Indeed, cryptocurrency exchange investment will bring enormous profits. But deciding on the best cryptocurrency exchange is a bit difficult for many people. There are many different options out there, each with its pros and cons. This blog post will discuss the cryptocurrency exchange type, the top cryptocurrency exchange, and the factors you should consider while choosing them.

1. Cryptocurrency is a digital currency that can be used to buy and sell
goods and services. The value of the cryptocurrency has been steadily
increasing, which means it’s an excellent time to trade in your
traditional currency for some crypto cash.
CHOOSING THE BEST
CRYPTOCURRENCY
EXCHANGE — OPTIONS AND
HOW TO CHOOSE THE BEST
By Sidharth January 5, 2022 16 Min read In Tech News
/ / /
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2. According to a survey, cryptocurrency’s market size will reach $1087.7
million by 2026 and Bitcoin alone had a market capitalization of
$1072.21 billion on February 21st, 2021.
Indeed, cryptocurrency exchange investment will bring enormous
profits. But deciding on the best cryptocurrency exchange is a bit difficult
for many people. There are many different options out there, each with
its pros and cons.
This blog post will discuss the cryptocurrency exchange type, the top
cryptocurrency exchange, and the factors you should consider while
choosing them. So, let’s get started.
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3. TYPES OF CRYPTOCURRENCY
EXCHANGES
There are two main types of cryptocurrency exchanges: centralized and
decentralized.
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4. (A). CENTRALIZED EXCHANGE
A centralized exchange is run by a company, which has complete
control over your funds. It allows users to buy and sell cryptocurrencies
using fiat currencies (like the dollar). These exchanges are popular
because they’re simple for beginners, but many people dislike them
because of their lack of transparency regarding storing other users’
funds.
(B). DECENTRALIZED EXCHANGE
A decentralized cryptocurrency exchange allows users to trade
cryptocurrencies directly with each other without an intermediary.
These exchanges are more private because they don’t store user
information, thus making them famous for trading illegal goods and
services. However, these platforms have been known to lack liquidity
due to low volumes on their books.
TOP CRYPTOCURRENCY
EXCHANGE OF MARKET
1. COINBASE
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5. Coinbase is one of the most popular cryptocurrency exchanges because
it’s simple to use and allows users to buy cryptocurrencies using fiat
currency (like the dollar). It also has a mobile app that makes buying,
selling, sending, and receiving digital currencies easy.
It supports Bitcoin, Bitcoin Cash, Ethereum Classic, Ethereum & Litecoin.
Fees are around 0.25% to 0.50%.
It is one of the most popular exchanges used by beginners because it’s
easy to use and offers high liquidity, which means that there are always
buyers and sellers for cryptocurrencies on its books. The company has
also recently rolled out Coinbase Commerce, allowing merchants to
accept cryptocurrency payments in Bitcoin (BTC), Bitcoin Cash (BCH),
Ethereum (ETH), and Litecoin (LTC).
People who trade on Coinbase are required to verify their identity. The
company follows strict regulations, which means that it only deals with
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6. fiat currency for legal purposes. As a result, your transactions can take
some time to be approved by the site.
Pros:
Easy to use for beginners
Offers high liquidity and low fees.
Cons:
-Only offers Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) & Bitcoin
Cash(BCH)
Slow verification process because it follows strict regulations.
2). GEMINI
Gemini is a New York-based exchange that only deals with Bitcoin and
Ethereum. It’s one of the few cryptocurrency exchanges, which allows
users to make withdrawals in fiat currency (like U.S. dollars). The
company also offers FDIC insurance on all deposits up to $250,000 per
user.
People who trade on Gemini are required to verify their identities
because it follows strict regulations.
Pros:
Allows users to deposit and withdraw in fiat currency (U.S. dollars)
Offers FDIC insurance on all deposits up to $250,000 per user.
Cons:
-Only offers Bitcoin (BTC), Ethereum (ETH) & Litecoin (LTC)
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7. Requires users to verify identities because it follows strict
regulations.
3). SOFI
SoFi is a financial services company that has recently launched its
cryptocurrency exchange. It’s an easy-to-use platform, which offers high
liquidity and low fees for users who trade in multiple cryptocurrencies
like Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) & Dashcoin.
People who wish to make deposits or withdrawals on SoFi must verify
their identities because it follows strict regulations.
Pros:
Offers high liquidity and low fees for users who trade in multiple
cryptocurrencies like Bitcoin (BTC), Ethereum (ETH) &
Litecoin(LTC).
Cons:
-Only offers four cryptocurrency options.
-Requires users to verify identities because it follows strict regulations.
4). WEBULL CRYPTO
Webull is a New York-based cryptocurrency exchange that offers users
up to 300 different digital currencies on its platform. It’s also one of the
few platforms, which make buying and selling cryptocurrencies easy for
beginners because it has a user interface similar to popular stock trading
platforms like Robinhood.
People who wish to buy or sell cryptocurrencies on Webull must verify
their identities because it follows strict regulations.
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8. Pros:
Offers up to 300 types of digital currencies on its platform, including
Bitcoin (BTC), Ethereum(ETH) & Litecoin(LTC).
Easy-to-use for users who have experience with popular stock
trading platforms like Robinhood.
Cons:
-Only offers cryptocurrency options.
-Requires users to verify identities because it follows strict regulations.
5). ROBINHOOD CRYPTO
Robinhood is a financial services company that offers zero-fee
cryptocurrency trading to users. It’s one of the few platforms, which
make buying and selling cryptocurrencies easy for beginners because it
has an interface similar to popular stock trading platforms like Webull.
People who wish to buy or sell cryptocurrencies on Robinhood must
verify their identities because it follows strict regulations.
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9. Pros:
Offers zero-fee cryptocurrency trading to users.
Easy-to-use for beginners who have experience with popular stock
trading platforms like Webull.
Cons:
-Only offers four cryptocurrency options, including Bitcoin (BTC),
Ethereum(ETH) & Litecoin(LTC).
-Requires users to verify identities because it follows strict regulations.
6). TRADESTATION CRYPTO
TradeStation Crypto is a platform that’s owned by the well-known online
brokerage TradeStation. It offers cryptocurrency trading for beginners
and professional traders alike. People who wish to buy or sell
cryptocurrencies on TradeStation must verify their identities because it
follows strict regulations.
Pros:
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10. Offers high liquidity and low fees for users who trade in multiple
cryptocurrencies like Bitcoin (BTC), Ethereum(ETH) &
Litecoin(LTC).
Easy-to-use for beginners and professional traders alike.
Cons:
-Only offers four cryptocurrency options, including Bitcoin (BTC),
Ethereum(ETH) & Litecoin(LTC).
-Requires users to verify identities because it follows strict regulations.
HOW TO CHOOSE THE BEST
CRYPTOCURRENCY EXCHANGE?
Choosing the best cryptocurrency exchange can be difficult for
beginners and professional traders alike. Many options are available, but
not all offer the same features, which makes choosing one difficult.
Below, I’ve listed the factors you should consider when choosing the best
cryptocurrency exchange for yourself. Let’s take a look.
1. JURISDICTION
Choosing the best cryptocurrency exchange for you largely depends on
where it’s legally situated. For example, Coinbase is a US-based company
that follows strict regulations and requires users to verify their
identities. It offers three types of cryptocurrencies, including Bitcoin
(BTC), Ethereum(ETH) & Litecoin(LTC).
On the other hand, Gemini is a New York-based company that the
Winklevoss twins co-founded. It follows strict regulations but doesn’t
require users to verify their identities because it’s legally situated in the
U.S. state of New York, which has less stringent policies for
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11. cryptocurrency trading platforms than many other jurisdictions
worldwide. This exchange offers the same four types of cryptocurrencies
as Coinbase does.
Choosing a cryptocurrency exchange that follows strict regulations will
make it easier for you to buy and sell digital currencies. Still, if you’re
located in an area where such policies aren’t enforced, there’s no need to
follow them, resulting in higher fees and slower transaction times due to
increased volume.
2. EASE OF USE
Choosing the best cryptocurrency exchange for you should be easy
because if it’s not, then that means there are too many complex
functions that can potentially make trading difficult.
Many beginner traders find Coinbase to be a good choice because of its
user-friendly interface and simple design. However, some people want
more advanced features, so they choose Gemini instead.
When deciding which cryptocurrency exchange to use, it’s essential to
consider whether you’re a beginner or professional trader because the
features offered by each type of platform will vary. Beginners should
avoid using exchanges that require them to set up multiple trading
accounts. In contrast, more experienced traders who want higher limits
and access to advanced features like margin trading can benefit from
using these platforms.
3. UNDERSTAND LIQUIDITY’S ROLE
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12. It’s essential to choose the best cryptocurrency exchange that provides
ample liquidity for your preferred digital currencies. Liquidity measures
how easily you can buy and sell cryptocurrencies like Bitcoin (BTC) and
Ethereum(ETH) at their current market prices without influencing the
price much.
Choosing an exchange that offers high levels of liquidity ensures that
there will be enough buyers and sellers on the platform to make it easy
for you to buy or sell cryptocurrencies without affecting their prices.
For example, Coinbase offers high levels of liquidity for Bitcoin (BTC),
which means that if you want to buy or sell BTC quickly, it will be easy
because there are plenty of people buying and selling. On the other
hand, SoFi Active Investing is a less liquid platform for cryptocurrencies
like Ripple(XRP). If you plan to buy or sell XRP on SoFi Active Investing,
you might need to wait until someone wanting the opposite has been
found.
Choosing an exchange with high liquidity is essential. Still, it isn’t
always necessary because some exchanges offer low levels of liquidity
for specific cryptocurrencies that most people don’t want to trade in,
resulting in lower transaction fees and faster transaction times.
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13. 4. ASSET CHOICES
Choosing the best cryptocurrency exchange for you should also include
your asset choices and how much money you want to spend on
transaction fees.
While some exchanges like Coinbase and Gemini only offer Bitcoin
(BTC), Ethereum(ETH) & Litecoin(LTC), other platforms such as Webull
Crypto give users access to a wide variety of cryptos, including Bitcoin
Cash (BCH), Ethereum Classic(ETC) and Monero(XMR).
The number of assets available for trading on an exchange will vary
depending on the platform and decentralized or centralized. For
example, decentralized exchanges like EtherDelta don’t have many
assets because they only list ERC-20 tokens.
However, a centralized exchange like Binance offers over 400 digital
currencies. It has a low transaction fee of 0.05%, significantly lower than
the fees on other platforms such as Coinbase Pro at 0.25%.
To find out whether or not an exchange lists your desired
cryptocurrencies, you can refer to their list of supported assets. If the
cryptocurrency you want to trade-in isn’t listed then it’s best not to use
that exchange because there might be a high likelihood of errors
occurring when depositing and withdrawing.
5. TRANSACTION FEES
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14. Transaction fees are a crucial decision factor for most cryptocurrency
traders.
Different exchanges charge different transaction fees based on the asset
being traded, what type of account you have and whether or not you’re a
maker or taker for that particular trade.
For example, if you wanted to sell your Bitcoin (BTC) holdings for
Ethereum(ETH), Coinbase would charge you 1.49% for this transaction. If
you’re a beginner, it’s advisable to use exchanges that don’t charge
transaction fees because these platforms will only take the
cryptocurrency you want to trade-in.
6. TRADING FEES
The exchange charges users for using their platform depending on
whether the exchange is centralized or decentralized.
On centralized exchanges like Coinbase and Gemini, users are typically
charged a percentage of the total transaction amount as fees for buying
and selling cryptocurrencies. These fees can range from 0% to around
1.49%, depending on what you’re trading in and who your broker is.
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15. However, some exchanges charge 0% trading fees, the most notable of
which is Robinhood.
On decentralized exchanges like EtherDelta and Kyber Network, users
are charged gas fees every time they order using Ethereum (ETH). One
thing to note is that these fees can significantly vary depending on
whether or not you’re placing a market or limit order — limit orders on
Kyber Network have a gas fee of 4711, for instance.
There are transaction fees on some decentralized exchanges as well,
such as Bibox and DDEX. For example, the trading fee on Bibox is 0.1%,
which is significantly lower than that of exchanges like Binance with its
0.1% taker fee and 0.05% maker fee.
7. CUSTOMER SUPPORT & USER
EXPERIENCE
Customer support is an integral aspect of any cryptocurrency exchange,
but unfortunately, not many platforms have the best support systems in
place for their users.
It’s easy to find reviews about certain exchanges on social media sites
like Reddit. Still, you should never solely rely on these platforms to
determine whether or not a cryptocurrency exchange is reliable.
As mentioned earlier, customer support can vary depending on what
kind of account you have with the exchange, which cryptocurrencies
you wish to buy and sell, and if you’re a maker or taker.
8. EXCHANGE TRUSTWORTHINESS &
SECURITY
Of course, if the exchange you’re using is trustworthy and provides
secure transactions for its users — but what makes an exchange
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16. reliable?
Some of the main aspects include:
The number of cryptocurrencies supported by the platform. The location
in which it’s registered and whether or not they have a license to trade
users’ chosen cryptocurrencies. Suppose your chosen cryptocurrency is
available for trading on the exchange. If the transaction fees are fair and
what kind of trading pairs they offer users.
With that being said, it’s essential to be wary of exchanges that have
many negative reviews on trusted platforms such as Reddit or those
with a high amount of stolen user funds.
9. CUSTOMER RETENTION
It’s not always easy to retain customers, but some exchanges have been
able to do so because of their reliability and ease of use.
Some examples include Coinbase, Binance, and Bibox — especially
Bibox with its low trading fee and beginner-friendly interface. It is
impressive considering the number of new cryptocurrency exchanges
that crop up every month and their low trading fees.
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17. 10. AVAILABILITY OF THE EXCHANGE IN
YOUR COUNTRY
Not all cryptocurrency exchanges are available in certain countries —
while some platforms like Coinbase and Binance have global reach,
others only work with customers from specific regions.
For example, Huobi users can transact in almost any country except for
the US and China, whereas Cryptopia has several restrictions for its New
Zealand users.
It’s essential to consider your location before signing up for an exchange
that might not be available in your country.
FINAL WORDS
There are many cryptocurrency exchanges available for people who
wish to buy and sell digital currencies. Still, not all of them offer the
same features, liquidity, fees & security, which make choosing one
difficult for beginners and professional traders alike.
Considering the points above will help you determine which exchange
will work best for you, but whether you buy Ripple on Binance or
Ethereum on Coinbase, having a reliable cryptocurrency exchange is
key when trading cryptocurrencies. If you choose the wrong platform,
you could lose your funds — so be wary when selecting an exchange to
work with.
Hopefully, this guide will help you find the proper cryptocurrency
exchange for your trading needs.
If you are a person who wants to go a step further and develop your own
crypto exchange, you can get in touch with a top cyptoexchange
development company and give your dream wings.
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18. Also read: 10 Ways Machine learning Revolutionizes Manufacturing
FAQS
Q- What is a cryptocurrency exchange?
A- A cryptocurrency exchange is an online platform that allows you to
buy, sell and trade cryptocurrencies for other digital assets or traditional
currency like US dollars or Euro. They are like websites where you can
buy stuff using fiat currencies like USD or EUR (Euro) but they also allow
the trading of cryptocurrencies. And most exchanges let you convert one
cryptocurrency into another.
Q- How do cryptocurrency exchanges work?
A- Cryptocurrency trading works differently from traditional
transactions with fiat currencies because digital assets usually don’t
have a centralized institution that controls ownership of the currency.
All transfers are moved peer to peer without an intermediary between
the sender and receiver.
Traditional exchanges are centralized and hold funds within the system
itself; hence when you buy something with dollars, your transaction is
moved directly from your bank account to the merchant. But when you
trade cryptocurrencies on exchanges, you deposit them in your
cryptocurrency wallets linked to the exchange.
Q- Are cryptocurrency wallets the same as exchanges?
A- Cryptocurrency trading happens through exchanges or digital wallets.
While both are important, the latter is more secure.
Q- How to store cryptocurrency?
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19. A- The safest way to store cryptocurrencies is through a hardware wallet
which you can purchase for less than $100 on Amazon, but it’s only
compatible with specific cryptocurrencies. If that doesn’t suit your
needs, you can consider a software wallet that you can download for free
on Google Play, the Apple Store, or the exchange’s website.
Q- What kind of wallets exist?
A- There are four kinds of cryptocurrency wallets: Software Wallets,
Mobile wallets, Web Wallets, and Hardware wallets. The most secure one
is a hardware wallet because it’s offline when you aren’t making
transactions.
Q- Is it safe to keep all my cryptocurrency on an exchange?
A- While exchanges allow you to trade quickly and without hassle,
they’re not the safest place to store your digital assets. Most experts
recommend holding onto your trading coins for a more extended period
than moving them into a hardware wallet.
Q- How do I know if a cryptocurrency is reputable?
A- As it’s still a niche market, new cryptocurrencies are being created
every day, but that doesn’t necessarily mean they’re trustworthy. The
only way to be sure of a coin’s reputation is to look at its reviews on sites
like Coin Market Cap, Bitcoin Talk, Reddit, and other forums.
Q- What is the best cryptocurrency exchange?
A- Like any other investment, it all depends on your needs. Do you need
fast transactions or low fees? Are you looking to buy one currency, or
would you like to trade between different ones? There’s no “best”
exchange, but a few stand out from the pack based on overall user
experience.
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20. LEAVE A REPLY
Q- Is buying cryptocurrency legal?
A- Yes. Buying, selling, and trading cryptocurrencies is perfectly legal as
there are no laws in the US explicitly about them.
Q- How do I know if an exchange is secure?
A- The best way to find out how “secure” an exchange is has nothing to
do with the number of security breaches it’s suffered or how many
phishing websites are created each month pretending to be that site. It’s
all about how the exchange evaluates its security.
ABOUT THE AUTHOR
SIDHARTH
Professional Blogger. Android dev. Audiophile.
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