Exchanges form an essential component of the cryptocurrency world. With cryptocurrency gaining recognition worldwide and the recent Bitcoin price movements hitting the headlines, popularity of exchange platforms has soared to great heights. And there are new exchanges coming up, which makes it difficult to choose the right one.
In spite of cryptocurrency being popular because of its transparency and easy transactions, choosing the right exchange is vital for safety and ease of use. And with a past history of hacks blotting the reputation, exchanges have put in place more robust security mechanisms now. But security is not the only criterion to choose an exchange. Here are some other vital factors for selecting the best exchange and trading website.
Criteria to choose the best exchange and trading website
Exchange info: The founder name, location and specific market the exchange focuses on are important details to look into. Since Bitcoin is not yet fully regulated in several countries, there are concerns regarding its misuse in situations such as drug trafficking, money laundering and fostering terrorist activities.
Supported currencies: You should find out about the currency pairs an exchange supports before choosing it. Many of the altcoins are traded on only a few platforms. Once you are sure about the trading pairs, you need to check the liquidity of the pairs. A high volume of trading indicates good liquidity. Thus, you can be ensured of easy and fast trades and sell your currency profitably.
Charges: Exchanges earn from charging a minor percentage of the money you trade. Most exchanges charge less than one percent – 0.2% is the average rate. Exchanges use sliding scale feature to reduce fees as the trading volume of a trader increases.
Trading options: This is based on what a user may require. Some users prefer margin trading while others look for derivatives and futures.
User-friendly trading: The interface should load quickly, be easy to use and should be mobile responsive to ensure hassle-free trading.
Security: You need to look for security aspects such as two-factor authentication, mails with PGP encryption, SMS and email alerts, funds in cold storage, monitoring of wallet 24/7 and a valid proof of coin reserve.
Now that you know about the crucial factors let us see the top 10 exchanges to watch in 2018.
Based in San Francisco, California, the initial offering was limited to the US market. But now it has been extended to over 18 countries in Europe. The trading here is different. You get Bitcoins in 3 to 5 days. The rates are at 1% with 0.15% for bank charges. It does not offer much in terms of options.
- High liquidity;
- Good for beginners.
- Demanding identity verification;
- Slow support.
Why choose Coinbase
This exchange is a huge broker, great for beginners; but for experienced traders, a more dependable option is needed.
Created in London in 2013, CEX.IO has been operating as an international cryptocurrency exchange. Charges for trading range from 0 to 0.25% upon the taker-maker fee schedule, but can go up to 7% for the instant buy/sell feature. It also deals with margin trading. It provides services to 99% of countries worldwide and operates in certain states of America.
- Good trading interface;
- High trading volume;
- Strong security features;
- Payment cards accepted.
- Charges are high;
- Demanding verification process.
Why choose CEX.IO
Other than a minor hitch of higher fees, the exchange is efficient to trade in.
Founded in 2013, the company trades in large volumes. It is in beta testing stage now. Fresh and innovative features are expected to be included soon. Security features are quite good with the exchange using cold storage for the majority (99.5%) of its assets.
- Has high liquidity;
- Charges are low;
- Many options present;
- Has repaid the damages from its earlier hack.
- Complicated for beginners;
- Has history of hacking (2016).
Why choose Bitfinex
Strong security features, redeeming of all debt tokens, high volume trading and multiple options make it a high-rated exchange.
Started in 2011 by Nejc Kodric and Damijan Merlak in Slovenia, it later moved to UK. Soon it shifted to Luxembourg where it is present now. The security is good. It features a medium trading volume. Trading charges range from 0.1% to 0.25%. It was hacked in the year 2015.
- High liquidity is present;
- Legitimacy is good;
- Quick and simple to use.
- Charges are expensive for those dealing in very low volumes;
- Limited range of cryptocurrency.
Why choose Bitstamp
With high volume Bitcoin trading, stellar reputation, great features and security, Bitstamp is a reliable exchange.
Created in 2013, this is a company formed by MinerGate team. It developed into a full-fledged exchange by 2015. Prague in Czech Republic is the current headquarters of Changelly. It has two factor authentication and HTTPS protocol for account security. Coin processing is done directly to the wallet and no email confirmation is needed. All transactions are anonymous.
- Has extensive options for cryptocurrency exchange;
- Good security;
- Credit cards are accepted.
- Transaction fee is high at 0.5%;
- Negative community feedback;
- New company on the block.
Why choose Changelly
User-friendly website design, wider range of coins, good security and reputation make Changelly an appropriate exchange to use.
This service matches Bitcoin sellers and buyers offering online transactions and escrow service. Jeremiah Kangas founded the exchange in 2012. Headquartered in Helsinki, Finland, the exchange is present in 13774 cities spreading over 248 countries. There is 1% fee for trading.
- It is quick and private;
- Simple to use;
- Does not need identity verification.
- Should be careful to avoid scams;
- Not appropriate for big traders.
Why choose LocalBitcoins
While it is a good exchange for traders with its plentiful features, it is not ideal for beginners.
Artur Schaback and Ray Youssef founded Paxful in 2015 in Wilmington, Delaware. It is a popular P2P exchange that operates worldwide except in New York State. Commissions are given for buyers using newer payment methods. The security is strong, but it trades Bitcoins in low volume only.
- Charges are low;
- Payment methods are varied;
- Easy registration and use.
- Customer support is slow;
- High seller commissions while buying Bitcoins with currencies that are not widely used or buying through uncommon methods.
Why choose Paxful
It is a good alternative for trading Bitcoins and has decent features that make it easy to trade in.
Founded by Manfred Karrer with Barcelona, Spain, as a headquarters location, the exchange is a decentralized and autonomous platform. The trading fees for takers and makers differ.
- It is a decentralized exchange;
- Multisignature security;
- Has a wide range of crypto and fiat.
- Needs improvement;
- Charges high rates.
Why choose Bisq
If you want a different platform which specializes in decentralized trading, this is a good option.
Star Xu founded OKCoin in 2013 in Beijing, China. The exchange offers good security, and the charges for trading are 0.10% to 0.20%.
- High liquidity;
- Advanced options for trading;
- Charges are low.
- Chinese exchange;
- Problems with verification faced by foreign traders.
Why choose OKCoin
With all basic features, the exchange is ideal for Asian traders.
With Shanghai in China as its headquarters, Lake BTC was launched in 2013. It deals in high volume trades and features good security. The exchange charges different types of fees, while the trading charge ranges from 0% to 0.2%.
- Charges are competitive;
- Security is good;
- Accepts different fiat currencies.
- Website needs improvement;
- Is not competitive enough.
Why choose LakeBTC
The exchange could be a perfect trading platform if it offers more trading options.
There are over 60 Bitcoin exchanges available, including the 10 featured in our list. With our selection criteria and a brief review of top 10 exchanges, you can easily choose the right exchange to sell or buy Bitcoins.