On the other hand, the crypto world is also rapidly expanding, as developers work tirelessly to bring more and more cryptocurrency into the market. Currently, there are over 3,000 crypto coins in the market and the number is still growing.
Some years back, people used to hold Bitcoins for quite a while before disposing them. However, as the crypto coins increased, the urge to trade cryptocurrency has increased and developers have also come up with crypto trading platforms, referred to cryptocurrency exchanges or crypto exchanges.
One of the hardest parts of trading cryptocurrency is choosing the right exchange. As a trader, this will determine the type of coins you will trade and thus the type of coins you can hold, the security of your coins and how easy cryptocurrency trading will be for you.
Types of cryptocurrency exchanges
There are mainly two types:
i. Fiat crypto exchanges
These allow you to purchase crypto coins using your local currency. To facilitate this, they allow the use of traditional payment methods like credit card, bank wire, etc.
ii. Pure cryptocurrency exchanges
These exchanges only allow exchanging of cryptocurrencies. If you want to buy a certain crypto coin, you will have to hold another type of crypto coin so as to use it to purchase the other one.
Features to look for in a crypto exchange
When choosing the right cryptocurrency exchange, there are some features that you should look at. Those features include:
1. Security of your funds
A good cryptocurrency exchange will have a 2-factor authentication (2FA) that ensures your account is secure from scammers. You should also look to see that the company behind the exchange platform is licensed by a trusted regulating body.
2. Number of crypto assets
The number of crypto coins offered in the crypto exchanges vary. Some specialise in one crypto coin while others offer a variety of crypto coins for trading.
Remember, you can’t trade a crypto coin that is not offered by the crypto exchange of your choice. Therefore, you will have to first look at the crypto coins that are traded on the exchange to ensure the coins that you wish to trade are listed on it.
3. Fees
How much does the exchange charge when converting your money? How much do they charge per transaction? How much do they change per trade?
Good crypto exchanges have low to standard fees. You don’t want a huge percentage of your funds to go to other uses like conversion or processing transactions leaving you with less funds to buy crypto coins; your main objective of signing up with the exchange in the first place.
4. Speed
Speed is paramount when trading any financial market. In the crypto world, we look at how fast the exchange can deliver your crypto coins once you exchange. For example, how long does it take for Bitcoins to reflect in your balance when you buy them?
5. Limits
You should also understand the limits set by the crypto exchange. How much can you can buy and also how much you can deposit and withdraw?
Top five crypto exchange platform list
1. Coinbase
This was established in 2012 and its headquarters are in San Francisco, USA. It is a fiat crypto exchange and is the most used by crypto traders when converting their fiat currencies into crypto coins.
Pros
- It has a very user friendly user interface
- The transactions speeds are very fast.
- It allows mobile trading thorough its Android and iPhone trading apps.
- It is regulated and licensed by the Federal Deposit Insurance Corporation (FDIC), which is an independent agency in the US that provides insurance to depositors in commercial banks and savings institutions.
- Depositing funds into your Coinbase account is free.
- They have very high limits.
- It has mobile and online wallet services.
Cons
- It has limited payment methods. It only allows credit or debit card for most countries and bank transfer for US citizens.
- It charges a 1.49% fee per trade, which is relatively high.
2. Binance
This is a pure crypto exchange, meaning you will need to go through a fiat cryptocurrency exchange to convert your fiat currency into a cryptocurrency like Bitcoin which you then transfer to your Binance account for purchasing and trading other crypto coins.
Pros
- It has very low fees of 0.1% per trade. And when a trader uses their token, the BNB, the fee is 0.05%.
- It has a very wide list of crypto coins and traders can choose to trade any of them.
- Traders can deposit any amount. There is no limit on the amount that you can deposit.
- Also, no fees are charged when depositing.
- Withdrawal limit depends on the tier level that the trader is in. The level of Tier depends on how much you have verified your account. For level 1 tier, the maximum they can withdraw is 2BTC while for level 2 tier, the maximum is 100BTC.
Cons
- Don’t support fiat currencies
3. GDAX
This was established in 2012 and its headquarters are in San Francisco, USA. It is a fiat crypto exchange. It is managed by the same company that runs Coinbase.
Pros
- No fees charged for purchasing Bitcoin, Litecoin, Ether and Bitcoin Cash.
- There are also no withdraw fees. They are covered by GDAX
- The trading fees are low. They range from 0.1% to 0.25% per trade.
- Traders can use market orders, limit orders, and stop-limit orders when trading.
- There are no limits of depositing and also no limits to the amount of trades.
- The maximum withdrawal amount is $10,000 per day for an individual account, and $50,000 per day for an institutional account.
Cons
- It trading interface is quite complicated especially for beginners.
- You need a Coinbase account to be able to sign up with GDAX.
- Only supports bank transfers or transfers from Coinbase.
4. Brittex
This was established in 2014 and its headquarters are in Seattle, WA, USA. It is a special type of crypto exchange platform. If you want to purchase cryptocurrencies worth more than $10,000, then you can purchase directly from your bank through bank wire using your fiat currency.
However, if you are depositing cryptocurrencies less than $10,000, then you will require to first convert your fiat currency into one of the cryptocurrencies like Bitcoin using another platform like Coinbase, and then transfer into the Bittrex account.
Pros
- It has a very wide selection of crypto coins; over 190 crypto coins
- A basic verified account have a maximum withdrawal limit of 3BTC.
- It charges a 0.25% commission on every trade, which is relatively low compared to other exchange platforms.
- All transactions in Bittrex require two-factor authentication.
Cons
- Depositing directly using fiat currencies can only happen when depositing more than $10,000.
- They have a very strict verification system which tend to lock out very many traders who would wish to trade with them.
5. Kraken
Kraken Company was established in 2011 but the Kraken crypto exchange platform was launched in 2013. Headquarters are located in San Francisco, USA and it is considered a great rival of Coinbase.
Pros
- Offers a very wide range of fiat and cryptocurrencies.
- It allows Bitcoin margin trading
- Also allows automated trading and also use of stop loss orders.
- Depositing using cryptocurrencies is free. It is also free to deposit through SEPA from European banks.
- Fees for withdrawing using cryptocurrencies are also small, ranging from 0.001 to 0.02 of the base cryptocurrency used.
- The trading fees lower with the increase in the volume of trade. For trades below a volume of 50,000, the maker fee is 0.16% and a taker fee of 0.26%. For trade volumes between 50,000 and 10 million, the marker fee is 0.14% and the taker fee is 0.24%. For trade volumes greater than 10,000,000, the marker fee is 0 and the taker fee is 0.10%.
Cons
- Allows limited payment methods for fiat currencies. It allows bank transfers and Single Euro Payments Area (SEPA) payment system for European clients.
- The fees charged for depositing and withdrawing using fiat currencies are quite high except for European regions which are free.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.