When you want to buy, sell, or simply exchange cryptocurrencies, you need to use a cryptocurrency exchange. However, there are three different types of exchanges:
#1: Trading Platforms:
These websites usually only allow buyers and sellers to establish a connection and they will then charge a fee for each transaction. Oftentimes, trading platforms will incorporate market analysis software as well, whereby traders and investors can chart the markets and perform cryptocurrencies screens
#2: Direct Trading:
Direct trading platforms are a unique way of trading since they allow each seller to set their own exchange rate. If someone concentrates on speed and order execution, it is the best solution for him.
A broker is an individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.
Anyone can visit these websites and the broker is the one who sets the price for the cryptocurrency.
Before you decide on which type of exchange is best for you, there are some factors that you need to take into consideration. These include:
Make sure that you read real reviews about the exchange that you are considering. This will give you a good idea of what you can expect.
One of the main differences among the exchanges is the fees they charge. However, most of them include this information on their website. Make sure to check all their fees in detail.
Usually, the larger the exchange, the more payment methods it accepts. One thing that you need to remember is that using a wire transfer can take some time as well as if you’re thinking about using your credit card, you need to count not only with the fees as well as you’ll be more prone to fraud.
While most US and UK based Bitcoin trading platforms tend to require some ID verification, other exchanges allow you to be anonymous. Even though this is your decision, the truth is that it will take you more time verifying your account but this is the way exchanges have to protect from money laundering and scams.
Leading Cryptocurrency Exchanges
Coinbase is one of the most well-known brokers and trading platforms in the world, You can buy, trade, store, and use digital currency in a secure and easy way through their platform. Coinbase allows you to buy Bitcoins, Litecoin, and Ether.
One of the best things about Coinbase is that they have an insurance covering the stored currency. However, their payment methods are somewhat limited as well as they don’t serve all countries around the world.
Even though Kraken was only founded in 2011, it is a partner of the first cryptocurrency bank. This partnership delivers may opportunities to their traders since they allow you to buy and sell bitcoins and trade between, bitcoins and euros, Japanese Ye, British Pounds, Canadian Dollars, and US Dollars, and you can also trade other digital currencies such as Bitcoin, Stellar/Lumens, Ripple, Dogecoin, Litecoin, Zczsh, ICONOMI, Augur REP tokens, Rtherum Classic, Monero, and Etherum.
One of the best things about Kraken is that it is supported worldwide and their fees are pretty decent. Plus, they do have a good reputation and a great customer support. However, if you’re a beginner, you may want to start with another exchange as well as their interface should be more intuitive.
Poloniex is a pure crypto to crypto exchange based in the United States. With a grand redesign in early 2015 the site has added a wealth of features to provide a fully immersive trading experience. Technical analysis charts and live chat mean it is easy to stay abreast of news flow and analyse price trends before taking a position.
For a crypto to crypto exchange there is good security and decent volume and orderbook depth for the majority of its trading pairs. Trading fees are flat at 0.2% and deposit and withdrawal fees are subject to the blockchain’s specific minimum transaction fee.
Local Bitcoins is a different sort of exchange that allows anyone anywhere to trade. It therefore has the largest amount of markets for example in Venezuela and other emerging markets. LocalBitcoins works like an open outcry with people in the same location as you – if you want to trade you can place a buy or a sell for a price and wait to be contacted by someone who wants to execute that trade. After agreeing the trade funds are released and held in escrow and depending on the specifics of the local banking system and times for transactions to get confirmed, the trade will eventually be completed.
In all a good means to exchange Bitcoin but it doesn’t have the razor edge price discovery, and execution time of more traditional order driven exchanges.
Established in 2013 as the first cloud mining provider, CEX.IO has developed into a Bitcoin exchange. CEX.IO offers two main services: easy buy/sell of Bitcoins via simplified interface and Bitcoin trading for professionals. You can buy and sell both Bitcoin and Ethereum with CEX.IO for multiple fiat currencies: USD, EUR, GBP and RUB
CEX.IO is a registered Money Services Business in FinCEN (USA) and has obtained a PCI DSS certificate that allows the company to store, process and transmit cardholder’s data.
BitFinex offers three main functions – it is a pure bitcoin to fiat exchange, a margin trading exchange and a liquidity provider. The platform offers a number of features available that expand the financial positions you can take – for example the ability to short Bitcoin via margin trading. The exchange also offers a set of other cryptos apart from bitcoin such as Litecoin and Ethereum.
Bitfinex was hacked on 03 August 2016 and around 120,000 BTC were stolen.
Bittrex is one of the larger crypto to crypto exchanges offering a large number of trading pairs into bitcoin – including all the major cryptos such as darkcoin, nextcoin and litecoin. They also offer NeuCoin and Ethereum.
The exchange does have a very high turnover cryptocurrencies. They do have very good security with two factor authentication and are United States based.
Bitmex is the leading bitcoin margin trading site. Users can trade cryptocurrency derivatives with up to 100x leverage. Pairs include BTC/USD, Yen, Monero, Ripple, Dash, and Ethereum. Granted that this platform is for experienced and seasoned traders. Beginners should avoid trading coins here without knowing the implied volatility risks.
These are the well-known exchange platforms for cryptocurrency exchnage. There are many others, and you want to use one of them, we recommend to check precisely the reputation, the fees, the security, etc.