A cryptocurrency exchange is a crucial ingredient since it provides a way for traders and investors to have a share of the ever-growing cryptocurrency market. However, the best cryptocurrency exchange depends widely on the services and features.
As cryptocurrency gets more and more popular and with more people taking it to be a full-time career, cryptocurrency exchanges have also cropped up each positioning themselves to serve a specific group of these traders.
In this article, we will discuss the factors to consider when choosing the best cryptocurrency exchange. As a bonus, I will give four of my personal favorites and why.
Before we look at the factors, let us clear some few terms along the way. As a crypto trader, there are two trading terms that you should be well versed with- makers and takers.
Takers are virtual currency traders who place an order and it gets fulfilled immediately thus removing liquidity from the cryptocurrency market. Makers, on the other hand, add liquidity to the market because they place orders which are recorded on the order book and take some time before they are fulfilled.
Note that, with the two types, makers enjoy lower trading fees compared to takers
With this out of the way, let us look at…
The factors to consider when choosing the best cryptocurrency exchange
This choice is generally guided by the type of trader you are, institutional, part-time, or full time. Additionally, the country of origin and the type of services you need.
With more than 200 cryptocurrency exchanges in operation today, you can bet a good fit for you lies somewhere. An exchange can either: link buyers and seller, these exchanges have the exchange rates set; connect buyers and sellers (person to person), the traders are allowed to set the exchange rate. Also, there are other exchanges that act as brokers and allow everyone to buy cryptocurrencies from their platform.
Whichever type of an exchange you decide to use, consider these six points:
Each cryptocurrency exchange has reviews from those who have interacted with it. The internet has plenty of information regarding almost each and every cryptocurrency exchange. The best cryptocurrency exchange should have plenty of positive reviews even though it does not necessarily have to be 100%.
Reviews help gauge the reputation of the exchange. If you are a new trader looking to get your feet wet in the cryptocurrency market, combing through forums and asking questions on these forums will save you a lot of headaches when trading on these. exchanges.
2 Country of operation
With governments all over the globe seeking to regulate the crypto market, these regulations have locked most cryptocurrency exchanges in a geographical cage. That is, only users within the prescribed boundaries can trade on these exchanges. For example, the best cryptocurrency exchange in the United States is Coinbase. Even with a U.S profile, it is not accessible in all the States.
3 Payment option
This is another major concern when shopping around for the best cryptocurrency exchange to use. Some exchanges do not support conversion from crypto to fiat and vice versa. If you are looking to buy cryptocurrencies using fiat (government-backed currency), then you need to look keenly on the fine script of the exchange before you sign up.
Cryptocurrency exchanges supporting fiat transactions request more identification documents that those dealing purely on crypto to crypto trading. Uploading identification documents on exchanges will take varying amounts of time before to be verified.
5. Transaction fees
Although transaction fees on exchanges may appear as somewhat similar or standardized, each exchange has its own set of guidelines regarding transaction fees.
6. Listed coins
When choosing the best cryptocurrency exchange, take a look at the number of coins listed. Some of the best cryptocurrency exchanges have only a handful of listed coin. Some may even have less than five while others have in excess of 200 coins listed.
Considering the above factors, below are the four best cryptocurrency exchanges.
This is one of the best cryptocurrency exchange in the world. Originally from China, the exchange relocated due to Chinese government cracking down on cryptocurrency activities in the country. The exchange moved to Japan but later had to relocate to Malta due to regulations.
-Has multiple branches across Asia and recently ventured into the African market.
-Handles more than one billion U.S dollars under a 24-hour trading volume.
-Over 130 tradeable coins
-0.1 percent trading fees
-Has its own coin, BNB.
-Does not support fiat transactions
-No short selling
-No margin trading
Founded in 2012, Coinbase is among the best cryptocurrency exchange in the U.S and accommodates both retail and institutional crypto traders although on different platforms.
-Apart from providing a crypto trading platform, it helps companies provided crypto payment options for their customers.
-Supports fiat transactions
-Available in many U.S states.
-Conforms to regulations
-Does not support short selling and margin trading
-Has a higher purchase fee ranging from 1.49 to 3.99 percent
-Less tradable coins listed
If you need short selling, OKEx is one of the best cryptocurrency exchange to trade with. Based in Hong Kong, the exchange has more than 140 coins listed.
-Has its own coin, OKB, which gives traders a chance to enjoy a discount on trading fees.
-OKB gives holders voting rights into the company
-Allows short selling
-Allows 3x, 10x, and 20x margin trading
-Over $1 billion 24-hour trading volume
-Its not available for customers in Hong Kong, Sudan, Bolivia, North Korea, Ecuador, U.S, and Iran.
Originally from China, Huobi has grown to be among the best cryptocurrency exchange Singapore. It is registered in Seychelles.
-More than 248 tradeable coins
-supports margin trading
-Lower maker/ taker fees
-Offers two distinct platforms – for OTC trading and for advanced traders.
-Higher fees on certain trading pairs
-Not available in the U.S due to regulations
Although there are other cryptocurrency exchanges, the six listed above have passed have been well vetted even on other aspects including security and ease of use. For these reasons, you will also agree that the list is comprehensive.