Despite a wildly volatile exchange rate (which saw
bitcoin plummet below $5,000), cryptocurrencies like
bitcoin seem like they'll be around for a bit longer to say
the least. In fact, the cryptocurrency "industry" has a
market cap of over $122 billion, according to
CoinMarketCap .
And while bitcoin had a disappointing drop right before
Thanksgiving, tumbling 12% to around $4,915.06 on
CoinDesk.com, cryptocurrencies have become
increasingly popular - and exchanges are trying to keep
up with it.
For those brave investors wishing to get into trading
crypto, there are a ton of options for exchanges and
wallets. But, what are the best cryptocurrency exchanges,
and which one is right for you?
What Is a Cryptocurrency Exchange?
A cryptocurrency exchange is an exchange that allows
investors to buy, sell and trade various cryptocurrencies
often bought with fiat currencies - government legal
tender like the U.S. dollar or the Euro.
Cryptocurrencies are in that grey space between currency
and stock - and, given that investors have noticed crypto
fluctuating in tandem with the stock market, many seem
to argue it may be more of a security. Still,
cryptocurrency exchanges perform essentially the same
service as regular exchanges on the stock or bond
market - they allow people to buy or sell
cryptocurrencies.
There are a multitude of cryptocurrency exchanges that
trade a variety of coins, including bitcoin, litecoin ,
ethereum and many, many more. While not all exchanges
allow you to buy coins with U.S. dollars, those that do
allow you to use your own cash to purchase coins or
trade different coins - like buying bitcoin with litecoin
and so on.
Cryptocurrency exchanges will often have a USD value
for the coin you are looking to buy reflected in the
exchange rate. Exchanges may also show the exchange
rate between different coins.
How to Invest in Cryptocurrency
Given the somewhat ambiguous nature of cryptocurrency
(is it currency? Is it a security? Is it all in our heads?),
investing in cryptocurrency is something between a
security and an actual form of currency. Because its
value is so high (even though it has recently dipped,
bitcoin is still worth a pretty penny), it is something of an
investment.
In fact, there are short-term, medium-term and long-term
investments you can make in cryptocurrencies like
bitcoin and the like - all subject to market fluctuations.
But once you've decided you want to go for it and start
investing in cryptocurrency, you're going to need a good
cryptocurrency exchange.
Many exchanges allow you to invest in cryptocurrencies
directly with USD.
The Best Cryptocurrency Exchanges
A good cryptocurrency exchange is essential to beginning
(or continuing) your journey of investing in
cryptocurrency. So, what are some of the best
cryptocurrency exchanges, and what makes them stand
out?
1. Coinbase
Touted by many as the " most beginner-friendly
exchange ," Coinbase has a lot to offer.
Founded in 2012, the San Francisco startup was the first
to earn a "unicorn" status for a crypto exchange with its
$1 billion valuation.
The plus of Coinbase is that the service functions as an
exchange, wallet and tool set for merchants. Currently,
Coinbase trades in four different cryptocurrencies.
Additionally, the exchange-slash-wallet accepts fiat and
has a typical fee of 1.49% to 3.99% per purchase (for
$1,000 of bitcoin, that would be about $14.90). However,
you can't short-sell or margin trade on Coinbase.
Still, for beginners wading into the crypto waters,
Coinbase is an easy-to-use platform that allows you to
either purchase coins (like bitcoin or litecoin) through
their wallet or trade through their sister platform GDAX,
which allows more advanced traders the opportunity to
trade with each other at lower trading fees. Coinbase's
wallet is available on iPhone and Android interfaces as
well, which certainly has helped its popularity.
Additionally, according to Forbes, Coinbase is also
partnered with companies that accept bitcoin
like Expedia, ( EXPE ) Overstock (OSTK ) and Dish (DISH ) .
In terms of regulation, Coinbase is registered as a Money
Services Business with FinCEN, and is licensed in most
U.S. areas. But, for U.S. coin holdings, the FDIC ensures
up to a maximum of $250,000 - a definite plus for U.S.-
based investors.
2. Binance
As the world's biggest cryptocurrency exchange , Binance
has become somewhat of a household name in the
crypto world. And, according to recent reports, they may
be expanding.
"Right now, Binance is still a major cryptocurrency
exchange and many people view us as that, but we are
building the ecosystem. We want to be the infrastructure
services provider for the blockchain space, so we have a
number of different initiatives," Binance CEO Changpeng
Zhao told TheStreet earlier this month . "Right now, our
ecosystem is made up of the Exchange, a wallet, Labs,
Charity, Info, Academy and more. We hope some of them
will become the infrastructure for the industry."
Still, Binance has attracted customers (who trade
a volume of around $500 million per day) for good
reason - Binance's $1 billion market cap is well earned.
One of the major bonuses of Binance is its low
transaction fee - about 0.1%. And, with over 130
tradeable currencies, Binance has got pretty much
everything a crypto enthusiast could want.
Additionally, you can set your trading mode based on
your experience - with either beginner or advanced
options. And as a unique feature, the exchange even has
its own coin (called "Binancecoin" or BNB) that comes
with a discount (on fees) when crypto-to-crypto trading.
According to data from CoinMarketCap, the token's
market cap is at around $1.7 trillion.
On the downside: you currently can't use fiat, and you
also can't short sell or margin trade. And, the exchange
has very minimal regulation.
3. BitMEX
Hailing from Hong Kong, BitMEX (Bitcoin Mercantile
Exchange) is one of the premiere bitcoin trading
platforms often used by more serious crypto traders.
BitMEX only trades one cryptocurrency - bitcoin. But the
exchange has certainly gained popularity among bitcoin
enthusiasts, reportedly doing over $2 billion in
transactions over 24-hour periods.
Still, it may just be BitMEX's special leveraged contracts
that make it stand out. Yes, that's right - with BitMEX,
you can buy leveraged contracts like futures contracts
and perpetual contracts full of bitcoin instead of just
owning the coin itself. Translated, that means that profits
and losses are all still in bitcoin (not cash). However, if
you are in the U.S., you're out of luck - BitMEX is
currently not available in the states.
As a last word, BitMEX has typical maker and taker fees
(made when adding or taking liquidity to or from an order
book) of 0.05% to 0.25%, and does not accept fiat. Still,
you can short sell and margin trade on BitMEX.
4. OKEx
Another Hong Kong native, OKEx has become popular for
its vast selection of coins (over 145) and its own token -
called OKB. OKEx's token gives traders discounts, a
voting capability in the company, and benefits like
margin or fiat trading for verified customers.
Additionally, OKEx has about a 0.02% to 0.2% taker and
maker fee, and for some customers allows margin trading
and short selling. According to OKEx's website, the
exchange does about $1.5 million in bitcoin futures every
day.
However, much like BitMEX, OKEx still doesn't service
the U.S. due to regulation issues - but the exchange is
reportedly expanding to Malta.
5. Kraken
Started in 2011, Kraken is reportedly one of the largest
bitcoin exchanges in euro and liquidity, and is popular for
its wide selection of fiat currencies available to trade -
including the USD, euro, pound, yen and the Canadian
dollar.
And, Kraken is partnered with the first cryptocurrency
bank.
Kraken trades 17 coins, accepts fiat currency, allows for
margin trading and short selling and has a maker and
taker fee of around 0% to 0.26%.
Still, the platform has gone under fire recently when its
CEO Jesse Powell wouldn't comply with the New York
Attorney General's inquiry into their regulation. Still, the
company insists it is working on regulating.
Because of its options for different kinds of trading, high
liquidity and its variety of top cryptocurrencies (including
those like Ripple ), Kraken is ideal for more seasoned
traders.
6. Huobi
Founded in China, Huobi is not yet available for
U.S. investors but boasts a massive 248 tradeable coins.
With maker and taker fees at around 0% to 0.2%, Huobi
has become a favorite. The exchange also has different
versions - the traditional Huobi OTC, which allows fee-
free trading of cryptocurrencies with fiat currency, and
the Huobi Pro, which allows for more advanced trading
capabilities.
Additionally, according to Coindesk , Huobi is going to
offer a cryptocurrency exchange traded fund (ETF) to be
named HB10. The ETF will allow users to be exposed to a
variety of assets at the same time.
For Huobi Pro users, 24/7 customer service is available.
7. Gemini
Last but not certainly not least, the baby of infamous
venture capitalists and almost-Facebook ( FB )
creators Cameron and Tyler Winklevoss, Gemini is a New
York-based exchange.
Gemini is open to both individual and institutional
investors, and accepts fiat currency. With maker and
taker fees at around 0% to 1%, Gemini is a pretty standard
service. Currently, the platform only trades three coins,
but has gained popularity and notoriety for its attitude
toward cooperating with regulators.
In fact, Gemini also provides FDIC insurance for cash
(although once you've converted your cash into crypto,
you're on your own). For many investors, this is a huge
plus.
And while Gemini does not have margin trading or short
selling, the platform is regulated by the New York trust
company, which in turn is regulated by the New York
State Department of Financial Services - making it a
great above-board option for crypto investors.
The Bottom Line
Picking a cryptocurrency exchange will depend largely on
your location and particular needs. For example, if you
are U.S.-based, your options will automatically be more
limited. You will have to make decisions based on your
trading level, as many exchanges have beginner or
advanced options and platforms.
Other elements to consider are: if you are set on using
fiat currency to purchase crypto coins, or wish to margin
trade or short sell currencies.
Source : Anne Straders
https://www.thestreet.com/investing/bitcoin/best-7-cryptocurrency-exchanges-14777561
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Topic: The 7 Best Cryptocurrency Exchanges (Read 2901 times)