Novice crypto investors may believe that where they purchase their digital currency is irrelevant, but the decision has a substantial impact. The truth is that most of the exchanges out there are either scams or clearly inferior to one of their competitors. The five exchanges detailed below are some of the best available, so consider these first for your next cryptocurrency purchase.
Coinbase is often cited as the best exchange to learn cryptocurrency on. It combines an intuitive interface with the convenient option to fund your transactions with a bank account or credit card, making it an ideal choice for beginners. Withdrawals are also hassle-free, and you can even transfer your money to a bank or PayPal account. Finally, Coinbase is one of the only exchanges to ensure money in your wallet, giving it a security edge over most other exchanges.
Unfortunately, more experienced investors graduate from Coinbase and move to another exchange. The site’s fees are high–1.49% if funded with a bank account and 3.99% if you use a credit card. The exchange only trades four tokens (Bitcoin, Litecoin, Ethereum, and Bitcoin Cash), leaving investors looking to speculate on altcoins out in the cold. Finally, the site caps how much you can spend per week.
Who Should Use It: Beginners
Who Should Avoid It: Experienced investors interested in altcoins and/or maximizing ROI
BitStamp is best described as Coinbase for Europe. It offers a convenient interface and a simple fee structure. Accounts funded with a European SEPA account have no deposit fee, and there’s a flat fee of 0.90 EUR for every withdrawal. Transaction fees are generally low as well, even if you don’t use an European account.
Like Coinbase, BitStamp doesn’t offer all of the latest altcoins, but their selection is a little better. For example, Ripple is available on BitStamp but not Coinbase. Credit cards are supported, but the associated fees are astronomical (5-8% per trade). It may also get annoying to work with European euros if you primarily use a different fiat currency.
Who Should Use It: Europeans, maybe beginners
Who Should Avoid It: Advanced investors, individuals unaccustomed to euros, credit card investors
Gemini is an excellent option for the investor interested in minimizing fees. Every trade costs only one-quarter of one percentage point, and there are no deposit or withdrawal fees. You can link a bank account to fund your transactions, and even start trading before your first deposit clears. Note that you cannot cash out until your deposit clears, however.
The biggest downside of Gemini is that it offers only Bitcoin and Ethereum, excluding even popular altcoins such as Litecoin and Ripple. Weekly spending is also capped at $500 USD, making large bets impossible.
Who Should Use It: Investors looking to maximize ROI on Bitcoin and Ethereum
Who Should Avoid It: Experienced investors looking for altcoins or large purchases
Kraken is the first true crypto exchange on this list, with most trades in a Forex-style matching pairs format. It offers a decent selection of 16 tokens, including Z-Cash, Monero, and Dash to complement mainstays such as Bitcoin and Ethereum. Advanced trading options such as stop limits, leverage trades, and conditional closes allow experts to maximize their ROI. You can also fund your transactions with a bank account, adding some convenience for newer investors.
The major disadvantage of Kraken is how complex it is. Forex-style trading is notoriously difficult for new users to figure out, and the fee structure charging a different percentage based on the specific matching pair is more complicated than it needs to be. Most of the fees are .36% or less, but the occasional rip-off is possible. Finally, your initial deposit must clear before you can start trading, with no ability to lock in current pricing.
Who Should Use It: Expert crypto traders, beginners with prior Forex experience
Who Should Avoid It: Beginners, impulsive investors who may not double-check the fee structure
Bittrex also uses Forex-style matching pairs. It offers an impressive selection of over 190 tokens, ensuring that any altcoin you want is available. Fees are also reasonable, generally on par with what Gemini charges.
Bittrex’s downsides are similar to Kraken’s on steroids. Forex-style matching pairs are even more confusing with so many options to choose from, especially since the site doesn’t support every possible matching pair in its selection. There is also no way to fund your trades with fiat currency, instead requiring you to purchase virtual currency on another site and transfer it to Bittrex to trade.
Who Should Use It: Altcoin speculators, expert crypto traders
Who Should Avoid It: Beginners
The list above includes at least one exchange for every type of cryptocurrency investor. Happy trading!