Cryptocurrency is bringing tons of innovation to the world.
I also had trouble figuring out how to buy cryptocurrency. You probably agree the process is confusing.
But we’re going to show you in this article exactly how to get started with cryptocurrency exchanges so you can start trading.
In this post we will outline some of the best cryptocurrency exchanges, and why you might want to use one over the other. Let’s start!
There are two types of cryptocurrency exchanges:
The first type is called a “fiat exchange”.
Fiat exchanges allow you to convert your fiat money (dollars, euros, pounds, etc.) into cryptocurrency.
A fiat exchange lets you use traditional payment methods to convert your money into cryptocurrency, like:
Fiat exchanges are how most people make their entry into cryptocurrency exchanges. If you’re new you’ll definitely need to use a fiat exchange, so keep following along.
The second type of exchange is called a “pure cryptocurrency exchange”. These exchanges don’t deal with traditional payment methods like credit cards and banks.
Instead, pure cryptocurrency exchanges require that you deposit cryptocurrency FIRST and then you can trade the cryptocurrency you deposited for other coins and altcoins (any coin other than bitcoin).
So, to explain the difference and why you need both, let’s look at a coin called Ripple (XRP).
Ripple is currently the third largest cryptocurrency by market cap.
Most Americans use a platform called Coinbase to buy cryptocurrency, but Coinbase doesn’t sell Ripple.
So how do you get Ripple then?
You must first use Coinbase–your fiat exchange–to buy bitcoin with your bank or credit card. Once you’ve purchased bitcoin, you need to send to a pure cryptocurrency exchange, like Binance.
We hope that clears things up, and now we can start digging in to some exchanges.
If you already have a fiat exchange and are looking for a pure cryptocurrency exchange, click here to see options.
If you need to figure out which fiat exchange would be good for you, then keep reading!
Coinbase is a good gateway into cryptocurrency, especially if it is your first time buying.
The interface is very clean, making it easy to make your first purchase of bitcoin, litecoin or ethereum.
Since most cryptocurrencies must be purchased with bitcoin or ether, Coinbase is a good entry point whether you want Bitcoin or any other cryptocurrency.
The fees for buying with a credit card are 3.99%, while the fees for buying with bank transfer are about 1.49%.
Coinmama is a cryptocurrency broker that sells bitcoin, litecoin and ether for credit card. The fees are somewhat high so it may not be the best long term solution, but is a good and fast way to get started.
Coinmama supports most countries and has high buying limits, plus fast delivery time for coins. You should receive your coins within a few minutes of making payment.
Bitpanda is one of Europe’s largest cryptocurrency exchanges. It sells bitcoin, litecoin, ether, ripple, bcash and a number of other coins.
Bitpanda has some of the lowest fees among European Bitcoin brokers at around 3% per credit card buy, and about 1% for bank transfer.
Europeans can pay with a number of other common payment methods such as SEPA, SOFORT, NETELLER, Skrill and more.
GDAX is one of the only ways to buy bitcoin, litecoin and ether and bcash for no fees. GDAX is also owned by Coinbase and you need a Coinbase account before you can sign up on GDAX.
The main issue with GDAX is that its interface is quite confusing for new users. If, however, you plan on buying a lot of crypto then it is worth it to learn.
Users from the USA, Europe and UK can use GDAX and buy for 0 fees. GDAX also covers withdrawal fees from the exchange, too, which is a nice bonus.
Luno is a global exchange that supports Europe and other countries like South Africa, Nigeria, Malaysia and Indonesia.
Europeans can buy via SEPA transfer. Users from the other countries listed can buy using local bank transfer.
Kraken is one of the world’s largest cryptocurrency exchanges. It has been around for a long time and appears to be one of the most well run exchanges.
Kraken is harder for beginners compared to the exchanges listed above, since it requires you to understand orderbooks and order types. However, if you plan on buying larger quantities of coins then Kraken will be a good option since the fees are lower than some of the options listed above.
CEX.io is a global Bitcoin exchange that sells bitcoin, litecoin, ether and a bunch of other coins.
CEX supports most countries via credit card and bank transfer so it’s a great way to make your entry into cryptocurrency.
LocalBitcoins is very different than the exchanges listed above. LocalBitcoins allows buyers and sellers to agree on payment methods together and simply acts as escrow for the transaction.
The most common method, however, is cash. Since most people use LocalBitcoins in cities, it is a great way to buy bitcoins if the exchange options in your country are limited.
Most cities with over a few hundred thousand people have good liquidity on LocalBitcoins.
These are exchanges that require you to deposit cryptocurrency to start trading. Usually, this means depositing bitcoin (BTC) or ether (ETH).
Here is a quick comparison before we go into more detail on each exchange:
|Fees||Holds Funds||Based In||Founded|
Binance is a cryptocurrency exchange based in Malta. It has very low fees at just 0.05% per trade.
It supports lots of coins and has its site available in multiple languages, such as Chinese, English, Korean, Spanish, Japanese, Russian and French.
Once you purchase Litecoin, Bitcoin or Ethereum you can use Binance to convert one of those three coins into nearly any altcoin.
Binance has become popular for a few reasons:
This means it’s very easy to go in and out of coins at a good price. Most coins have deep markets, making Binance ideal for both big and small buyers and traders.
Binance has, by far, the best cryptocurrency exchange app. Binance’s app is available for both iOS and Android. It’s very easy to use and my be one of the most well designed applications I’ve ever seen.
Here is what the Binance mobile app looks like:
Changelly is a unique exchange in that you don’t actually need to deposit coins.
You simply tell Changelly which coin you want to buy, and how much of it you want to buy. Changelly will then tell you how much of the coin you are buying with to send.
The whole process is very fast and convenient. If the crypto markets are moving fast, Changelly is a super fast way to exchange since you do not need to wait for your deposit to clear. You can lock in your rate and simply wait for your exchange to go through.
Bittrex is one of the world’s largest 10 cryptocurrency exchanges. It supports a bunch of coins that other exchanges support. It generally has good volume across all its pairs, making it ideal for both large and small buyers and sellers.
Bittrex recently launched a new interface, after nearly three years using the same design.
Poloniex used to be the largest cryptocurrency exchange, but lost a lot of users when it had trouble scaling to support a surge of new signups.
The likely path for Poloniex is that is becomes a cutting edge exchange as money from Goldman Sachs and Circle start going towards improving the exchange.
Cryptopia is a cryptocurrency exchange based in New Zealand. It is much smaller than the exchanges listed above, but is targeted at a different type of user.
Cryptopia has a lot of small and obscure coins listed on its exchange. Most of the coins on Cryptopia are only listed on Cryptopia and aren’t listed on the largest exchanges like Binance or Bittrex.
The main thing to know when you’re trading cryptocurrency is:
Do NOT get comfortable leaving your cryptocurrency on an exchange. Ideally you should deposit on an exchange, make your trade, and then withdrawal the coins.
If you can’t do that, at least assume that there is a good chance your account will get hacked.
A cryptocurrency exchanged called Coincheck was hacked for $500 million as recently as January 2018.
Your best option is to store your coins on a hardware wallet like the Ledger Nano S. The Nano S supports the most coins out of any of the other hardware wallets.
If you can’t buy a Nano S, Exodus wallet is a solid desktop wallet that supports a lot of coins. The main issue with Exodus is that it is not open source.
The best fiat cryptocurrency exchange for beginners is probably Coinbase. I say this for a few reasons:
The best pure cryptocurrency exchange for beginners is probably Binance. The main reasons are:
If you’re still unsure, this video goes deep into which exchange might be best for you:
I realize I’ve mentioned Binance a bunch already, but it’s also likely the best exchange for day trading for a few reasons.
Day traders make a lot of trades, and Binance has the lowest fees among all exchanges (like Bittrex, Poloniex, etc.).
Binance has the most liquidity of any exchange. You can get in and out of coins fast at good prices.
Among pure crypto exchanges, Binance has the lowest fees.
For exchanges that deal with credit cards and bank transfers, Coinbase (broker), GDAX (exchange) and Bitpanda (broker) have the lowest fees.
How much personal information does the exchange require? Do you need to upload a picture of your ID?
How much can you buy? If you plan on buying a large amount, does the exchange support this much in exchange?
There are also sometimes withdrawal limits on exchanges that limit how much you can withdraw at once. This can be annoying since if you deal with large amounts you will have to withdraw small amounts over a few days.
OTC markets are available for buying large amounts of Bitcoin, but these markets are yet to appear for other coins for now.
How much does the exchange charge for converting your money? And how does this fee compare to other similar exchanges?
The average fee for credit card buys are about 4%. Bank transfer buying fees are usually 1-1.5%. Compare the rates of any exchange to other similar exchanges.
Cash fees are usually 1%, although there is often a 5-10% premium. This is especially true at ATMs, where there is always a premium.
How fast will your coins be delivered? Note that most problems with speed are due to the legacy banking system and not with cryptocurrency.
Credit card buys are often instant. Bank transfer buys can take days to clear. Cash buys are instant but you have to physically move and can’t do it online.
How long has the exchange been around? Is it regulated? Many exchanges have been scams in the past, so research any exchange before you deposit money with them.
The main difference in the crypto exchanges is that some require you to deposit money, while some “instant exchange” your money.
If you have to make a deposit, then you are at much bigger risk of losing money than if you use something like Changelly where there is only a small window of time before your exchange goes through.
The main benefit to using an exchange like Changelly is that if the exchange scammed someone, it would be announced soon and all deposits would stop going into Changelly.
With deposit exchanges, they have lots of customer funds stored and can exit scam at almost any time. We are not saying that all deposit exchanges are scams, but simply that there is more risk when you use this type of exchange.
Check if the exchange is regulated. If it has a history of hacks, be careful!
Check if the exchange has good customer support and is responsive to support requests.
Check if the exchange has been around for a good amount of time and has built a solid reputation. BTC-e is one of the oldest exchanges. Its owner are anonymous, but it is one of the most trusted exchanges because it has good support, has never been hacked, and has never run away with customer money. That could change at anytime, obviously.
As mentioned earlier, NEVER STORE YOUR COINS ON AN EXCHANGE! If you do not have the private keys to your coins, they are not yours. Simple as that.
Make sure you get a secure crypto wallet and use that to store your coins. Hardware wallets cost money but if you are serious about secure storage of your coins they are simply a must have. We hate to see people lose money in crypto! Take responsibility.