In recent years, we tend to witness daily successes of one sort or the other through the world of cryptocurrencies. Though, the overwhelming rate of growth in this market led to the explosion of several questions in the minds of users. Questions such as: where you can trade Bitcoin (BTC), where you can buy cryptocurrency, and what to look out for before joining any of the numerous cryptocurrency exchanges, are at the forefront of people’s minds.
There are two major types of exchanges in the world of cryptocurrency. The fiat exchange, which permits the direct transfer of government-backed money such as Euros, US Dollar – to cryptocurrency. The second is the cryptocurrency to cryptocurrency exchange which allows you to trade cryptocurrencies with each other.
You need to use certain exchanges to get your cryptocurrency depending on what your preference is. Though, you need to use both exchanges to get most cryptocurrencies.
Cryptocurrency Exchange: What Does It Mean?
A cryptocurrency exchange is a platform or a website that allows you to buy, sell, trade or even exchange cryptocurrencies for other cryptocurrencies or conventional money such as US dollars. The major aim of an exchange is to provide fair and equal opportunity for anyone to invest in the market.
So, if you want to trade professionally on the cryptocurrency exchange, you will need the trading platform specifically designed for institutions and full-time traders. Likewise, there are exchanges designed to serve beginner traders who are new to the world of cryptocurrency trading.
Exchanges make the profits through the small fees they charge on transactions that happen on their websites. Many cryptocurrency exchanges exist out there and many more are coming up as the crypto-ecosystem grows. So, how can you find the best exchange out of these endless options?
The Makeup of a Good Cryptocurrency Exchange
Joining a cryptocurrency exchange is very easy, but it is very important to do some background checks before you join one and start trading. Here are a few factors you should consider before looking for a cryptocurrency exchange that will match your needs.
Reputation and Security
The most obvious of the factors that go into a good exchange is reputation and security. The best way to do this is to search on the internet through the reviews of individuals and institutions that have really used the platform. You can dig out more important and relevant facts from forums.
You need to determine how much it will cost you to make deposits, trade, and withdraw funds. Also, the rate at which you buy or sell cryptocurrency from beginning to end is quite important. So, before joining any exchange, ensure you know your payment method and the currency pairs you want to use.
Method of Payment
The more payment options an exchange has, the more convenient it will be to use. It is very important that your exchange provides deposit and withdrawal options that match your preference. Most of the exchanges provide the opportunity for you to fund your account using PayPal, credit card, debit card, or bank card. It is your job to discover this hidden information.
Ease of Access
Accessing your trading account requires that you perform your transactions on a web-based browser, mobile, or desktop trading app for convenience. So, you must know how user-friendly the platform’s app is before embarking on its usage.
There are limits to the amount of money you can deposit in your trading account or the amount of digital currency you can buy or sell in a transaction in a day. It would be wise if you can check to know whether there are limitations to how much you can withdraw from your account. Most times, maximum and minimum limits do exist. Always check to know the one that is suitable for the size of trade you want to place.
Types of Cryptocurrency Exchange
The crypto-exchange refers to different cryptocurrency trading websites including:
- Brokers – These are platforms that you can go to and buy digital currencies at a rate set by the broker. This is comparable to a foreign exchange in the traditional stock market.
- Trading Websites – This is a platform that connects the buyer and seller together giving them the opportunity to pay a lower fee for each transaction.
- Direct/peer-to-peer trading – This is a trading site that offers direct peer-to peer-trading. Individuals from different countries buy and sell digital currencies with a high level of anonymity and it offers more control over how you trade.
Top Tier Cryptocurrency Exchanges
Currently, there are dozens of cryptocurrency platforms to choose from. How can you find the best and the most suitable one for your needs? Here are the top-performing platforms for you based on some criteria such as user-friendliness, fees, security, and all the rest.
Coinbase is among the most popular and trusted exchanges in the world. A lot of reliable investors and users in the world have really adopted and embraced it. Currently, their platform supports only 32 countries in North America, Canada, Europe, Australia, the United Kingdom, and only Singapore in Asia.
The Coinbase platform is user-friendly, especially to beginners, and has become the number one choice for conventional crypto-investors who want to grasp Bitcoin. Only a few coins such as Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH), and Ethereum (ETH) are currently available. You can make payments with a credit card (with a higher transaction fee) or an authorized bank account.
Global Digital Asset Exchange (GDAX), a subsidiary of Coinbase works as a conventional exchange providing a real-time marketplace for trading and storing the four coins mentioned above. GDAX, which has been recently rebranded as Coinbase Pro. It offers traders the opportunity to exchange their Bitcoin for other coins, such as trading of Ethereum for Bitcoin and vice versa.
Currently, there are no fees for moving currencies from Coinbase to GDAX as they are partner platforms. Among the many shortfalls of Coinbase are the limited payment methods and potentially poor customer support.
This is a Canadian-owned and based cryptocurrency exchange that is on a mission to provide convenient, reliable, and secure access to Bitcoin and other cryptocurrencies. The company has many good features such as ease of use, good customer support, and fast turnaround times for both deposits and withdrawals.
Bitbuy.ca is one of Canadian’s fast-growing cryptocurrency exchanges which caters to both beginners and experienced investors. It is a great choice for users who want to buy and hold cryptocurrency. Bitbuy.ca is favorable to those who want a trusted way to turn their fiat money into cryptocurrency quickly and with ease.
It is, however, available to Canadians only and only covers coins such as Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. The company processes CAD deposits and withdrawals quickly.
Poloniex is yet another of the most popular crypto-exchanges globally that have become a reliable choice for investors looking for a good selection of cryptocurrencies. It has the major advantage of trading on a margin, which gives experienced traders the choice to short coins.
This is a feature that is rare to find in present cryptocurrency exchanges although there are many coins available for margin trading. The Poloniex user interface provides much useful information despite the fact that it does not provide many tools for technical analysis. It is not great for investors looking for access to the largest number of cryptocurrencies.
Coinsquare maintains the highest safety standard as it is powerfully built on the same technology as the New York Stock Exchange. This means that your money is safe at the end of the day. They have passed through a series of tests such as stress and DDoS tests and have not lost a single coin. This is incredible!
The Coinsquare platform has a tool that keeps track of all the altcoins at any point in time. The following features make Coinsquare stand out from the crowd: good reputation, beginner-friendly, moderate fees, and top-notch security.
However, Coinsquare is not operational in certain countries and has limited payment options.
Cex.io has its headquarters in London. It provides security, cross-platform trading, as well as high liquidity rate. With almost 100% up-time and margin trading, Cex.io seems to charge a small fee in the first instance. Though, they charge a premium on the price of Bitcoin.
Therefore, when you purchase Bitcoin from their platform, you are paying more for the actual money when compared to the rate offered by other exchanges. It has more than 2 million accounts and many cryptocurrencies for sale.
Cex.io offers a brokerage service which helps beginners trade in a very simple way and to buy Bitcoin at lower prices. They have very strict verification rules and their fees vary with the payment method.
The list of reputable cryptocurrency exchanges seems inexhaustible and many more are cropping up. However, the major purpose of a cryptocurrency exchange is to allow the users to trade cryptocurrency listed on the exchange. Factor in your residence, which cryptocurrency are you interested in the most, user interface, and payment method to determine which one would suit you the most. To do that, it’s best to visit all the listed exchanges.
This article should not be taken as, and is not intended to provide, investment advice. Users are ultimately responsible for the investment decisions he/she/it makes based on this information. It is your responsibility to review, analyze and verify any content/information before relying on them. Trading is a highly risky activity. Do consult your financial adviser before making any decision. Please conduct your thorough research before investing in any cryptocurrency and read our full disclaimer.
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