The explosion of the cryptocurrency market has created a glut of cryptocurrency and altcoin exchanges. It can be really tough to tell at a glance which exchange protects your privacy, your investments and provides you with the best services. You can easily find a list of cryptocurrency exchanges, but how about what makes one better than another?
Some accept fiat currency, while others do not. Some exchanges partner with numerous wallets, while others use their own. You’ll find exchanges that deal in numerous cryptocurrencies and those that only exchange one or two. Some brokerages and exchanges offer an altcoin exchange while other limit their trades to Bitcoin and Ether. This guide offers a complete look at the cryptocurrency and altcoin exchanges available not just a list of cryptocurrency exchanges.
What Is a Cryptocurrency Exchange?
Best Cryptocurrency Exchange Sites
Types of Cryptocurrency Exchanges
Factors to Consider When Choosing a Cryptocurrency Exchange
How to Get Started With a Cryptocurrency Exchange
What Is a Cryptocurrency Exchange?
Similar to a stock exchange or fiat currency exchange, a cryptocurrency exchange, provides a technical system for the purchase or trade of a cryptocurrency. This type of financial exchange may allow the transfer of other digital assets, as well. The user can buy, sell or trade cryptocurrencies on these financial exchanges which are also referred to as digital currency exchanges (DCEs). Like other financial exchanges, the investor can make a limit order or market order. The brokerage process at the best cryptocurrency exchange sites works just as it does for other financial assets with the exchange fostering transaction and collecting transaction fees.
Best Cryptocurrency Exchange Sites
Finding the best cryptocurrency exchange for your use requires some research not just a list of cryptocurrency exchanges. Although there are copious amounts of brokerages and exchanges, not all of them serve all locations. They also vary by which cryptocurrencies they offer. Here’s our list of the best cryptocurrency exchange sites with extensive reviews so you can study each of the cryptocurrency exchange sites without visiting each to determine which is the best cryptocurrency exchange for you and which is the best exchange for altcoins for you.
Think of Coinbase as the McDonald’s of cryptocurrency exchanges. It is far and away one of the cryptocurrency exchange sites in existence. As of 2019, it has served 5.9 million customers in 33 countries for a total of $6 billion in cryptocurrency trades. Based in San Francisco, CA, It is the “world’s largest Bitcoin broker.” Customers can make purchases using a connected bank account, Single Euro Payments Area (SEPA) transfer, Interac Online and other purchasing options. It offers limited payment methods though when the investor wants to cash out. It offers both high buying limits and high liquidity, plus it is known for its user-friendliness. It provides the most direct method of purchasing Bitcoin available.
Users can conduct instant purchases when they have a credit card registered as a backup funding source. Its’ one downside is that it can track how its users spend their Bitcoin purchases. Moving coin purchases to Global Digital Asset Exchange (GDAX) results in zero transaction fees but transfer to a cold wallet directly does result in a fee which varies on the size of the transaction.
Coinbase Pro offers an unusual, unique feature among cryptocurrency exchanges – it charges no fees for purchases of BTC, Litecoin, Ether, Bitcoin Cash, 0x, Basic Attention Token, and they are adding more tokens regularly. You need a Coinbase account before you can sign up for Coinbase Pro. Both firms are owned by the same parent firm.
Coinbase Pro is for the more experience trader and will find a trading dashboard similar to those on advance stock trading platforms. It is worth it to learn if you conduct frequent trades since you’ll save quite a bit of money with zero transaction fees. It is open to users from Europe, the United Kingdom and the US. Moving money to Coinbase Pro continues the user’s savings since Coinbase Pro also charges zero withdrawal fees.
Kraken provides one of the longest standing and most vast cryptocurrency exchanges, serving more than 190 countries. It has kept its superior reputation by upholding its regulations and providing dependable security making it one of the best cryptocurrency exchange sites.
It, like Coinbase Pro, features a steep learning curve. While it is not the easiest exchange to master, it provides one of the best choices for high-volume trades. It’s geared toward investors with knowledge of order books and order types. It offers low transaction fees on a sliding scale depending on the amount of the transaction. It lowers the fee as the amount of the transaction increases, all the way down to zero percent for 30-volume trades of $10,000,000 or greater. Your first trade will generally carry a transaction fee of 0.16 to 0.26 percent, so long as it falls with $0 to $50,000.
It serves about four million clients with 20 potential cryptocurrencies to trade. Since its founding in 2011, it has handled more than $140 billion in trades. Its high volumes and experience put it among the best altcoin exchange sites.
Malta’s Binance exchange conducted its own initial coin offering (ICO). It continues to experience rapid growth and currently ranks as one of the top ten cryptocurrency exchanges worldwide. Binance lets investors trade in more than 140 altcoins.
Registration requires an email address. Binance gives each registrant 1 QTUM, its currency, as a welcome gift. It offers a Community Coin Per Month, multi-lingual customer service and mobile apps servicing both Android and iOS.
This exchange offers a lower transaction fee than most exchanges, 0.1 percent. It provides a discount for day traders when using the platform’s native currency, Binance Coin (BNB). Payment of your trading fee in BNB further reduces the fee. Saving traders money puts it in the running for best exchange for altcoins.
Changelly makes it simple to get started purchasing or trading cryptocurrency, but it lacks basic Know Your Customer (KYC) and Anti-Money Laundering (AML) checks that more secure exchanges use. It offers essentially no verification or even registration process. Sign up with your email.
Its strong point is the number of cryptocurrencies it offers, currently 35. It also provides cryptocurrencies to exchange with fiat pairs like the US dollar and the Euro. It also connects to other exchanges when you purchase and searches through them to find the best available price for your purchase or sale. Because of this feature to maximize your investment, each transaction takes a total of five to 30 minutes.
Changelly charges a transaction fee of 0.5 percent on each trade. It refers to it as a commission fee though which may cause confusion for those moving to cryptocurrency from trading traditional financial assets. You’ll also pay a miner’s fee from your cryptocurrency balance.
You will need either a VISA or MasterCard or a cryptocurrency Changelly supports to purchase. You’ll also need either a hot or cold wallet to move the purchase into since Changelly does not offer its own wallet. It’s not known for its ease of use for purchases. In fact, it provides step-by-step guides to buying with cryptocurrency or a credit card due to this. It’s owned by CoinSutra.
Bitcoin Mercantile Exchange, BitMEX, a peer-to-peer trading platform, was previously one of the top cryptocurrency exchanges. It offered leveraged contracts in a derivative market. That began changing in late 2018 and the earliest part of 2019. Older discussions of the exchange will reflect its previous high rank as an exchange. In the earliest days of 2019, users began complaining of random account shut downs. It did not occur to those with suspect accounts only, but to respected financial journalists who wrote firsthand of the experience in warnings against using the exchange.
KuCoin provides easy trading via apps for Android and iOS. It does not offer much in the way of security though. You’ll get a quick sign up and numerous cryptocurrencies you can trade. It offers many altcoins including DragonChain and KCS.
It charges a trade fee of 0.1 percent. It does provide discounts when a user pays or holds KCS. This discount begins at one percent per 1000 KCS. KuCoin caps this as a 30 percent discount. Deposits are free. You’re charged for withdrawals. You’ll need BTC or another cryptocurrency to open an account. You also need an email to open an account.
Huobi Pro, founded in China, serves the international community as a cryptocurrency exchange, trading in more than 130 countries. Its main office is in Singapore. It ranks in the top five exchanges according to CoinMarketCap. It offers 244 cryptocurrency pairs putting it in among the best altcoin exchange sites.
It’s known for protecting user privacy. It makes trading on the go easier with apps for Android and iOS. Huobi Pro requires an email, mobile phone and that the user share their country of residence to open a trading account. It offers stop-limit orders like a stock exchange would.
The US cryptocurrency Bittrex offers more than 190 cryptocurrencies to trade. Their location requires significant compliance via the US Securities Exchange Commission. Bittrex offers one of the largest trade volumes of BTC worldwide. It charges a .25 percent service fee.
You can register with just an email, but you need to submit to the KYC process to trade. This includes submitting identification documents and your phone number. You must complete this process before you can withdraw funds. If you want to conducts higher limit trades, you must enable two-factor authentication. It offers basic accounts that allow withdrawals of up to three BTC per day and advanced accounts that allow withdrawals of up to 100 BTC per day. You cannot deposit fiat currency or make purchases with it. Bittrex offers only cryptocurrency-to-cryptocurrency trades.
Bittrex also functions as a learning site for new traders. It provides candlestick charts and crosshairs for monitoring currency rates. It put it all together in an easy to use interface.
European brokage firm, Bitpanda, conducts one of the largest volumes of trades in Europe. You can buy, sell and trade BTC, Litecoin, Ether, Ripple, Bcash and many other altcoins. It charges a one percent transaction fee for purchase using your bank, but a three percent fee for credit card purchases. It offers some payment methods only to Europeans, including SEPA, SOFORT, NETELLER and Skrill. It offers an Android app.
One of Europe’s more secure brokerages, it requires a registration and verification method similar to US exchanges. You’re required to provide a national identification, plus conduct a video verification with a Bitpanda staffer. This is a standard KYC/AML practice in many countries. You can trade using both fiat currencies and cryptocurrency-to-cryptocurrency at Bitpanda. Its flexibility ranks it among the best altcoin exchange sites.
The cryptocurrency exchange Luno serves Europe, South Africa, Nigeria, Malaysia and Indonesia for a total of 40 countries served for a total of more than 2 million customers. It lets Europeans purchase Bitcoin or Ether using SEPA transfer or bank transfer. Users from other nations served can purchase using a local bank transfer.
It offers a website registration. You can use its apps for Android and iOS to conduct trades, as well. Luno goes far beyond a simple exchange by offering cryptocurrency lessons in eight different languages. It offers primers on the Bitcoin and Ethereum platforms and their cryptocurrencies.
Established in 2014, the US- based exchange Poloniex offers more than 100 cryptocurrencies for purchase, sale and trade making it the best exchange for altcoins in the US. It boasts one of the largest trade volumes among worldwide exchanges. In 2017, it ranked as the highest volume ETH exchange. It supports an independent market of Ethereum-based crypto coins, in addition to its BTC market.
To trade on Poloniex, you’ll need to register with your email address and deposit Tether dollars (USDT) which means you’ll need to have an existing account on another exchange before you can purchase. The exchange only provides cryptocurrency-to-cryptocurrency trades, so you can not purchase with fiat currency. It charges a fee of 0.15 to 0.25 percent depending on whether you’re purchasing or selling.
It provides many tools geared toward high volume trading and experienced traders, such as candlestick charts at time scales from five minutes to 24 hours and a stop-limit feature.
Established in 2014 in Hong Kong, Bitfinex offers trades of using 13 cryptocurrencies. Its users can purchase, sell or trade using cryptocurrency or fiat currency. The exchange offers Bcash, Bitcoin, Dash, EOS, Ethereum Classic, Ethereum, IOTA, Litecoin, Monero, OmiseGO, Ripple, Santiment and Zcash.
Its fees can seem quite hefty. For trades using US dollars, the exchange charges a minimum wire fee of at least $20. Otherwise, you’ll need to pay a trade fee of 0.1 to 0.8 percent depending on trade volume. Each withdrawal and deposit also incurs a fee.
Advanced traders can take advantage of features such as fill or kill, stop-limit orders, stop orders, trailing stop and TWAP. The site provides market charts.
Bitfinex requires registration that includes national identification plus verification. The entire process requires 15 to 20 business days from ID submission to validation, so do not expect to sign up and trade the same day. As of January 12, 2018, the exchange requires new registrants to adhere to a put a limit of S10,000 USD or its equivalent in cryptocurrency. Without this the account will not function for purchases. It still offers one of the best cryptocurrency exchange sites, especially for high volume traders. It offers a web version and apps for Android and iOS.
Types of Cryptocurrency Exchanges
Two main types of cryptocurrency exchanges exist. These are:
- fiat exchanges,
- cryptocurrency-to-cryptocurrency exchanges.
A fiat exchange lets the investor purchase, trade or sell a cryptocurrency using a government-backed currency, also called fiat currency. Examples of fiat currency include the US dollar, the Mexican peso and the Japanese yen.
A cryptocurrency-to-cryptocurrency exchange lets the investor purchase, trade or sell a cryptocurrency using other cryptocurrencies. Examples of this include purchasing Ether with Bitcoin or XRP with Ether. This type of exchange is also referred to as an altcoin exchange.
Further differences exist. Investors have three types of platforms from which to choose for making cryptocurrency investments:
- traditional cryptocurrency exchanges,
- cryptocurrency brokers,
- direct trading platforms.
A traditional exchange lets investors buy, sell and trade according to the prevailing market price. Like the New York Stock Exchange or the Tokyo Stock Exchange, but for cryptocurrency, these exchanges act as a middleman for a transaction between a buyer and a seller. A cryptocurrency broker still facilitates a purchase, but the broker determines the price. It usually uses the prevailing market price but adds a fee. The direct trading platform enables peer-to-peer trading. Think of it as the Napster for cryptocurrencies.
Any of these three may allow fiat purchases. Purchasing platforms that allow purchases with fiat may allow you to do so using by linking your bank account, credit card or by loading cash into a digital wallet by some other means. When you make your very first purchase of cryptocurrency, you’ll have to use an exchange that accepts fiat currency because you will not yet own any other cryptocurrency. After that, you can move to using an exchange that accepts cryptocurrencies. The best cryptocurrency exchange provides the type of platform you need and the type of trades you need. It might be one of the top cryptocurrency exchanges or it could be a small altcoin exchange in your home country.
Factors to Consider When Choosing a Cryptocurrency Exchange
Not all exchanges and platforms are created equally. Some protect your investment better than others. Consider the following six factors when choosing the best cryptocurrency exchange or best altcoin exchange to use:
- supported currencies,
- commissions and fees charged,
- payment methods,
- geographic location,
The security offered by a platform and its legitimacy go hand in hand in finance. Many exchanges have been hacked. These hacks can result in massive losses, such as the loss of $31.6 billion in cryptocurrencies when Bithumb, a South Korean exchange was hacked. Just as when you shop for a cryptocurrency wallet, you should examine the security features of the platform first. What encryption does it offer? How does it protect your identity? How much data regarding transactions does it make public? Which security methods besides secure socket layer (SSL) encryption does it use? Examine its insurance, liquidity and spread.
Next, determine what cryptocurrencies it supports. Initially, you’ll be hamstrung to an exchange that allows fiat purchases, but thereafter, if you plan to make cryptocurrency investing a regular facet of your portfolio, you’ll need an exchange that supports trades of a multitude of crypto coins, also referred to as tokens. Also examine its purchase and withdrawal limits, as well as its trading volume. The best exchange for altcoins might not accept fiat.
Quality costs money. A secure exchange that accepts fiat currency and runs trades in multiple cryptocurrencies may change heftier fees and commissions than a basic platform. Moving to high-volume trading can rack up transaction charges. This means it is important to shop around for a quality exchange that charges reasonable fees.
As mentioned, some platforms accept multiple methods of payment, including the use of existing cryptocurrency in a hot or cold wallet, linking your bank account, credit card, digital payment methods like PayPal or Google Wallet or by loading cash directly into the proprietary wallet on the exchange. The more options for payment methods provided, the better since this provides you flexibility.
You are safest choosing a local exchange. Local means within the borders of the country in which you reside. This protects your purchases by ensuring that they adhere to the legislation that governs cryptocurrency purchases within your nation. Check the exchange’s license. Most nations require cryptocurrency exchanges to obtain a license to trade assets, just as all other types of financial exchanges.
Finally, examines how simple to use the platform is. You can go through the motions of a trade without making an actual purchase. Explore the website or app. How hard is it to find what feature you want or to determine what the exchange calls it? The easier to use the exchange is, the more likely you’ll be to use it.
How to Get Started With a Cryptocurrency Exchange
Getting started purchasing cryptocurrency entails more than just choosing an exchange. Since few cryptocurrencies can be purchased with fiat currency, you need to make an intial purchase of Bitcoin or Ether, as mentioned. You need to link a bank account to do this, but its suggested that you open a secondary bank account to your main one. This provides a safety measure. Even in the event of a hack, the only money the hackers can obtain from the exchange of yours is what is in your exchange wallet or your secondary bank account. You can move just enough funds into the account to make an exchange purchase. Let’s use Coinbase as an example of an exchange you can use for your first cryptocurrency purchase.
- Create a Coinbase profile.
- Enter your secondary bank account informaiton.
- Verifying your bank account. This takes one to three business days.
- Click on the “Buy/Sell Bitcoin” tab.
- Pick your payment method from the drop-down menu.
- Type in the amount of your purchase.
- Click on the “Buy Bitcoin Instantly.”
- Check your Coinbase dashboard for confirmation of purchase.
You can then transfer your Bitcoin from Coinbase to another exchange or platform to begin trading altcoins. If you prefer to buy and hold, move the purchase into your cold wallet.
Besides choosing the right exchange for yourself, you will also need a cold and hot cryptocurrency wallet to store your crypto coins. While most exchanges offer a built-in wallet online, you should not use these for long-term storage of your purchases. They are prone to hacking.
If you plan to shop with a portion of the coins purchased, keep a fraction of your investment in a hot wallet online. Move most of your investment into a cold wallet though. You can purchase these for $50 to $299. You can also use a paper wallet. You’ll need an app or to use a website like myetherwallet.com to create the paper wallet, then print it. These printed documents are best kept in a safe or safety deposit box as you would with stock or bonds.
There is no one final “best cryptocurrency exchange” but you will find a number of top cryptocurrency exchanges. The best exchange varies depending on where you live, what cryptocurrencies you want to trade, your trading frequency and whether you’re starting out as a trader or you long ago established yourself as one of the earliest traders of Bitcoin.
In the US, Coinbase or Coinbase Pro probably makes the most sense for most investors. In Nigeria, Luno probably makes for the best choice. Your location decides which exchanges you can use, so it determines which provides the best choice for you. Hopefully, this guide to the top cryptocurrency exchanges helped much more than a simple list of cryptocurrency exchanges.