Cryptocurrencies such as bitcoin have slowly taken over the digital financial market, with more and more users having been convinced that cryptocurrencies are the way to go for investments and online transactions alike. In fact, there are over 2,000 different cryptocurrency variations in circulation as of the turn of the new decade, with the estimated total of all cryptocurrencies combined amounting to over $160 billion as of June 2020.
That being said, the cryptocurrency market is being driven by several factors, with one being the cryptocurrency exchange process. This guide will provide a definition of what cryptocurrency exchange is, as well as a list of the most viable cryptocurrency exchange partners with their respective pros and cons.
Feel free to head over to our bitcoin guide as well for a more detailed explanation on cryptocurrencies in general.
What Exactly Are Cryptocurrency Exchanges?
Cryptocurrency exchanges are platforms that allow users to buy, sell and trade their cryptocurrency. In most cases, cryptocurrency exchanges are dealt with fiat currencies (Dollars, Euros, other federal-issued currencies) or another form of cryptocurrency (bitcoin, ether, litecoin, etc.).
There are the main means of exchanging cryptocurrencies, namely: trading platforms, direct trading and through brokers.
Best Cryptocurrency Exchanges in the US Market
Here are five well-known cryptocurrency exchange platforms to consider:
Coinbase is the most well-known cryptocurrency exchange platform in the US, if not the entire world altogether. Many users can attest that Coinbase is the fastest and easiest way to purchase bitcoin in the United States, with the platform accepting various payment methods such as credit card or debit cards, PayPal and bank accounts to name a few.
Coinbase’s transaction fees are also rather reasonable compared to the competition, as the site charges just 3.99% in fees for each bitcoin purchase. A Coinbase Pro Exchange account offers even more advanced features such as limit and stop orders, and margin trading. The Coinbase Pro Exchange account is essential for beginners looking to trade bitcoin more frequently.
- Ease in trading
- High exchange rates
- Well-renowned reputation in the business
- Lack of privacy
- Average transaction speed is five days for bank transfers
With its origins in London dating back to 2013, CEX.io is the oldest cryptocurrency exchange platform in the world with a rather glowing reputation. Their online security and verification process are second-to-none; albeit at the cost of higher transaction fees and cases of hidden fees as well from some users.
- Fast and efficient process
- Strict verification system ensures top-of-the-line security
- Exchanges are often limited to just the top 10 most valued cryptocurrencies in the market
- Costly transaction fees with occasional hidden costs
Binance is a relatively new but fast-growing exchange platform with a wide variety of cryptocurrencies for sale and trade. Transaction fees in Binance are more than reasonable, and their registration process is arguably the fastest there is, allowing users to start trading in an instant.
- Competitive transaction fees
- A good selection of cryptocurrencies for trade
- Lightning-fast registration process
- Lack of account verification makes the platform potentially insecure
- A daily 2 BTC withdrawal limit might hinder certain transactions
Apart from the usual exchange services such as PayPal, credit cards and bank transfers, LocalBitcoins also offers escrow services that link bitcoin buyers and sellers living in close proximity. Their users can meet face-to-face in conducting a trade, opening the option for both parties to deal in cash.
- Quick and simple trading process
- In-person trading requires no personal information
- Fast turnaround time with bitcoin purchases
- Quite susceptible to scams
- Has a certain limit in purchasable cryptocurrency
- Slightly higher fees versus the competition
A cryptocurrency exchange platform with a devout following, Bittrex offers great value for its transaction speed, along with a wide array of acceptable cryptocurrencies for trade. On the downside, beginners might be turned off with the more detailed and complicated interface that the site employs.
- Fixed and reasonable fees
- Quick processing time
- Large number of cryptocurrencies supported
- Difficulty in trading with the platform for newcomers
- Several complaints regarding customer/technical support
Choosing the Right Cryptocurrency Exchange Platform
With plenty of cryptocurrency exchanges to choose from, beginners should take into consideration a handful of factors before trading their digital currency:
Pretty much every single cryptocurrency exchange platform requires a transaction fee for its services. Knowing exactly how much a certain transaction costs is imperative for the wisest of cryptocurrency traders, meaning finding the best deal in the US exchange market is a must.
Legal documentation is often required to verify one’s identity prior to registration and trading on a given exchange platform. The rule of thumb that usually applies is that the more requirements asked of a cryptocurrency exchange, the tighter that platform’s security is or should be.
Proper research on exchange rates across various platforms is advised in order to maximize one’s profits in cryptocurrency trading.
Reputation and Security
A knowledge of the most trusted cryptocurrency exchange platforms will go a long way towards having a reliable platform wherein most if not all cryptocurrency trades can be conducted.
It’s worth noting that there have been previous cases of hacking and theft in other smaller cryptocurrency exchanges. That being said, the most reputable exchange platforms on the market have earned their reputation mostly from security and not just for their cheap transaction fees. It’s also highly advised for cryptocurrency traders to store their digital coins in a personal wallet rather than into just a handful of exchange platforms.
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