Your first step into the cryptocurrency world will most likely occur through an exchange. There are two main types of exchanges that we will discuss in this guide.
The first type of exchange is what most people call a fiat exchange. This an exchange that allows the direct transfer of US Dollars, Euros, and most government-backed currencies to be traded for cryptocurrency.
The second type of exchange are cryptocurrency to cryptocurrency exchanges, that allow cryptocurrencies to be traded with each other. The most common pairings on these exchanges are Bitcoin and Ethereum. These exchanges will be covered more in-depth on the second half of this page.
Depending on what cryptocurrency you are trying to obtain, you will need to use certain exchanges. To get most cryptocurrencies, you will need to use both types of exchanges. This is because laws and regulations around certain cryptocurrencies make it difficult for fiat exchanges to sell them.
Each exchange has different pros and cons, so the best exchange for one person, might not be the best for another.
You should consider a number of things when determining the
best Bitcoin/cryptocurrency exchange for YOU:
- How safe is the website and server? Secure exchanges are better.
- How is the liquidity? The higher the exchange’s volume, the better.
- What are the exchanges fees? The lower the better.
- How is the exchanges customer support?
- What trading pairs are available?
- How many different payment options does it have?
- Is the exchange beginner friendly?
Here’s some information on some of the most popular fiat cryptocurrency exchanges.
Coinbase is considered by many as the most beginner friendly exchange. Its headquarters are in San Francisco, California. Coinbase allows its users to make recurring purchases when investing in various cryptocurrencies.
Coinbase charges 1.49% fees on bank purchases and 3.99% fees on credit and debit purchases. If you sign up to Coinbase using the above link, you will receive $10 in FREE Bitcoin on your first $100 order.
Coinbase has recently rebranded GDAX (Global Digital Assest Exchange) to Coinbase Pro. This rebranding has come up with an updated user interface, and new features.
Coinmama is also pretty beginner friendly and focuses on credit and debit card purchases. They have instant delivery and are able to sell Bitcoin, Ethereum, Ripple, Litecoin, BCash, Cardano, Qtum and Ethereum Classic to almost all US States, and most countries. Coinmama’s fees are a bit on the higher end at 5.5%.
Coinmama doesn’t provide its users with a wallet on the exchange. Instead, users are asked to provide a wallet address to send the purchased cryptocurrency to. As long as you have your own wallet, this shouldn’t be an issue!
Please note that Coinmama doesn’t let you sell cryptocurrency back to fiat currency. This can be done on other mentioned exchanges after purchasing.
Bitpanda is a European based exchange that sells Bitcoin, BCash, Dash, Ethereum, Litecoin, IOTA, Komodo and Ripple for US Dollars, Euros, British Pounds, and Swiss Francs. It has several payment methods such as bank transfers, credit cards, debit cards, Skrill, Neteller and more. Bitpanda has 3.98% fees on credit and debit card purchases.
Recently, Bitpanda has made it so it’s users do not pay any transaction or blockchain fees for sending cryptocurrency between accounts on the exchange, making it convenient for sending lower amounts of cryptocurrency.
Bitpanda has a very simple user interface, making it easy for beginners to successfully invest in cryptocurrency.
CEX.IO offers security, high liquidity, and cross-platform trading. It has somewhat high fees, margin trading, almost 100% uptime, etc. It is headquartered in London, UK. It was affected by a small hack long back but has had no issues for a while. It has over 2 million accounts and a wide variety of cryptocurrencies for sale.
CEX.io appears to have little no fees at first glance. They are able to do this by charging a premium on the Bitcoin price. When a user buys cryptocurrency on their exchange, they are paying more for the actual currency compared to the other exchanges prices. This doesn’t matter too much as it is basically the same thing as a service fee.
Kraken is also one of the better cryptocurrency exchanges. It provides reliability, high-security environment, some legal compliance, and advanced order types like stop-loss orders. In addition to Bitcoin, Kraken offers over 15 cryptocurrency pairs including Monero, ZCash, Ripple and more.
Kraken also offers high liquidity, low fees, fast funding, margin trading, etc. It has uptime problems occasionally. It was founded in 2011. It is headquartered in San Francisco, California.
LocalBitcoins offers a peer-to-peer (P2P) exchange. It allows users to trade among themselves individually. It offers lower fees. It also offers a resolution system, a rating system for traders, etc. It allows users to post a quick buy or quick sell ad on the exchange platform. It is one of the best cryptocurrency exchanges for peer to peer trading.
LocalBitcoins is one of the better exchanges for users concerned with their privacy. Bitcoin can be purchased in person without linking an identity to an exchange.
Bitstamp is a Bitcoin/cryptocurrency exchange with very high trading volume which gives you more liquidity. It was founded in 2011 and has its headquarters in Luxembourg. Expect .25% when buying and trading on Bitstamp.
They have a wide variety of trading pairs and cryptocurrencies available such as Bitcoin, Ripple, Litecoin, Ethereum and more. Although it is based in Europe, users from the United States and other countries can send international transfers for a very low fee.
Gemini Exchange is an exchange based in New York, US. It only trades three currencies: US dollars, Bitcoin and Ethereum. It has low fees of 1%. It offers high security and compliance, top of the line cold storage system that stores information offline, access controls, and multi-factor authentication.
Gemini recently added support for more cryptocurrencies such as Zcash. This was a huge addition as Zcash is a privacy-focused currency and very few exchanges allow direct purchases of privacy cryptocurrency.
Crypto to Crypto Exchanges
Here’s some information on some of the most popular crypto to crypto exchanges.
Binance is one of the newer exchanges but has impressed its customers on several occasions. They have some of the highest trading volumes on several of their trading pairs, and an enormous amount of coins available for purchase.
It is based in Hong Kong, with offices located in several other countries such as Japan and China. It is available to all countries and US states.
Recently, Binance has introduced SAFU (Secure Asset Fund for Users), that takes 10% of all trading fees the exchanges earns, to give back to the users in the event of a hack.
Kucoin is also a relatively new cryptocurrency exchange based in Korea, that has a wide variety of cryptocurrencies for sale. It has its own token similar to Binance known as Kucoin shares, that award its holders a percentage of the exchanges total trading fees. Kucoin’s trading fee is .1%.
Kucoin holds contests and other promotions similar to Binance making it a great exchange to have an account on.
Changelly takes a different approach to being an exchange. Instead of letting users store their cryptocurrency on their exchange, they set up conversion transactions. Users select an input and output currency and an amount.
In the above example, I selected .1 BTC and an opposing amount of ETH is automatically determined at the going rate. Then, Changelly provides an address to send the Bitcoin to, and asks for an address to send their Ethereum to.
This effectively cuts out one step and swaps currencies in real-time. In exchange for their services, Changelly charges .5% on transactions. Fiat currencies such as the US Dollar and Euro can be used, but have slightly higher fees. Pretty cool!
Bittrex is a Seattle, U.S. based and regulated exchange. It offers several trading pairs and supports more than 190 cryptocurrencies. It offers speedy transactions, high stability, and follows some risk management practices. Bittrex’s fees are .25%, which are somewhat high compared to their competition. Bittrex’s customer support is pretty good and uses Slack, Twitter and Email.
They recently allowed certain customers to deposit fiat currency into their exchange, which is a pretty rare for an exchange with the amount of coins Bittrex offers.
Cryptopia is a New Zealand based exchange that has an enormous amount of cryptocurrencies available. It features Bitcoin, Litecoin, and Tether trading pairs. Cryptopia’s serves all countries and has trading fees of .2%.
In addition to their cryptocurrency trading pairs, Cryptopia offers a marketplace where nearly any item or service can be purchased with cryptocurrency.
BitFinex is one of the larger cryptocurrency in terms of volume and users. It is based in Hong Kong and has trading fees of .1% for makers, and .2% for takers. It is important to note that BitFinex does not allow US users to sign up for their exchange.
Please note that Bitfinex is limited in the countries they serve and do not accept US signups.
Poloniex is a U.S. based exchange available in all countries and states. It was recently purchased by Circle and has a great selection of cryptocurrencies. Poloniex has .15% fees for makers and .25% fees for takers.
Poloniex has lost a lot of their volume as competitors have been able to add more coins and features to their exchange.
Most cryptocurrency exchanges will serve their intended purpose in letting users buy cryptocurrency listed on the exchange. The main differences are the exchanges fees, customer support, the amount of supported coins, and supported countries. To ensure you have access to as many cryptocurrencies as possible, it may be wise to sign up for each exchange.
The important things to take away from this page is the difference between the two main types of exchanges.
The first set is commonly referred to as fiat exchanges, and allow users to use credit cards, debit cards, and bank transfers to purchase cryptocurrency. The most popular fiat exchange is Coinbase.
The other type of exchange is known as a crypto to crypto exchange and only allows cryptocurrencies to be exchanged with each other. No fiat currencies or debit/credit or bank transfers are used on these exchanges.
Frequently Asked Questions
How Do I Deposit Into an Exchange?
Depending on what type of exchange you are trying to deposit into, this will differ. If the exchange is a fiat exchange, you must link a payment method such as a bank account, credit card, or debit card.
If it’s a crypto to crypto exchange, you will find a tab or page on the exchange titled wallets, deposits or something of the sort. Click that, and from there you will see a deposit address for every cryptocurrency available on the exchange.
How Do I Withdrawl from an Exchange?
Similarly to deposits, this will vary depending on the type of exchange. Most fiat exchanges allow users to withdraw sold cryptocurrency back into their bank accounts. It is somewhat rare to find an exchange that allows withdrawals to a credit or debit card.
For crypto to crypto exchanges, you can most likely withdrawal from the wallet tab mentioned earlier. You will need to provide another wallets deposit address in order to send the transaction.
Lastly, some exchanges will have limits on withdrawls, that can be improved by verifying your identidy.