A cryptocurrency exchange is a marketplace where you can trade cryptocurrencies for another digital asset or fiat currency. Basically, cryptocurrency exchanges assist investors to sell their coins swiftly in an effective manner. The market has different cryptocurrency exchanges and navigating and settling on the right platform can be hard. However, there are factors to consider before opening an account with any exchange. The exchange should meet your needs and requirements.
What to Know Before Choosing an Exchange
Fees: We have different types of fees charged by cryptocurrency exchanges. You should settle on an exchange that charges low deposit and withdrawal fees. Most reputable exchanges usually charge a fee that does not exceed 0.25%. Note that fees differ across various exchange platforms. Also, look out for exchanges with discounted fees.
Reputation: Look at the reviews by other users to determine the strength of an exchange in the market. Reviews will give you a rough idea about the direction of an exchange. All reviews are important because they are based on factors like liquidity and security. Furthermore, look at the exchange’s online community. Monitor the type of conversation, the number of people in the community and any complaints being raised. Go for an exchange that has positive feedback from users.
Liquidity: Liquidity simply means the degree to which a particular asset can be quickly bought or sold without altering the general stability of its price. Join an exchange with higher liquidity since it guarantees market stability of the exchange. Higher liquidity means that you will have access to quicker transaction times. Additionally, with high liquidity, every user will access fair prices. Note that liquidity is affected by factors like trading volume and regulations.
Security: Your platform of choice should have solid security measures to protect your funds. Any exchange should have basic security features like two-factor authentication, username, password, and extra security keys. Measures such as e-mail encryption with OpenPGP or U2F is a bonus. Also, look at the history of the exchange for any notable security breaches.
Other factors include user interface and supported cryptocurrencies.Its important to know what are the best cryptocurrency brokers to project yourself, your funds and make sure you’re investing your hard earned cash right.
Here are some of the reputable exchanges you can choose from.
Binance is a leading crypto exchange offering competitive rates with a market cap of $133,856,269,432. The platform supports more than 100 coins. The exchange has a positive reputation in the market from its global pool of users. The platform’s users can choose between basic and advanced trading interfaces. The latter is quick and mostly meant for newcomers. The advanced trading interface is meant for experienced investors. It is more complex.
Binance offers crypto-to-crypto trading. Recently, Binance launched new fiat to crypto exchange in Jersey. The exchange offers trading options in Bitcoin, Ether, BNB trading pairs. Notably, the exchange supports over 100 coins like Ripple and Bitcoin Cash. Binance offers a flat rate of 0.1% for traders who don’t need instant fiat liquidation. Additionally, BNB offers a 25% discount on trade fee when working with the coin. Deposits are free. Withdrawal fees are always updated on a regular basis. Binance only has limits on withdrawals.
From the security aspect, Binance deploys the CCSS and ISO/ICO security protocols. We also have the Google Authenticator and 2FA to verify withdrawals and security modifications. Additionally, the exchange does not store user data.
Despite, the large customer base, Binance customer service is very responsive. On the downside, the inconsistent withdrawal fees might turn off some people.
Coinbase Pro is a product of Coinbase. The exchange has features meant for advanced traders. It comes with detailed charts, graph, and different trading options. Coinbase Pro was designed for individual traders but not institutions.
Supported assets on Coinbase pro depend on regulations of different regions. Even though users can view the order book they can only exchange pairs allowed in their regions. Popular trading pairs include ETH/BTC, LTC/BTC, and BCH/BTC. US traders have access to BTC/USD, ETH/BTC, ETH/USD, LTC/BTC, LTC/USD, BCH/BTC, and BCH/USD.
On fees, Coinbase Pro deploys the maker-taker model. Maker traders do not pay anything. However, taker orders are done at market price and filled at once. Note that an order can be divided into multiple orders that include a maker order and a taker order. For a pricing tier of up to $10 million, the taker fee is 0.3%. Put in mind that Coinbase Pro has an option of instantly transferring funds to Coinbase account.
To guarantee the safety of assets, Coinbase stores 98 percent of customer funds offline. Furthermore Coinbase Pro distributes assets geographically around the world in vaults and safe deposit boxes. All customer funds on Coinbase Pro are insured.
Huobi is an advanced digital currency trading platform. The platform aims to provide investors with professional and safe trading services. The platform is available on Windows and Mac operating systems as well as through iOS and Android trading apps with 24/365 customer service support.
With Huobi, you can buy and sell more than 190 cryptocurrency pairs. Exchanging on Huobi attracts a maker fee and taker fee at 0.2%. VIP users can access discounts on fees.
On the security aspect, Huobi deploys the two-factor authentication model. For your account to be fully verified, you need to provide a photo of your passport. The platform provides a decentralized structure and anti-DDoS protection system, with more than 98% of its digital assets stored in multi-signature cold wallets.
Kraken is a reputable cryptocurrency exchange known for providing easy and secure digital trading. The platform transformed from a Bitcoin-only exchange to the most sought-after exchange. The platform offers services like support for leverage trading. The exchange has remained stable over the years.
Kraken supports a number of trading pairs like XBT/USD, BCH, ETH/XBT, DASH, XBT, GNO, MLN, REP, XLM, ZEC, XMR, and ERP. With the platform, you can deposit or withdraw assets in Canadian dollars, British pounds, Japanese yen, and euros. Unlike other exchanges, Kraken charges both the taker and maker fees depending on the volume. Main trading pairs attract a fee of 0.1-0.35%. We also have 0% of fees for traders offering liquidity. Withdrawals and deposits are determined by the method. In general fees are 0.19% with a $20 minimum.
To fight phishing attacks, Kraken uses SSL certificates and the two-factor authentication feature. Furthermore, Kraken allows users to encrypt their email communication. If your email is PGP (pretty good privacy) enabled, Kraken allows you to insert the PGP key in the account setting.
On the downside, the exchange fees are high, especially when making fiat transactions. Additionally, the customer care service is slow to due to lack of phone support.
Bitstamp is among the oldest exchanges serving different global customers. The exchange serves both beginners and advanced traders through a user-friendly, and advanced, trading platform. However, Bitstamp provides a limited range of asset compared to other platforms. You can trade in digital currencies like Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ripple (XRP). All of these can be traded against Bitcoin or fiats like the Euro (EUR) and US Dollar.
Bitstamp attracts relatively low fees. Deposits are charged at 0.05% with a minimum of 7.50USD on the international wire. International wire withdrawals accrue a .09% fee and a minimum of 50 USD/EUR.
The exchange’s stability in the market has been credited to its strict adherence to regulations meaning that security measures are top notch. To retain assets in case of a hack, Bitstamp stores all digital currencies into a cold wallet, while its online assets are hosted on Amazon Web Services. All US Dollar Accounts are insured by the FDIC, while funds are held in a New York-chartered bank. Furthermore, the exchange has an active customer service where users can air their queries through email and phone calls. Feedback is provided within hours.
The goal of joining a cryptocurrency exchange is to make money. However, you need a guarantee that your needs will be met. Always research before joining any exchange since all crypto investments are a great risk. You should consider the highlighted exchanges becuase they have a good track record.
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