With a myriad of cryptocurrency exchanges on the market, finding the best exchange to handle your needs can be the second big decision after the resolution to plunge into the world of cryptocurrencies.
It’s normal for first time users to be overwhelmed with a flood of elegant promises from different exchanges and this often lead to inappropriate choices which later on translate to unsatisfactory experiences or even loss of significant amounts of assets. This guide aims to explore the critical points you need to know before choosing anything on the market, as well as a brief outlook on the best cryptocurrency exchanges in existence today.
What is a cryptocurrency exchange?
Before burying ourselves into the ins and outs of crypto exchanges, let’s set off on a few baby steps by considering what the phrase “ cryptocurrency exchange “ is all about. In basic terms, cryptocurrency exchanges are platforms (mostly online) where you can buy or sell cryptocurrencies for fiat or other digital currencies.
They are more like forex markets of the digital world where you can exchange currencies except that they focus on trading the relatively new and exciting digital currencies. Through exchanges, most people with a basic internet connection and a few Dollars, Euros, Pounds, Korean Wong and even Japanese Yen in their bank account or credit cards can buy a few Bitcoins or other cryptos.
By providing an incredibly practical way for people to get involved in digital currencies, exchanges are an essential part of the increasingly growing influence of digital currencies. Based on the nature of operation, a number of types exist to cater for a variety of traders’ tastes.
These include private digital currency exchanges which focus on traders who need a little more exclusive treatment and can only get people on board through invites. Others are generally available to the public though they may have some location restrictions whereas others are designed to facilitate physical transactions or even chat functionalities such as Telegram.
How to choose the best cryptocurrency exchange?
Getting your grip on the best exchange for your needs involves awareness of a number of factors that are central to the best exchanges on the market today. Let’s have a few moments to ponder on each factor.
As you would expect, using cryptocurrency exchanges is attached to fees related to different types of transactions. Key transactions include deposits from a wallet or another exchange, buying, selling and withdrawing your assets. These costs can differ markedly across the board therefore it is logical to have a clear idea on what’s involved before signing up for an exchange that’s way beyond the limits of your budget.
The word “Volume” in this context refers to the amount of digital assets traded in a particular period of time. This can be expressed in terms of daily volumes or over a longer period such as a week, month or a year.
In other words, it indicates how much of activity is taking place at a particular exchange. It is a fairly good measure of how trustworthy and reliable that cryptocurrency exchange is, thus defining and comparing an exchange with its competitors is often a prudent step.
According to various commentators and financial experts, it is one of the most important and yet simple tools that harbor the potential to increase profitability and minimize risks during trading. However it is also important to note that those exchanges which have been around for a longer time tend to have bigger figures in terms of volume due to the time advantage they have.
Relatively newer exchanges can be good enough though they have lower daily volumes thus necessitating a more research which looks at multiple factors before making any choices.
Number of accepted cryptocurrencies
You surely don’t want to be in a situation where you spend some precious minutes signing up for an exchange only to find out it doesn’t support the digital currency of your choice, or doesn’t have a lot of options for diversification of your investment.
For this reason, checking the supported number and types of cryptocurrencies is a crucial step towards satisfying your needs. This can be done through accessing the homepages for any information relating to this or through various independent reviews on the exchanges service.
Payment types accepted
This is quite a crucial factor to understand especially when you are a first time buyer of a digital currency. Not all exchanges are capable of letting you buy a digital currency with your credit or debit card.
Some exchanges only allow you to buy cryptocurrencies with preexisting digital assets from other exchanges or wallets. If you are new to the world of exchanges and are considering payment with your card or bank account, it is important to make sure that your choice has a provision for a way of effectively acquiring your assets.
While some exchanges provide a reach that is wide enough to get anyone under the sun involved, some are limited to particular regions, states or countries. Therefore, it is important to check for availability of the service in your location before being carried away with any exciting delicacies in the exchange’s menu book.
Any exchange that is void of a comprehensive strategy to protect your funds should be avoided. The truth is that by virtue of being online entities, exchanges can be exploited by sophisticated hackers thus your funds are not essentially 100 per cent safe.
This means that any good exchange should spend a great deal of effort to provide all the measures it can get to harness its security system. Always look at the security profile and see if there are any advanced security features such as 2 factor authentication and other more sophisticate measures.
List of the best cryptocurrency exchanges.
Having considered the key factors behind the typical excellent good choice of a crypto exchange, let’s move on to plunge into the world of exchanges and look at some of the highly esteemed exchanges today.
Binance presents one of the most popular (if not the most) exchanges on the blockhain technology landscape to date. The platform is a product of the ingenuity of two brilliant Chinese computer Scientists by the names, Changpeng Zhao and Yi He.
With just under 1 and a half year since the idea started to take its form through a successful initial coin offering, the platform has grown to become the world’s largest exchange based on daily trading volume which is currently at $538.52M.
The exchange also offers its own cryptocurrency known as the Binance coin (BNB) which can be used for trading as a well as reducing the cost of transactions
Why Binance is one of the best cryptocurrency exchanges?
Let’s skip the details (which you can easily find in our comprehensive guide on Binance), and get straight to the points being fetched by the stern question above?
- By virtue of being the largest exchange by volume, the cryptocurrency stands as one of the most trusted exchanges at a global scale. The exchange doesn’t harbor any history relating to hacks thus giving testimony of the effectiveness of its security system.
- Binance’s exchange and withdrawal fees are one of the lowest if you compare with most exchanges on the market. The platform also provides you a chance to lower the fees further by 50% if you are using the native coin (BnB).
- The platform supports a huge number of cryptocurrencies making it ideal for traders who would like to diversify their investment in multiple cryptocurrencies.
- The platforms efficiency in completing transactions also stands as one of the fastest. Both withdrawals and deposits take a few minutes with instant intra-platform trades.
- The interface also provides an aesthetic platform that is easy to navigate without the need for extra classes for the beginner.
- Another point worth noting is that the platform does not need you to verify your account to get started. Verifications are required if you are expecting withdrawals of more than 2 BTC in a single day.
Negative points of binance
The lack of Fiat to digital currency conversion is perhaps the major shortfall of the exchange. If you are intending to use your bank account or credit card to buy crypto, this may not be an ideal platform unless you sign up for another exchange first.
Okex is a perpetual competitor to Binance due to a number of features that set the bar very high for most exchanges. It is currently placed on the second position with a daily trading volume of $538.52. The exchange was established in 2014 in China before moving to Malta in search of a more conducive crypto environment just like Binance. The platform allows fiat to crypto conversions and cryptocurrency derivatives which average a $1.5 Billion on a daily basis.
Why is OKex one of the best cryptocurrency exchanges?
- The exchange offers relatively easier fiat to crypto trading through its C2C trading system. The system allows users to trade directly in a well-controlled and safe environment. This is quite advantageous as it provides a faster and easier way to acquire the two types of currencies without having to leave the platform.
- The exchange provides standard protection security and safety measures consistent with most of the leading exchanges across the board.
- Efficient transactions.
- Allows for futures trading which is something most exchanges are yet to live up to.
- The exchange allows for reasonable fees for both crypto and futures trading. Like in Binance, the holders of the exchanges token have access to decreased service fees. The exchange also offers 50 percent of its service fees collected to token holders each week.
Negative points of OKex
- Beginners may need some time to get used to the platform.
- Some countries are restricted from the exchange. These include the US, Malaysia, Hong Kong, Cuba etc.
Huobi is another exchange that has been enjoying constant growth since its establishment in 2013. It is headquartered in Singapore and has other centers in Japan, Hong Kong, Korea and the US. It has worked its way to the fifth position in terms of trading volume which is currently placed at $291.1 million alongside a corresponding market volume of 281.
Why Huobi is one of the best cryptocurrency exchanges?
- General user trust and satisfaction: This is proven by the colossal trading figures placing the exchange on a rather impressive 5th position in terms of trading volume. It is also reflected in the generally positive reviews with no serious complaints from both current and former users.
- The exchange provides for fiat to crypto conversions through an OTC service.
- Top notch security system: The exchange has all the essential security ingredients you would expect from a world class cryptocurrency exchange.
- The exchange has a relatively easy interface that is less likely to place a significant barrier for beginners.
- The exchange incorporates margin trading to help professional traders magnify their gains. In general terms, margin trading involves borrowing some funds from the exchange which can then be used to trade.
Negative points of Huobi
Huobi is yet to accept US citizens outside San Francisco, California.
Bitfinex is another Asian based exchange that has been scooping graceful headlines due to an ever increasing adoption rate among crypto investors. The mastermind behind the exchange is Raphael Nicole, and the exchange was launched in 2012 with headquarters in Hong Kong. It currently stands at position 15 by 24-hour trading volume which is currently at $184.77 million.
Why Bitfinex is one of the best cryptocurrency exchanges?
- The platform is able to guarantee high level security by cryptocurrency exchange standards. All the necessary standard measures including 2 factor authentication, U2F and PDP mail encryption are in place to ensure funds security.
- It has a robust coin portfolio for those who are interested in variety.
- The exchange supports fiat to crypto conversions through bank accounts and credit cards.
- It has a provision for reasonable trading and withdrawal fees which are consistent with the most affordable exchanges’ rates.
- It provides a comprehensive trading interface for experienced traders looking for more than just a basic trading experience.
Negative points of Bitfinex
- The interface may have a steeper learning curve for newbies.
Bithumb is one of the oldest exchanges on the list, bringing years of experience and success to current competition. It was established in 2013 by an entity known as BTC Korea with its base in South Korea. It has also grown to achieve colossal trading volumes of $100 million through providing a number of features that attract both individual and institutional investors. South Koreans constitute the exchanges largest proportion of traders, but it is available for users across the globe.
Why Bithump is one of the best cryptocurrency exchanges?
- The exchange brings years of experience with wide adoption on the table.
- Low transaction fees compared to most exchanges.
- User-friendly interface for beginners.
- Enhanced security features.
- Highly efficient trading platform.
Negative points of Bithumb
- Fiat to crypto trading can only be done with the Korean Wong.
- Relatively smaller portfolio in terms of the number of coins supported by the exchange.
Bittrex is one of the older cryptocurrency exchanges established in 2014 with its headquarters in Seattle. The exchange boasts of a clean history in terms of security probably due to the background work done by well-known security experts who were former security engineers at elite companies like Amazon, Microsoft and Blackberry. It currently stands on position 39 based on 24 hour trading volume.
Why Bittrex is one of the best cryptocurrency exchanges?
- Top notch security: The platform possesses superior security measures which are probably the reason for a spotless security and safety history. These include the elastic multistage wallet which is a feature that allows the platform to store almost 90 per cent of its assets offline. Other features include 2 factor authentication and API.
- Highly efficient: The exchange is without doubt one of the fastest and reliable in terms of transaction speeds as well as various updates including prices and balances.
- Supports a huge number of cryptocurrencies: Hundreds of cryptocurrencies provide enough for a wide range of tastes and strategies.
- Fees: Current trading fees are set at 0.25 per cent; which is a fair charge when compared with most exchanges across the board.
Negative points of Bittrex
The exchange’s only provision for a fiat to crypto conversion is for a trader to buy USDT using a bank account. In this case, you need to activate an enhanced account which allows you to transfer a minimum of $10000; which isn’t an ideal option for first time users on a limited budget.
Conclusion about the best cryptocurrency exchanges
Kick-starting your blockchain experience with the best exchange boils down to understanding 7 key aspects associated with exchanges. These include security, fees, trading volumes, eligibility issues, payment methods and the number of cryptocurrencies supported by the exchange.
A good exchange provides a good balance of these aspects according to your circumstances. The list we have compiled above is purposed to give you a foothold based on the available facts and thousands of other peoples or entities experiences.
Remember to invest wisely and all the best as you are exploring the blockchain tech landscape!