2017 was a huge year for cryptocurrencies. The explosion of growth in the market also meant an explosion of questions like “where can I buy Bitcoin?” and “where can I trade cryptocurrencies?” We’re going to answer those questions here so you know the best places to buy and sell cryptocurrency in 2018.
What Is A Cryptocurrency Exchange?
If you’re familiar with the idea of stock exchanges, you’ll have no trouble grasping cryptocurrency exchanges. They simply provide a marketplace for buying/selling/trading cryptocurrencies. The goal of any exchange should be to provide and fair and orderly opportunity for anyone to invest in the market. Exchanges make their money by charging small fees on the transactions that take place on their platforms. There are tons of cryptocurrency exchanges out there, and there’s a chance we see others emerge as the crypto craze continues to grow. So how do we find the one that we want out of all these options?
What Makes A Good Exchange?
There are many factors that go into a good exchange, the obvious being reputation and security. You may be restricted from certain exchanges due to your region. As with any software platform, a good UI can make all the difference. Other factors to consider are the available order types, altcoins, maker/taker transaction fees, and payment options. Margin trading is also a very desired feature among traders.
Each of us have different priorities and will value each of these things differently. For example investors would probably be more likely choose one exchange with a high reputation and ease of access, while most traders will use a combination of exchanges to gives themselves access to all the features they need.
Let’s run through a handful of the top exchanges, identifying the pros and cons of each so that you can choose the best one for you.
One of the most reputable and well-known platforms, Coinbase supports 32 countries spanning from North America, through much of Europe, the UK, and Australia. Asian investors will have to look elsewhere, as only Singapore is supported. Coinbase is very beginner friendly and often the choice for traditional investors looking to just get their hands on some Bitcoin. Available coins are currently limited to a few of the largest players: Bitcoin, Bitcoin Cash, Ethereum and Litecoin. Payments can be made after authorizing a bank account, or by credit card (with a higher transaction fee). This is a bit different from traditional exchanges, where you must deposit fiat money in your exchange account before placing a buy order.
GDAX, an extension of Coinbase, functions as a traditional exchange offering a real-time marketplace for trading the same four coins as mentioned above. However, being more of the tradional exchange that it is, traders may swap their Bitcoin for other coins. For example, you have the option to trade your Bitcoin for Ethereum and vice versa. There is currently no fees for moving funds from Coinbase to GDAX as they are partner platforms.
Both Coinbase and GDAX use a simple and clean user interface that should be intuitive to figure out.
Great for: Beginners who need a simple platform for buying and selling. Not great for: Day traders who are looking for serious technical analysis tools and a large selection of coin pairs to trade between.
https://poloniex.com Fiat support: No Altcoin support: Good Order types: Limit, stop limit AND margin trading Transaction fees: Moderate
Yet another of the most popular exchanges worldwide, Poloniex is a solid and reputable choice for traders looking for a decent selection of altcoins. A major advantage of Poloniex is the ability to trade on margin, giving seasoned traders the option to short coins. Although there are only a handful of coins available for margin trading, this is a very welcome feature that seems to be pretty rare to find in the current state of crypto exchanges. Like many of the others, the Poloniex UI does not offer much in the realm of advanced technical analysis tools, but overall is a great interface that provides tons of useful information without seeming too cluttered.
Great for: Traders who are looking to margin trade. Not great for: Traders who are looking for access to the largest number of altcoins.
https://www.kraken.com Fiat support: Yes Altcoin support: Moderate Order types: Market, limit AND margin trading Transaction fees: Moderate
Kraken is a San Francisco-based exchange that sees the highest volume among European traders. It boasts some perhaps one of the most complete set of perks with fiat support, a few altcoins, and margin trading. Fiat currencies EUR, USD, JPY and CAD can be utilized after a bank wire deposit. The only issue is the Kraken UI. It’s largely unintuitive and often difficult to navigate.
Great for: Traders looking for complete-set of features. Not great for: Traders looking for simple user interface or large altcoin selection.
https://bittrex.com Fiat support: No Altcoin support: Great Order types: Market, limit, stop limit Transaction fees: High
Bittrex is another US based exchange, with usage all across the world. This exchange puts a lot of focus on supporting as many altcoins as possible, including very new and emerging ones. Currently, they support over 190 coins. A common complaint with Bittrex is high transaction fees (currently at 0.25% on all trades). The UI is pretty good and gives a fairly high number of technical analysis tools for those who are interested.
Great for: Traders who are looking for access to as many altcoins as possible. Not great for: Traders looking to minimize fees.
https://www.binance.com Fiat support: No Altcoin support: Great Order types: Market, limit, stop limit Transaction fees: 0.1% regardless of maker or taker
A Hong Kong based exchange, Binance is another very popular choice across the globe. With recent news that China has banned cryptocurrency exchanges, there is reason to be weary, however Binance is registered outside of China and so is not currently subject to this ban. It is a bit unique in that it was partially funded by it’s own ICO (BNB). This has helped Binance to keep a very low transaction fee of 0.1%. Another very unique feature of Binance is it’s incubator. The goal is to help other pre-ICO blockchain startups achieve their goals.
Fiat money can not be used on Binnace so you will need to have purchased Bitcoin, etc. elsewhere and sent it to your Binance account. On the other hand, there are tons of altcoins available with trading pairs for the aforementioned Binance coin, Bitcoin, Ethereum and Tether. The exchange’s UI is split into two separate, but equally clean UIs. Those just getting started will find the Basic view to be simple enough, while the Advanced view provides some tools for more experienced uses to do some basic technical analysis.
Great for: Traders looking for unique platform with a broad selection of coins and low fees. Not great for: Those who do not want to worry about keeping an eye on Chinese cryptocurrency regulations.
https://www.bitfinex.com Fiat support: Yes Altcoin support: Moderate Order types: Market, limit, stop limit, trailing stop AND margin trading Transaction fees: Moderate
Bitfinex is perhaps the most professional exchanges out there right now. So professional in fact, that the time of writing, they have temporarily disabled the creation of new accounts so as to support existing accounts instead of “new, small accounts.”
Although Bitfinex seems to take security very seriously, a 2016 hack is something to take note of. Having no hiccups to speak of since that attack, Bitfinex has done well to bounce back.
For those willing to wait in line for a Bitfinex account and look past the security breach, you will be getting a feature-rich platform. Perhaps the best set of order types out there, including a trailing stop loss, as well as fiat support and margin trading, experienced traders should be satisfied. Another great and unique feature of Bitfinex is a customizable interface and in browser notifications. Great for: Serious traders looking for top-notch features. Not great for: Those not interested in doing much trading or traders who are looking for a large altcoin selection.
https://www.bithumb.com Fiat support: Yes (KRW only) Altcoin support: Low Order types: Market, limit Transaction fees: Low
Bithumb regularly sits among the leaders in trading volume despite being an exchange exclusively for Koreans (or at least those using the South Korean Won as their currency). It offers fiat support for a dozen of the biggest coins (in regards to market cap), making it one of the few places where you can trade straight between your base fiat currency and coins like Ripple and Monero. The Bithumb UI is very simple, yet effective for getting your hands on some of the most popular cryptocurrencies. Unlike most other exchanges, you’ll see no charts to show price history, making it unappealing for those looking to do any amount of day trading.
Great for: Those with access to the Korean Won and looking for an easy place to trade it for popular cryptocurrencies. Not great for: Anyone without access to Korean currency or anyone looking to day trade.
https://shapeshift.io Fiat support: No Altcoin support: Great Order types: Market Transaction fees: Low
Shapeshift of the most unique exchanges out there. It stays with the nature of cryptocurrencies by decentralizing the trading process. In other words users need no account in order to swap their Bitcoin for Ethereum. With no fiat support, but a low (practically nonexistent) barrier of entry to a pretty large selection of altcoins, Shapeshift has continued to grow as a popular exchange among traders.
Another promising development from the Shapeshift team, Prism, currently sits in closed beta and has attracted a lot of interest among crypto investors.
Great for: Traders looking for a quick and decentralized way of swapping between cryptocurrencies. Not great for: Traditional investors.
https://cobinhood.com Fiat support: Yes Altcoin support: None Order types: Market, limit AND Transaction fees: None
Cobinhood is a very new exchange that has gotten a lot of buzz in the crypto world, mostly due to ZERO transaction fees. It’s UI very much resembles GDAX (a very solid UI). Cobinhood provides an ICO underwriting service. This means that once a participating coin’s ICO ends, the coins can be immediately listed on Cobinhood. This program is what provides funds, allowing Cobinhood to get by without the transaction fees.
Cobinhood is still in it’s infancy, but it seems promising and is worth keeping on eye on down the road.
Great for: Traders looking for an alternative to something like GDAX. Not great for: Those looking for an established platform.
Best In Class
If you’re still unsure about which exchange is best for you, I’d like to mention some favorites based on personal experience.
Best Availability: Coinbase/GDAX
There are reports of account creation taking upwards of a month on some exchanges. Coinbase’s high reputation with account creation, security, etc. make it the go-to platform for investors and traders all around the world.
Best UI: Poloniex
Although there are exchanges that offer great technical analysis tools in their UI, a lot of traders tend to use other services such as Coinigy or TradingView for that kind of stuff anyway.
Poloniex offers little in that department, but it’s such a solid UI with intuitive navigation and a good set of order types. In particular, I really love being able to scroll through all coins and their price and volume while viewing the chart of one coin.
Best Altcoin Selection: Binance
Binance offers one of the widest altcoin selection on the market. It’s great UI and low transaction fees make it a great choice for traders who need access too all those coins.
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