Even a few years back, serious investors were extremely skeptical when it came to cryptocurrency. But due to the pandemic situation, many individuals have realized the huge potential held by crypto assets. Some of the top organizations have started incorporating Bitcoin, and it is only a matter of time before the rest of the world follows. Today, we will be discussing the top crypto exchanges and what they offer.
Best crypto exchanges comparison
| Name | Deposit Options | Fees (Maker/Taker) | Coins | Fiat Supported |
|---|---|---|---|---|
| Bitstamp | Bank Transfer, ACH, Credit Cards, Crypto | 0.25%/0.25% | 54 | USD, EUR, GBP |
| FTX | Bank Transfer, Credit Cards, Crypto | 0.02%/0.07% | 310 | USD, EUR, GBP, AUD, HKD, SGD, CAD, CHF, BRL |
| OKX | Bank Transfer, Credit Cards, Crypto | 0.08%/0.1% | 344 | USD and 30 more |
| Coinbase | Bank Transfer (Wire ($10), ACH), Credit Card (3.99%) | 1.99%/1.99% | 116 | USD, EUR, GBP |
| Kraken | Bank Transfer (FedWire, SEPA, SWIFT) | 0.16%/0.26% | 69 | USD, GBP, EUR, JPY, CAD |
| Changelly | Crypto, Prepaid Cards, Virtual Credit Card, Debit/Credit Card | 0.5%/0.5% | 90 | USD, EUR |
| Bittrex | Crypto, SEPA, Wire Transfer, VISA | 0.25%/0.25% | 1500 | None |
| CEX.IO | Skrill, QIWI, SEPA, ACH, SWIFT, Mastercard, VISA | 0.16%/0.25% | 70 | USD, EUR, GBP, RUB |
| Binance | Crypto, Credit/Debit Cards | 0.1%/0.1% | 59 | USD, EUR, AUD, HKD, INR |
| Robinhood | Bank Transfer | 0%/0% | 7 | USD |
| KuCoin | Google Pay, Apple Pay, Debit/Credit Card | 0.1%/0.1% | 200 | USD, CNY, IDR, VND, CAD |
Crypto exchange definition
Crypto exchanges are like marketplaces for digital currencies. Here, you may connect with other individuals and deal in crypto coins. Some exchanges also allow you to buy coins directly from them. The majority of exchanges have order books where you can conduct your transactions at fixed rates. While some give you full control over your assets, others hold them for you and give you limited access to private keys.
How do crypto exchanges make their money?
Many exchanges don’t have monthly subscription plans, but this does not mean you can use their services completely free of cost. They generate revenue from different sources, such as the ones below.
Deposit fees
When you transfer assets into your account, you need to pay a fee. By depositing money, you initiate a purchase operation. There is an extra amount to be paid if you are a margin trader. Some platforms require you to deposit a certain amount of money as a part of the authentication process. This fee varies from exchange to exchange.
Trading commissions:
Since the exchange acts as a link between the two parties, you need to pay a certain sum of money for its services. Usually, the trading commissions are not too high for most exchanges. Due to this, the volume of trades conducted through them has increased greatly in recent times. The best cryptocurrency exchanges have immense trading volumes and thus make a lot of money through commissions.
Withdrawal fees
Similar to a brokerage firm, you need to pay a fee when you withdraw coins. It is usually a small amount, but all exchanges do not ask for the same amount. Some of them give you an option. You can pay a fixed amount for each withdrawal or a certain portion of the transferred amount.
Listing fees
When an exchange is launched first, its trading volume won’t be too high. Due to this, they have to find other ways to make money apart from commissions. Therefore, some of them list coins and tokens and collect money from safety token bids and initial bids. Although many platforms have generated large revenues through the listing, the competition is quite tough.
Market making
This refers to the activity of generating fees for a particular asset. Market makers purchase or sell coins at their exchange, usually lowering the price relative to other platforms. After closing the order, you conduct another trade with the goal of offsetting the last one. This way, you can earn money from the price difference. For driving sales, exchanges often use IEO modules.
ICO (initial coin offerings)
This is a technique used by exchanges for financing their projects. The main objective is to raise money through crowdfunding. Here, the exchange releases its own tokens, and traders can purchase them using regular currency or crypto assets. These tokens often represent unreleased shares, and sometimes, they don’t have a fixed value. It is extremely risky to invest in ICO, and you stand to lose a lot of money if things go sideways.
IEO (initial exchange offerings)
Many startups and small organizations raise money in exchange for tokens. Exchanges sometimes sell tokens to them, and the individuals issuing them need to pay an amount for carrying out the transactions. This amount includes the sales percentage as well as the listing fee. For issuing tokens, a trader needs to create an account and possess sufficient assets.
STO (security token offering)
Although STOs bear some similarities to ICOs, they are usually government-regulated and thus need to follow some strict regulations. There are no middlemen involved, so the initial investment is quite low. Because of the regulations, there are fewer chances of fraud. The securities are supported by the interest, profits, and assets of the organization.
How to choose the right exchange to trade with?
Since there are so many fraud companies in the crypto industry, you need to be very careful while choosing a crypto exchange in the USA. Here are some of the factors you need to consider:
Security
Since you will be sharing your sensitive personal data with the exchange, you need to make sure it has adequate security measures. The majority of exchanges require you to submit identity proof before you can conduct trading operations. In the USA, the FinCEN is a regulating body that monitors exchanges, and you should choose one that is authorized by the same.
Tech
While some exchanges use high-end technology, others have basic features that are suitable for beginners. Some of them require you to pass a two-factor authentication when logging in. This makes it less likely that a hacker will get access to an account. Most platforms use the HTTPS protocol to protect themselves against cyber attacks. There have been multiple instances of exchanges getting hacked, so you should pay attention to the technology factor.
Liquidity
When you have liquidity available, you can conduct trades without causing major market movements. Thus, your exchange of choice should have a high enough trading volume. For this, there must be a large number of individuals signed up on the exchange, and they must have adequate assets at their disposal. The crypto market often turns highly volatile, and without liquidity, you can cause drastic price shifts.
Location
Not all exchanges are available everywhere. Governments have recently imposed strict rules after the cryptocurrency boom, and some jurisdictions will not allow you to access certain exchanges. Thus, you should always make sure the platform you choose has the required permission to operate in your region.
What are fiat to crypto exchanges?
If you’ve never used a cryptocurrency exchange platform before, you might find it difficult to convert fiat currency into crypto coins. You should note that not all exchanges allow you to perform this conversion. If you don’t hold any crypto assets whatsoever, you ought to register on fiat to crypto exchange.
At these places, you can buy your first lot of crypto coins using regular currency. There are different payment modes available at these exchanges, such as bank transfer, credit card, and debit card. Some platforms only allow transactions via crypto coins, so they are not ideal for first-timers.
Centralized vs. decentralized exchanges
Centralized exchanges have their own infrastructure, and they manage supply and demand using private servers. There is a centralized body that manages the transactions, and traders have limited control over their crypto coins. Conversely, decentralized exchanges are where you can directly conduct trades with another individual. You don’t need to obtain any permission, and there is no middleman involved. Thus, you have a greater degree of control over your assets.
Decentralized exchanges generally maintain a higher degree of transparency compared to centralized exchanges. They cannot declare fake trading volumes, and you can easily view the source code. Centralized exchanges are better suited for novice traders since they do most of the heavy lifting. They have user-friendly interfaces, unlike decentralized exchanges that have complex functionalities. Because there is a central authority, centralized exchanges always have a steady supply of coins. On the other hand, decentralized platforms often struggle with liquidity.
When it comes to execution speed, centralized exchanges have the upper hand. But since the trading volume is higher, hackers are more likely to target them. With decentralized exchanges, you have full ownership of the keys and don’t need to pay charges for the transactions.
What makes an exchange extra secure?
While most exchanges have a two-factor authentication process, this is not enough when it comes to ensuring the security of the customer’s data and funds. The safest crypto exchange should have an upgraded authentication process where the user has to enter a special code.
Another common security feature is a multi-signature where there are multiple keys for a wallet owned by different individuals. Thus, you can access the money only if you manage to acquire all the keys. Some platforms store the users’ money in cold wallets that are not connected to the internet.
Do all exchanges accept credit cards or bank transfers?
No, not all exchanges allow you to deposit money using bank transfers and credit cards. Thus, if you prefer using these modes, you should make sure the exchange supports them. Generally, it is not a great idea to use credit cards because some exchanges ask for extra fees, and there are no rewards to be won.
10 best crypto exchanges in 2022
Now you have a basic idea about crypto exchanges and what they offer, it is time to look at the best platforms that are currently operating in the market. Not all exchanges have the same features, supported currencies, payment modes, and coins, so you need to study them individually.
Bitstamp
Bitstamp makes it easy to purchase crypto coins using fiat currency and supports convenient payment modes like a credit card, debit card, and bank transfer. Thus, although it offers a less number of coins compared to others, beginners will find this exchange to their liking. Its basic services include trailing stop orders, stop orders, market orders, limit orders, and instant orders.
Bitstamp has one of the best customer support teams in the business and offers on-call support. The platform has a flat fee, irrespective of order type. Apart from the usual two-factor authentication, it lets you enhance security by activating email confirmations. There is no need to complete identity verification if you are paying using digital assets. However, before using fiat currency, you must complete it.
- One of the oldest crypto exchanges
- Easy to use trading platform
- Great mobile app for Android/iOS users
- Decent trading fees
- Works with TradingView
- Around-the-clock phone and email customer support
FTX
Despite being less than three years old, FTX is already as prominent as more established exchanges like Coinbase and Binance, with more growth opportunities and tokens that are not available on their closest competitors. The platform is a specialist in crypto derivatives ranging from futures to options and industry-first products like volatility tokens.
FTX is regularly ranked in the top 5 by CoinMarketCap for exchanges processing the most trading volume, typically worth a few billion daily. The platform has fair costs across all its services so that traders can focus purely on making profits in the markets.
- Broad choice of tradable markets
- Processes some of the highest trading volume in the industry
- Provides widest range of derivatives in crypto trading
- Staking is extremely easy to use
- Utility benefits offered with FTT
- Reasonable trading fees
OKX
OKX is a Seychelles-based crypto exchange established in 2017. It is the ‘big brother’ to the more straightforward ‘sister’ exchange, OKCoin. Since its inception, the developers behind OKX have been on a mission to ‘build the next-gen financial ecosystem.’
Hence, the exchange continually adds more crypto services to stay ahead of the curve. Presently, the brand provides spot, margin, perpetual swaps, futures, and options, along with a host of DeFi and mining services as icing on the cake.
These qualities have consistently made OKX one of the leading exchanges by trading volume, serving millions of clients in more than 100 nations.
- Vast selection of cryptocurrencies
- No starting balance
- Competitive trading fees
- Has its own utility token
- Mobile app available for Android and iOS
- Offers numerous DeFi services
Coinbase
This is a centralized exchange based in the United States that was founded in 2012. It is a browser-based platform, so you don’t need to download any software program. Here, you can trade in 56 crypto coins using the regular platform, while the Coinbase Pro platform supports three more. The exchange stores the majority of the users’ funds in cold storage, which makes them less vulnerable to attacks.
To purchase or sell crypto coins on this platform, you only require $2. It has insurance that protects your money and an education hub where novice traders can gain knowledge about the crypto market. One of the best things about Coinbase is that it remunerates users for completing the learning courses. In terms of storage, there are two alternatives. You can store your coins on the exchange server or on Coinbase Wallet, where you have sway over the private keys.
Kraken
Since there is no history of Kraken being hacked, many investors consider it the most secure crypto exchange. It is present in almost 200 countries and lets you trade over 80 crypto coins. Kraken has excellent functionalities for futures traders and allows you to borrow as much as 50 times your account balance.
If you need to trade in huge volumes, you can use the OTC trading service at this exchange. High-volume traders also get access to 24*7 support, personalized consultation, anonymous trading through a dark pool, and advanced market insights. You can also stake your coins for a certain period of time and earn lucrative rewards. This exchange has margin trading facilities, and if you are a pro-customer, you can borrow as much as $500,000.
Changelly
Because of its low transaction fee, many beginners prefer this exchange. It is also suitable for those who wish to trade anonymously. You don’t need to undergo a verification process to conduct trades on this platform. Also, the exchange does not store your coins, and they remain in your personal wallet. Thus, you can conduct the transactions directly using your wallet.
Another great thing about this platform is that it offers both fixed and floating prices. After placing your order, you will be able to see how long it will take for it to complete. It is also possible to compare the exchange rates for various platforms and get the most favorable ones in terms of transaction time and price.
Bittrex
Bittrex has one of the largest collections of crypto coins. Launched in 2014, it routinely features in the list of best exchanges. Despite its high daily trading volume, the platform is able to execute orders at a fast pace. To use fiat currencies on this exchange, you need to cross a certain verification level. There are three distinct account types, and with Enhanced accounts, you can withdraw a maximum of 100BTC every day.
For every trade you place through this platform, you need to pay a flat fee of 0.25%. It follows KYC and anti-money laundering principles specified by the US government. Bittrex has facilities for anonymous traders, and you don’t need to pay any fees for making deposits and withdrawals. Other features of this platform include personalized support and API integration.
CEX.IO
CEX.IO supports a wide range of payment modes like ACH transfer, SEPA transfer, and bank transfer. It has a brokerage service and a trading platform, and you need to choose between the two while making purchases. While the former is well-suited for beginners, it has high fees. The trading platform has complex functionalities like limit and market orders. It also has high-end reporting features and lets you trade using APIs and a mobile app.
The fees at CEX.IO depend on how many trades you place during a 30-day period. For frequent traders, the fee is much less. Institutional customers can enjoy faster execution via CEX.IO Aggregator. There are four different account levels, with the higher levels offering more payment modes and greater transaction limits.
Binance
Binance is the best crypto exchange in terms of execution speed. It has a large daily trading volume which means it can offer excellent liquidity. Binance allows for futures trading with the competitive maker and taker fees. It has two types of trading views, namely Basic and Advanced. The Basic option is pretty simple, with the chart, prices, and history laid out clearly. The advanced version lets you use complex technical analysis, and it is well-suited to advanced traders.
Binance has an account minimum of $10. It lets you participate in dollar-cost averaging and recurring investments. You can also use limit and market orders to save funds. By staking coins like ALGO, ONE, EOS, and ATOM, you can earn annual rewards.
Robinhood
Launched in 2015, Robinhood is one of the few exchanges with zero commissions. This platform allows you to monitor the prices of 10 cryptocurrencies in real-time. It also lets you purchase fractional coins and make purchases without settling funds. However, you cannot transfer your assets out of the platform and into your own wallet. Institutional traders can also participate in IPO.
Robinhood has recurring investment features. Trading crypto coins through this platform is easy, thanks to the mobile app. It is available in 37 US states and has no history of being hacked.
KuCoin
KuCoin has over a million users and its own crypto coins. You can get a discount on the trading fee by holding these coins. Customers who hold these coins also get a large share of the profit made through trading fees. There are 300 distinct pairs available on this platform, and it costs no fee to make deposits using crypto.
Advanced users can engage in P2P trading via KuCoin. It also lends you earn interest by lending crypto coins. Although anonymous trading is supported by this exchange, you can unlock new features by verifying your identity. It has TradingView integration, so you can use indicators to make more informed decisions. KuCoin also has some features found on decentralized exchanges, like non-custodial trading. This lets you carry our transactions directly from your wallet.
Crypto exchanges: pros & cons
The pros and cons are as follows:
Pros
- Easy to execute orders
- High level of security
- Ability to trade anonymously
- Access to advanced trading tools
- High liquidity
- Lucrative rewards
- No middlemen involved
- Low trading fees
- Control over assets
Cons
- Targeted by hackers
- Loss of privacy
- High volatility
- Country-specific regulations
Best crypto exchanges: conclusion
It is not possible to single out an exchange and call it the best. While some platforms are suited for advanced and institutional traders, others offer basic functionalities and ease of usage, so that novice traders don’t face too many difficulties. Your choice should be based on your level of experience, budget, and profit objectives.