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. These exchanges allow the direct conversion of US Dollars, Euros, and most government-backed currencies into cryptocurrency.
The second type of exchange are cryptocurrency to cryptocurrency exchanges (C2C), that allow cryptocurrencies to be traded with each other. Crypto to crypto 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.
Here’s some information on some of the most popular fiat cryptocurrency exchanges.
Coinbase
Headquartered in San Francisco, California, Coinbase is considered by many to be the most beginner friendly exchange. It accomplishes this through its beautiful yet simple user interface.
Coinbase is a brokerage, meaning that instead of buying Bitcoin and other cryptocurrencies from other users, you are buying directly from Coinbase.
Coinbase charges 1.49% fees on bank purchases and 3.99% fees on credit and debit purchases. Due to the lower fees involved, it’s recommended to use your bank account when making large purchases.
Coinbase’s fees are on the lower end compared to other brokerages that we will mention later in this guide.
If you sign up to Coinbase using one of the links, you will receive $10 in FREE Bitcoin on your first $100 order.
Why use Coinbase?
You should use Coinbase if:
- You are a beginner cryptocurrency investor
- You like low fees
- You plan on paying via credit card, debit card, bank transfer, or bank wire.
- Your country is supported by Coinbase (United States, Europe, Singapore, Australia)
Coinmama
Coinmama is another beginner-friendly exchange and focuses on credit and debit card purchases. They have instant delivery and sell Bitcoin, Ethereum, Ripple, Litecoin, BCash, Cardano, Qtum and Ethereum Classic to almost all US States, and most countries.
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!
Coinmama’s fees are slightly higher than Coinbase at 5.5% when a credit or debit card is used. Please note that Coinmama doesn’t let you sell cryptocurrency back to fiat currency. This can be done on other mentioned exchanges after purchasing.
Why Use Coinmama?
You should use Coinmama if:
- You plan to purchase cryptocurrency with a credit or debit card
- Your country is not supported by Coinbase
- You have a cryptocurrency deposit address for Coinmama to send purchased crypto to
Bitpanda
Bitpanda, called by some the Coinbase of Europe, is a popular exchange that sells Bitcoin, Ethereum, Litecoin, IOTA, Ripple, and more for US Dollars, Euros, British Pounds, and Swiss Francs.
Bitpanda has a very simple user interface, making it easy for beginners to successfully invest in cryptocurrency.
The exchange has several payment methods such as bank transfers, credit cards, debit cards, Skrill, Neteller and more. Lastly, Bitpanda has 2.99% fees on credit and debit card purchases.
Why Use Bitpanda?
You should use Bitpanda if:
- Your payment method is supported (card, bank, Skrill, Neteller, etc)
- You want to purchase a wide variety of altcoins
- Your country is not supported by Coinbase
CEX.IO
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.
The exchange was affected by a small hack long back but has had no issues for a while. It has over 2.8 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.
Why use Cex.io?
- Your payment method is supported
- You want to purchase a wide variety of altcoins
Kraken
Kraken is another popular United States based exchange. 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.
Why use Kraken?
- You want to trade cryptocurrency on fiat and crypto pairs
- You enjoy low fees
- You want to purchase a wide variety of cryptocurrencies
- Your country is supported
LocalBitcoins
LocalBitcoins offers a peer-to-peer (P2P) exchange. On the exchange, users to trade among themselves individually. Due to the nature of the transactions on the exchange, there is a resolution system and feedback system for traders.
It also 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.
Why use LocalBitcoins?
- You plan to use cash to buy cryptocurrency
- You want to use an escrow service
- You want a more private way of purchasing cryptocurrency
Bitstamp
Bitstamp is one of the oldest Bitcoin and cryptocurrency exchanges being founded in 2011. The exchange is headquartered in Luxembourg. For fees, expect around a.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.
Why use Bitstamp?
- You want high liquidity
- You enjoy low fees
- You want to purchase a variety of cryptocurrencies
Gemini
Gemini Exchange is an exchange based in New York, US. It only trades three currencies: USD, Bitcoin, Bitcoin Cash, Litecoin, Zcash, and Ethereum. It has low fees of around 1%.
The exchange also 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 Zcash. This was a huge addition as Zcash is a privacy-focused currency and very few exchanges allow direct purchases of privacy cryptocurrency.
Why use Gemini?
- You want a secure exchange
- You enjoy low fees
Crypto to Crypto Exchanges
Here’s some information on some of the most popular crypto to crypto exchanges.
Binance
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. The Binance exchange features their own coin, Binance Coin, that allows users to save big on trading fees.
Changelly
Changelly takes a different approach to the exchanging process. 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
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 pretty rare for an exchange with the amount of coins Bittrex offers.
Bitfinex
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
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.
Conclusions
So to sum it all up… 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?
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 number 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 withdrawals, that can be improved by verifying your identity.
