People trade on exchanges directly with other market participants, so the exchange does not sell cryptocurrencies alone. Exchanges allow you to buy and sell quickly and be flexible with your orders. Active trading of Bitcoin and other cryptocurrencies can earn a lot of money thanks to their volatility, but there is an equal risk of losing everything.
Most people on crypto exchanges deal mainly with Bitcoin, but other altcoins are becoming popular too. You just have to trade very cautiously and have an overview over your portfolio. Many traders are trying to actively buy and sell based on price charts. We do not recommend this strategy, exchange fees make active trading expensive, and only a small percentage of traders finish with profits.
It is also important to keep in mind that if you have cryptocurrencies stored on exchanges, you do not actually own them. You rely on the fact that they are kept safe by the exchange. This can be dangerous, since exchanges are often hacked. So, keep only minimal funds on exchanges and secure your cryptocurrencies in your wallet.
Now, let’s take a look at the best-known exchanges used by traders to buy and sell not only Bitcoin, but also various alernative cryptocurrencies.
TIP: Registering on exchanges may be time-consuming (due to customer verification), so if you are considering using exchange services in the future, we recommend you create an account on all exchanges listed below at once. Creating an account is free, and if you should ever need it, you will already have it ready.
The most reliable crypto exchanges
NEW! Cryptocurrencies can now be purchased for EUR or GBP on Binance exchange as of January 15, 2019. However, it is necessary to register separately at the branch office of Binance in Jersey.
Binance is a new and fast-growing cryptocurrency exchange with a focus on trading exclusively with cryptocurrencies. They are currently headquartered in Malta. Binance received approximately $15 million via ICO in July 2017. ICO has released its own token, i.e. Binance Coin (BNB), which you can buy on the stock exchange. If you pay business fees using BNB tokens, your currency trading will be cheaper. Moreover, the exchange uses 20% of its quarterly revenues for buyback and burning BNB tokens, thus reducing their number and increasing their value.
By the end of 2017, Binance had become perhaps the most successful cryptocurrency exchange in the world (with a profit of around $200 million in 2017). CEO Changpeng Zhao (we recommend following him on Twitter) has an interesting biography and extensive experience with cryptocurrencies and exchanges.
Binance offers a wide selection of assets. There are more than 230 cryptocurrency pairs and new ones are constantly being added. The disadvantage is that you cannot trade fiat currencies yet, but they are working on it. All altcoins can be bought for Bitcoin (BTC), Ethereum (ETH), or Litecoin (LTC).
Reactions to the Binance exchange are very positive. The exchange operates fast and reliably, and the issues surrounding it were resolutely and transparently addressed in the past. The security of the exchange went on to become legendary in the online community. Binance has far-reaching plans and it wants to run its own decentralized exchange. We should, however, bear in mind that this exchange has been around for only a short time, and there might be further changes in the cryptocurrency market.
Company Coinbase is considered to be the largest Bitcoin exchange in the world and is currently available in 32 countries. GDAX is owned by the same company and acts as a sister trading platform. CoinBase exchange is often recommended to new visitors as one of the easiest ways to get your first bitcoins. GDAX serves as a superstructure for demanding traders. Banking partnerships allow transactions to be made via EFT / ACH / SWIFT / SEPA transfers as well as credit cards or PayPal.
GDAX, short for the Global Digital Asset Exchange, acts as the sister trading platform of Coinbase. The company is headquartered in San Francisco and has been in operation since 2012. Coinbase account owners can use the same GDAX sign-in account and start trading. GDAX offers users to buy and sell cryptocurrencies of Bitcoin, Litecoin, Ethereum, and Bitcoin Cash.
As far as security goes, there have been no major hacker attacks on GDAX or Coinbase. The only thing that raises doubts is the infamous “flash crash” of the Ethereum price. At the time, Ethereum was trading at about $317 a piece, when in a matter of seconds, the price fell to 10 cents a piece, but it quickly returned to normal. In general, however, GDAX and Coinbase are considered to be the leading players in the world of cryptocurrencies.
Warning: Coinbase recently went through a bit of scandal, when information about alleged selling their customer’s data leaked to public.
BitMex does not trade directly with bitcoin, but with so-called futures contracts for the BTC price. This means that BTC is the underlying asset for the contract, similar to the commodity market. As a result, on BitMex you can trade with a financial leverage of up to 1:100, so you can get a 100-fold multiple of each price move.
Example: If you buy a futures contract per 1 bitcoin against the dollar (XBTUSD) with a leverage of 1:100 and the price of the underlying asset (BTC) will grow by $1, you will get a 100 USD profit on this move.
But be careful! This is also true in the case of Bitcoin volatility where a 1:100 leverage can quickly clear your entire trading account. Trading on leverage is recommended only to experienced traders who risk only a small fraction of their capital.
Such active trading with an extremely volatile asset on an extremely large leverage without a clear strategy borders on gambling. The BitMex Exchange also offers sandbox testing trading to newcomers in order not to risk real capital.
TIP: Leverage trading can be effectively used for insurance against price fluctuations (so-called price hedging). For example, if we need to hold more bitcoins than we would like to and we fear that their price will fall, we can get insurance by short selling XBTUSD futures contract (that is, we will earn on the price fall of the BTC), thereby neutralising the loss that the price fall would otherwise cause. Some speculators are using this mechanics to earn profits as well. In any case, we recommend using these tools only to traders who really know what they are doing.
KuCoin is one of the newer and modern exchanges that allow trading with a wide range of cryptocurrencies and tokens. Following the example of Binance, KuCoin has released its own token which allows its holders to get special bonuses, trading discounts, or even direct dividends from KuCoin’s profits.
KuCoin’s goal is to provide investors with a reliable and fast platform, where it can be traded with a lot of assets, including those exotic ones you do not find on other exchanges. Some assets are currently only a little liquid, and investors are advised to stick to the big and proven cryptocurrencies, but sometimes the option to buy less well-known cryptocurrencies may not be harmful.
The exchange is still new, and we do not recommend keeping too much capital on it.
TIP: Before you start trading with alternative cryptocurrencies, study them. Some altcoins may represent a revolutionary technology with great market potential, but although most of them look good at first glance, they are either scam or bring no real innovation, and they are just “copies” of more successful cryptocurrencies.
Kraken is an exchange established in 2011 and is the world’s largest exchange regarding scope and liquidity in the currency of euro. In addition to Bitcoin, we also find popular cryptocurrencies, like Bitcoin Cash, Monero, Dash, Litecoin, Ethereum Classic, Ripple, and EOS.
You can make deposits on the Kraken exchange and choose among four global currencies (EUR, GBP, USD and CAD) to make a bank transfer. For users with a bank account within the European Monetary Union, the SEPA payment system is also supported, making it the ideal choice for the first purchase of bitcoins and other cryptocurrencies.
Kraken, too, gets plus points for a wider choice of cryptocurrencies, liquidity, and security. An advantage for European users is also the connection and support from the German bank Fidor AG.
However, Kraken’s customers complain of an unintentional trading environment and a complicated registration process. Kraken has significantly improved in recent years. Although Kraken has high-level support, phone support is lacking, which greatly prolongs communication with new users.
Bittrex is one of the first and most stable exchanges in the world of cryptocurrencies. The exchange offers many well-established names. All currencies you find here are already in place and traded with sufficient liquidity. Getting your currency on Bittrex is very difficult and you have to meet many criteria. Currencies are offered by the hundreds, and Bittrex allows for exchange against BTC, ETH and USDT. The platform is fast and the interface is simple. Support is slow but can be contacted, not only via the ticketing system, but also on their chat.
This cryptocurrency exchange is negatively associated with groups that, by using their high capital, influence (manipulate) prices of smaller cryptocurrencies for profit and do not allow them to operate.
Bittrex is widely believed to be trustworthy, stable and reliable, but focuses mainly on institutional investors and investors with larger capital starting from $10,000. Small investors are currently not allowed to register.
Coinmate is a Bitcoin exchange registered in the UK, but operates in the Czech Republic. The exchange was founded in 2014. Thanks to its simplicity, security, convenient rates and low fees, it quickly acquired a large number of customers. Czech traders will also appreciate trading in Czech crowns.
TIP: If you want to make purchases without having to register or do not want to trust your cryptocurrencies to the oversight of a centralized exchange for security reasons, we recommend that you read our article about peer-to-peer exchange.
Do not forget that you need to set up an account before doing business well in advance. Verification may take unexpectedly long. The number of cryptocurrency enthusiasts is still growing. Verifying your account or your identity is often complicated, depending on the security level of the exchange.