We took a close look at the features and options of nearly 25 cryptocurrency exchanges, trading apps, and brokerage platforms that let you trade cryptocurrencies.
The trading fees shown for each brokerage or crypto exchange are the fees for the simplest version of the platform with the fewest number of trades.
The data looked at 10 key factors to judge how good each platform was:
The basics of trading Some of the most important metrics were the number of cryptocurrencies that could be traded, the number of fiat currencies that could be used, the exchange’s overall liquidity, and the trading fees.
Features for advanced trading. We checked to see if complex trading features like advanced order types and volume discounts for traders who do a lot of business were available.
Margin trading A look at the margin trading rates, if they apply.
Platform accessibility some of the best cryptocurrency exchanges are available everywhere, but different countries and U.S. states have very different access to different features.
Helping customers There are different kinds of customer service.
Resources for education We looked at what each platform had to offer in terms of educational content.
Credit Card with Cryptocurrency rewards a small number of platforms offer credit cards with crypto rewards.
Safety and storing things. types of storage, security, and insurance, as well as a review of any large-scale hacks that have happened to each exchange over its lifetime.
Bets and Payoffs. Some platforms let users stake certain cryptocurrencies and get paid interest on them.
Loans in Bitcoin Some crypto exchanges let people lend their crypto to other people.
We compared the features and options of the crypto exchanges and brokerages we looked at with these ten variables.
For each ranking, the overall rank of each brokerage or exchange was determined by adding the weighted values of all or some of these key factors. When choosing the best crypto exchanges for beginners, margin trading, platform lending, and advanced trading were not taken into account.
What is a cryptocurrency exchange, and how does it work?
A crypto exchange is a place where digital currencies like Bitcoin, Ether, and Dogecoin can be bought and sold. The way cryptocurrency exchanges work is similar to how other trading platforms work. They give you an account where you can make different kinds of orders to buy, sell, and gamble on the cryptocurrency market.
Some cryptocurrency exchanges offer advanced trading options like margin accounts and futures trading, but these options are less common for U.S. users. Others let you earn interest on your crypto holdings through features like “crypto staking” or “crypto loans.” The best exchanges have ways to learn about crypto, so you can always be up to date.
Different kinds of exchanges for crypto
In general, there are two types of crypto exchanges: those that are centralized and those that are not. Each category has its own good and bad points.
Exchanges in one place
One organization runs centralized crypto exchanges (CEX). Centralized exchanges make it easy to start trading cryptocurrencies because they let users directly change their fiat currency, like dollars, into crypto. Most cryptocurrency trading happens on centralized exchanges.
Some crypto fans don’t like centralized exchanges because they go against the idea that cryptocurrency should be decentralized. Some crypto users think it’s even worse if the company or group makes them follow Know Your Customer (KYC) rules. In order to stop money laundering and fraud, each user must give their name and address, just like when they open a bank account.
Another problem with centralized exchanges is that they can be hacked. With a CEX, the exchange keeps the crypto that is traded on its platform, at least while the trades are going through. This makes it more likely that hackers will steal assets.
In the past few years, centralized crypto exchanges have made their security stronger to deal with this risk. They now, among other things, store most of their customers’ assets offline and buy insurance to cover crypto losses in case they get hacked.
If you like how easy it is to use a centralized exchange, you can lower your risk by moving your crypto to a hot or cold wallet that is not on the exchange.
Exchanges with no one in charge
Decentralized crypto exchanges (DEX) divide up the work of making trades possible and making sure they are legitimate. Anyone who joins a DEX network can verify transactions, which is similar to how blockchains for cryptocurrencies work. This could make an exchange more accountable and open and also make sure it can keep running no matter what happens to the company that made it.
The problem is that decentralized exchanges aren’t as easy to use, both in terms of how they look and how they convert currencies. For example, users can’t always deposit dollars and trade them for crypto on decentralized exchanges. This means that you must already have crypto or use a centralized exchange to get crypto that you can then use on a DEX.
You’ll probably also trade directly with other people. This means it might take longer to find someone who wants to buy what you’re selling, and if liquidity is low, you might have to make price concessions to buy or sell a low-volume cryptocurrency quickly.
The Global Cryptocurrency Markets
There are almost 600 cryptocurrency exchanges where investors can buy and sell bitcoin, Ethereum, and other digital assets. But prices, quality, and safety are all very different. Forbes Digital Assets ranked the top 60 cryptocurrency exchanges in the world based on how well they follow the rules.
Cryptocurrency exchange fees
When you buy and sell crypto, you pay two types of fees: trading fees and withdrawal fees.
Trading Fees: Trading fees can be a flat percentage of how much crypto you buy or sell, or an exchange can charge a different percentage for orders that are makers and orders that are takers.
Maker orders are, at their most basic level, orders that add liquidity to an exchange. They do not fulfill standing orders. Takers, on the other hand, take away liquidity from an exchange by filling orders that are waiting to be traded. Depending on the exchange, maker fees are usually a little less than taker fees, but this isn’t always the case.
Even though you should choose an exchange with the lowest fees, it can be counterproductive to focus too much on the details of maker and taker fees. You can’t choose whether your order goes through as a maker or a taker. Instead, you should think about the overall fees and any discounts you can get for trading a certain amount each month or holding the native cryptocurrency of an exchange.
Important: Some cryptocurrency investment apps say they don’t charge any fees, but this isn’t always true. Instead of charging you a flat fee, they charge you a spread, which is the difference between the rates at which they buy and sell crypto. Spreads can end up being much more expensive than a percentage trading fee, and this happens often.
When you take coins off of an exchange, many of them charge fees. This can be a problem if you want to move your cryptocurrency to a safe wallet or to another exchange. Most cryptocurrencies have different withdrawal fees.
If you want to move your cryptocurrency off of an exchange, you should choose a platform like Gemini that lets you make a certain number of free withdrawals.
When you borrow money to use more advanced trading strategies like margin trading, you have to pay extra fees. Exchanges like Coinbase and Gemini are good for beginners because they have features like “quick buy” that don’t cost more. You can avoid them if you know how to buy and sell on the trading platform exchange.
If you use a credit card or debit card to buy something, both the exchange and the company that gave you the card may charge you a fee. So, the best way to buy cryptocurrency is with cash or a wire transfer.
How to Pick a Cryptocurrency Exchange
When choosing the best cryptocurrency exchange for your needs, you should think about things like fees, security, the number of trades, educational resources, and whether or not the exchange has the cryptocurrencies you want to buy.
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