Introduction:
Trading cryptocurrencies can be extremely profitable, but there are some factors you’ll want to keep in mind before you begin. Cryptocurrencies are highly volatile and subject to spikes and crashes, which often happen without any warning.
If you’re not careful, your hard-earned profits could be lost in an instant. That’s why it’s important to only use the best cryptocurrency exchanges available today so that you can remain in full control of your investments at all times.
Coinbase
If you're looking to buy some crypto with fiat currency, Coinbase is one of your best bets. The exchange has reasonable rates, no deposit fees, and extremely low withdrawal fees. Even better: Buying crypto with Coinbase costs less than it does on Bitstamp. They also have a pretty seamless user interface that's even good enough for beginner cryptocurrency enthusiasts to use.
If you want to start with some smaller coins like bitcoin or ether, coinbase has those as well. I'm not going to say you should use only coinbase when buying crypto, but it's definitely worth using as one of your first two options (the second being Gemini).
Kraken
Available in North America, Europe, Japan, and Singapore, Kraken offers a wide range of deposit options that support multiple fiat currencies. This makes it an ideal place to buy bitcoins if you don’t have access to your own bank account or wish to remain anonymous when buying digital currency. Kraken supports several advanced order types such as stop-loss orders and limit orders. Like many exchange platforms, users on Kraken must verify their accounts with a photo ID before being able to make any trades.
Once you’re approved, all funding comes from one wallet source (the U.S.-based exchange Coinbase). As a result, there is no additional privacy from exposing your identity here. The downside is that transactions may be slightly more difficult than on platforms like LocalBitcoins where funding can come from other sources (i.e., local traders). However, I do like how Kraken separates all client funds into different accounts based on region—it makes managing personal holdings much easier compared to Coinbase where everything is lumped together into one big pile of money. Finally, Kraken has also begun adding new features recently such as margin trading and market-making which will help expand its overall appeal even further in 2018.
Bitstamp
While there are plenty of good places to buy Bitcoin, if you’re looking to start trading it, Bitstamp is a good place to start. The exchange has been running since 2011 and is based in Luxembourg. Users can trade fiat currencies—dollars, euros, British pounds—against Bitcoin there.
There’s also an option to withdraw your funds as bitcoins instead of fiat currencies, letting you participate in BTC price fluctuations without having to hold any actual BTC. The exchange has low transaction fees at 0.2 percent or less depending on volume.
DAX
For new users looking to make a large purchase, Coinbase has one of the lowest fees available (0.25%). However, there is a trade-off: because Coinbase does not provide liquidity on its platform, it only offers a limited amount of cryptocurrency pairs for each exchange. In 2017, both BTC/USD and ETH/USD were offered; since then, however, both have been delisted due to low volume. You can also trade some crypto pairs on GDAX (the General Exchange) such as ETH/BTC or LTC/BTC.
Gemini
The exchange offers fiat-to-crypto order execution, along with over a dozen different crypto/fiat trading pairs (e.g., BTC/USD, ETH/EUR). The first thing to understand about Gemini is that it isn’t just an exchange: It’s also a broker. That means that you can use it to quickly convert your fiat currency into cryptocurrency at a very low cost—perhaps lower than what you would pay elsewhere.
With access to U.S.-based customers and tight regulations on who can trade on Gemini, it could become a great resource for investors looking to get their feet wet in cryptocurrency without much effort.
Bittrex
Based in Seattle, Bittrex is one of America’s largest cryptocurrency exchanges. Bittrex has a reputation as a long-standing exchange that’s trusted by market experts. The platform supports two types of accounts: Basic (unverified) and Advanced (verified). Do note that Bittrex charges 0.25% fees on all transactions made through its platform, which can be a little steep when compared to some of its competitors.
That said, Bittrex allows for instant deposits with no confirmation delays, meaning you get fast access to your money without having to wait around too long. And as an added bonus: Users can also purchase Bitcoin via in-app purchase functionality.
Poloniex
If you’re interested in coins that aren’t Bitcoin, then you should check out Poloniex. The exchange, established in 2014, allows users to trade more than 100 cryptocurrencies—including popular coins like Ethereum, Monero, Zcash, Dash, and Dogecoin—as well as fiat currencies.
The exchange’s website is notoriously difficult to navigate; if you want a more user-friendly experience (and faster trades), we recommend checking out Bitstamp instead. Unfortunately, it’s an all-or-nothing offering with regard to payment method; you can only deposit cryptocurrency or U.S. dollars into your account at one time using Bank Transfer or Visa/Mastercard credit cards, respectively.
Huobi
A+ It's also known as the people's exchange because it has very low fees (0.2%) compared to its competitors. Users can't make their own tokens, but they can trade Bitcoin, Ethereum, and Litecoin on a tight schedule. There are big traders using Huobi, so there's a good opportunity to build relationships by posting about your experience with them on Twitter or forums like Reddit.
Customer service has been spotty at times though. One of China’s Big Three cryptocurrency exchanges, Huobi is also available in Hong Kong, Korea, Japan, the U.S., Canada, Germany, Australia, Brazil, and more. However, it only offers five trading pairs: BTC/USDT (Tether), ETH/USDT (Tether), BTC/CNY (Chinese yuan), ETH/CNY, and USDT/CNY. Fees range from 0.10% to 0.20%, depending on your order type (market or limit). If you want to deposit fiat currencies such as Chinese yuan or U.S.
Conclusion
Some cryptocurrency enthusiasts prefer to trade on centralized exchanges such as Coinbase or Kraken. These platforms let you buy cryptos with fiat money, including U.S. dollars, as well as sell crypto back into dollars at a predictable price; they also come with perks like free access to a private API, identity theft protection insurance, and customer support.
However, if you’re planning to invest in cryptocurrency over time, it’s probably better to choose an exchange with low fees and a robust payment network so that you can deposit or withdraw funds quickly if you need to convert your crypto back into fiat currency (such as USD). Cryptocurrency is volatile but not in line with stock market levels of volatility.