it is registered outside of China, it is not subject to the cryptocurrency ban in the country. Binance is known for its very low transaction fee of .01%, much in part, due to the fact that the company was partially funded by their own ICO. Binance is unique in that it features an incubator intended to help other pre-ICO blockchain startups realize their objectives.
There is no fiat support, so you will need to buy Bitcoin, Ehterium, or Tether elsewhere and transfer that to your Binance account. From there, you have the option to buy or sell a multitude of altcoins. It provides user with a basic and advanced user interface. The basic view is fantastic for those getting started; the advanced view allows you to utilize additional features and toolsand the ability to analyze trends.
- Fees – Binance has the lowest fees of any big exchange on the market at .01% with an additional 50% off for your first year of trading.
- Basic and Advanced UI – Both UIs are fantastic and offer a variety of tools suitable to novices or long time investors.
- High Liquidity – Transactions occur nearly instantaneously, withdrawals, deposits, buys and sells take place within 5 minutes, allowing you to move quickly.
- IOS and Android App – The Binance app is a thing of beauty and works seamlessly, allowing you to trade anywhere at any time.
- Bounty and reward programs for the community – Offer free giveaways and ability to earn rewards through participating in various competitions.
- Support for alt coins – Nearly 100 cryptocurrencies are available to be purchased.
- Uncertainty with China- It is unclear how the most recent regulatory decisions by China regarding cryptos will impact Binance.
- Two factor identification – A Chinese phone number is required for two-factor authentication, but you can not trade if you are in China…
- Data Collection – Binance collects and stores user data, IP addresses, etc.
*Note: Bittrex have not been accepting new users as of late, but we will update you when that changes
Bittrex is another U.S. based exchange, but is used all over the world. They place a large emphasis on supporting as many altcoins as possible (including those emerging ones). At the moment, they support nearly 200 coins, but have higher than usual fees because of that variety.
They offer 3 types of accounts:
- Unverified – daily allowance of 1BTC withdrawal, no know your customer verification required.
- Basic Account – daily allowance of 3 BTC withdrawal, must verify with know your customer.
- Advanced Account – Daily allowance of 100 BTC withdrawal, must verify with know your customer.
- Altcoin Emphasis – Bittrex offers the largest assortment of coin exchanges in one place, which is great for traders who are looking for access to as many altcoins as are available.
- Advanced Trading Charts – provides extensive information with a variety of features in order to help you, especially helpful for the experienced trader.
- Security – KYC compliant, verification is constantly required and as a result, 0 breaches in more than 4 years of operation.
- High Transaction Fees – Bittrex have way higher fees than its competitors. Currently, it is .25% on all trades.
- Customer Support – User reports state that customer support was slow to respond to complaints or issues.
Changelly is unique in that it is more similar to a brokerage type crypto exchange, in that, it is simple to sign up and use. It eschews Know Your Customer compliance and only requires an email in order for you to start trading in Cryptos. Changelly places an emphasis on ease of use, so the site and interface is extremely intuitive and beautifully designed.
- Ease of Use – If you do not want all the bells and whistles or are a novice, Changelly is probably the easiest exchange to navigate and immediately start trading.
- Wallet to Wallet Exchanges – Changelly is unique from most exchanges in that crypto exchanges go directly from and go directly to your digital wallet, for which you have the key. This ensures extreme security and safety from breaches or hacks.
- High Transaction Fees- Changelly requires .5% trading fees, which is exorbitantly higher than most other forms of exchange.
- Limited Altcoin Availability – While they carry the major altcoins, if you are looking for a variety, Changelly is not for you.
- Speed – Transactions do not occur instantaneously in real time, generally they take somewhere between ten and thirty minutes.
Based in New Zealand, Cryptopia is a centralized exchange that focuses on cheap altcoins, in a way it is similar to a penny stock exchange. Cryptopia allows for a variety of means by which coins may be purchased, including fiat wire transfers (if you are a New Zelander).
- Altcoin market- Cryptopia hosts more than 400 altcoins that are available for trading.
- Speed – Deposits and withdrawals can take some time, some users complained that deposits took up to an hour.
- Fees – Depending on the altcoin, some of the coins have extremely high withdrawal fees.
- Charts – For having so much availability, their trading charts are awfully designed and not intuitive at all. Be sure to do thorough research outside of Cryptopia when making exchanges.
Gate.io, is a relatively young exchange that was started in the U.S. The platform allows for the trading of more than 20 cryptos with very good fees. Gate.io does not provide fiat currency purchases against digital coins, but only allows the trading of cryptos for altcoins. The Digital coins on Gate.Io are paired with USDT (United States Dollar Tethers)which issues tethers, a pegged cryptocurrency that is directly tied to that of U.S. dollar with the goal of keeping the price ratio at 1:1.
Its support is limited to blockchain transfers in the cryptos that are being traded, so it may not be ideal for all investors. There are no minimum depostits and a resonable .2% fee is tacked onto all trades. Deposits free, withdrawals, however are charged with fees that vary by coin.
- Competitive Fees – The fees are at a solid, respectable level in comparison to their competitors
- Decent UI – the UI is seamless and intuitive, the mobile App supports both IOS and Android
- More than 20 coins available including: Bitcoin, Ethereum, Ripple, Qtum, OmiseGo, Zcash, Doge, LiteCoin, Dash, EOS Bat, etc.
- No Fiat – Lack of fiat transfers means you need to first obtain coins by other means.
- Unregulated – although the website is based in Virginia, it is not overseen by local financial watchdogs, nor does it hold a NY BitLicense.
- New Company – Since it is new, there are still errors and bugs that need to be worked out. *Note: Some reviews claim that it is a scam.
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