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This is What You Need to Know About the Top Cryptocurrency Exchanges

This is not financial advice.

A Quick Cryptocurrency Exchange Introduction

We just passed the midpoint of 2018, and the last 12 months in the world of cryptocurrency have made for an exceptionally wild ride. The number of crypto-related projects has skyrocketed. Price action, for better or worse, is making mainstream headlines. Newcomers are piling into the space.

If you are one of those newcomers or are thinking about becoming one, you may think you know very little or next to nothing about cryptocurrency. However, after investing some time learning about cryptocurrency, figuring out how to get an account at a cryptocurrency exchange or, gasp, actually buying some Bitcoin or Ether – you are likely now the cryptocurrency expert amongst your friends and coworkers.

But how does one even know which exchange to get an account at? Which exchanges are safe and which ones should you avoid? Do certain exchanges carry different legal obligations depending on your location? There are lots of questions to answer before even attempting to get an account at one of these exchanges.

If you're already familiar with cryptocurrency and just want to see our top exchanges, use the quick navigation above to access our easy comparison tables.

top cryptocurrency exchanges with comparison tables

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One important thing to know is that this article is written from an American citizen’s point of view, and there are a couple reasons why that matters.

  • Tax reporting
  • The ability, (or more appropriately the inability), to participate in an initial coin offering (ICO) – the crypto version of an initial public offering (IPO) - that hasn’t been cleared by regulators.

So before sending assets of any kind across borders, consider checking the laws of the land where you claim citizenship.

Things to consider regarding cryptocurrency exchanges

1. Location

Government regulation has crept into the crypto space at a snail’s pace. We’re still in the early days, but it’s not quite the Wild West anymore. Depending on where you and the exchange are located, different verification may be required if you are even allowed to register.

Many exchanges now simply say no to accepting clients from the U.S. due to anti-money laundering and know-your-customer regulations that must be followed by all customers if a single U.S. customer is knowingly accepted.

Other exchanges, like Binance, move their operation from countries with restrictive policies to countries with crypto-friendly regulation. While governments will say they are trying to protect the users, exchanges are in their current locations for a reason – it benefits the exchange. Binance has spent time in China, Japan, Taiwan, and is headed to the crypto oasis that is Malta.

Also worthy of consideration is whether you want your primary language to be one of the exchange’s secondary languages.

2. Security

Track records matter, especially when it comes to money and security. Mt. Gox was an early exchange that had a security breach in 2013, lost customer assets, and sent the price of Bitcoin crashing down the proverbial mountain from an all-time high that wouldn’t be seen again for three years.

Exchange failures happen. Whether it’s fraud, an inside job, hackers exploiting bugs in an exchange, you name it – exchanges have caused heartache to more than a few people, including yours truly (oh MintPal…).

The reward for cracking an exchange is huge. While it seems like a rare occasion when it happens nowadays, the results can still be catastrophic if it happens to an exchange that you keep your cryptocurrency on.

The easy solution: Don’t keep your crypto on an exchange. There are several wallet alternatives. Use one of them.

Fortunately, exchange security has come a long way, with exchanges like Bittrex founded and run by security specialists. That’s hardly the same planet compared to Mt. Gox, which took Bitcoin trading on as an additional offering next to Magic: The Gathering cards.

3. Offerings

What can you buy on the exchange and how can you buy it?

Does the exchange contain a brokerage - a gateway into crypto that allows one to trade fiat for cryptocurrency? Or does a user need to already possess crypto in order to trade on the exchange?

If fiat is accepted, in what form is it accepted?

Often times, exchanges that support fiat do so through bank account transfers or higher fee credit card purchases. Exchanges that accept fiat, especially the U.S. Dollar, fall under heavier regulations than exchanges that deal purely in crypto-to-crypto trades.

4. Volume

Thriving exchanges have the necessary volume to complete trades fairly close to the price point at which they began. However, even on solid exchanges, some cryptocurrencies have very little buying or selling taking place. This can be an especially big problem when trying to exit a cryptocurrency and there aren’t any buyers willing to buy more than a small percentage of what you desire to sell.

To compound the volume problem, some exchanges have gone to great lengths to fake their volume and make it seem like they are the hot exchange because more buying and selling is taking place there. Reputation matters in crypto.

If you’d like to see live volume rankings, CoinMarketCap tracks this and much other useful data. Visit the 24 Hour Volume Rankings page for the current statistics.

5. Trading Options

What types of orders are offered?

Market orders, limit orders, and stop limit orders are pretty common. Less common trading options include the ability to trade on margin or to short a cryptocurrency.

Because regulation hasn’t reached every corner of the globe, there are crypto exchanges where you can still find 100x leverage trading options. Tread lightly.

6. Fees

Some people would argue that investing in cryptocurrencies is nothing more than gambling.

While the technology has potential to disrupt the way business is done in numerous industries, cryptocurrency exchanges have something in common with casinos – the house always wins.

In crypto exchanges, it seems that the house wins big. Really big.

According to Shiraz Jagati, journalist at cryptoslate.com,

“While Deutsche bank raked in an impressive $146 million over the course of Q1 2018, Binance brought in profits in excess of nearly $200 million during the same time frame.

What is even more impressive is that while Deutsche Bank currently has on its roster more than 97,000 employees, Binance works at full capacity with under 200 people and has only been in operation for a little under a year — eight months to be exact.”

Fees vary between each exchange. Some have flat rates. Some have withdrawal fees. Some have rates based on how the order is set up and whether one is considered a maker or taker.

Coinbase sums up their maker/taker situation in a fairly concise manner:
“When you place an order at the market price that gets filled immediately, you are considered a taker and will pay a fee between 0.10% and 0.30%.When you place an order which is not immediately matched by an existing order, that order is placed on the order book. If another customer places an order that matches yours, you are considered the maker and your fee will be 0%.When you place an order that gets partially matched immediately, you pay a taker fee for that portion. The remainder of the order is placed on the order book and, when matched, is considered a maker order. The fee is 0% for that part of the total order.”

7. Customer Service

While the crypto space is still young and evolving, exchanges have a history of wretched customer service.

Whether its an inability to keep up with exploding demand, inconvenient decisions made in response to new government regulations, or simply not getting back to clients for months at a time, if ever, customer service is a glaring weak spot for exchanges, which are the weak spot of cryptocurrencies in general.

If you experience good customer service, please share the good news!

8. Centralization

How does an exchange facilitate a trade?

Do users have accounts and wallets that are located within the exchange? If so, than the exchange can be considered centralized. However, if the users don’t need accounts and utilize their own wallets, the exchange can be considered decentralized. There are pros and cons with both setups.

One can expect performance to be smoother/faster on a centralized exchange and choppier/slower on a decentralized exchange. However, exchanges are constantly trying to leverage the advantages of both to find the perfect arrangement due to the mass of profits at stake for the exchange that figures it out first.


U.S. Based Cryptocurrency Exchanges Comparison

Coinbase

Bittrex

Kraken

Gemini

Poloniex

Robinhood

Founded

2012

2014

2011

2014

2014

2013

Fiat

Yes

Limited

Yes

Yes

No

Yes

Volume Rank*

7

14

9

23

20

N/A

Volume Rank**

19

30

20

50

44

N/A

Fees
(Bottom Tier*)

Maker: 0%
Taker: 0.3%

0.25% flat

Maker: 0.16%
Taker: 0.26%

Maker: 1%
Taker: 1%
Dynamic

Maker: 0.1%
Taker: 0.2%

0%

Pairs

12

287

57

6

98

2

Margin

No

No*

Yes

No

Yes

No

Decentralized

No

No

No

No

No

No

Transferable

Yes

Yes

Yes

Yes

Yes

No

Institutional
Support

Yes

Yes

Yes

Yes

Yes

No

Volume Rank* from exchangewar.info on July 1st, 2018
Volume Rank** from coinmarketcap.com on July 1st, 2018

Non-U.S. Based Cryptocurrency Exchanges Comparison

Shapeshift

CEX

Binance

Bitfinex

CoinEx

Cobinhood

Based in

Switzerland

UK

HK
China
Japan
Malta

Hong Kong

UK
Hong Kong

Caymen Islands

Founded

2013

2013

2017

2012

2017

2017

Fiat

No

Yes

No


No

Yes

Volume Rank*

46

41

3

6

1

32

Volume Rank**

N/A

88

3

8

1

128

Fees
(Bottom Tier*)

~0.5%
+ Miner Fee

Maker: 0.16%
Taker: 0.25%

0.05% - 0.1% trading fee

Maker: 0.1%
Taker: 0.2%

Maker: 0.1%
Taker: 0.1%

0%

Pairs

1653

30

365

234

98

142

Margin

No

Yes

No

Yes

No

Yes

Decentralized

Yes

No

No

No

No

No

Transferable

Yes

Yes

Yes

Yes

Yes

Yes

Institutional
Support

No

Yes

No

Yes

No

Yes

Volume Rank* from exchangewar.info on July 1st, 2018
Volume Rank** from coinmarketcap.com on July 1st, 2018


Featured Top Crypto Exchanges

A popular gateway into crypto, U.S.-based Coinbase has been an onramp into cryptocurrency since 2012.

Coinbase operates like a traditional exchange that can feel like a bank. One can buy cryptocurrency with fiat via a bank account or credit card. Verification can take a while because Coinbase complies with AML/KYC regulations.

Coinbase has been conservative when it comes to adding new cryptocurrencies to their exchange. Currently, they have four from which to choose: Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.

Coinbase also has a trading platform. Formerly known as GDAX (Global Digital Asset Exchange), it has undergone some improvements and is now known as Coinbase Pro. Institutional clients will find Coinbase Prime more suited toward their needs.

Coinbase has cooperated with the U.S. Internal Revenue Service in the past, but did so while also attempting to stand up on behalf of its user base. Beyond that controversy of compromise, Coinbase has a very good reputation.


The next U.S.-based exchange is Bittrex. Founded by security professionals in 2014, Bittrex offers 287 trading pairs. However, the U.S. Dollar (USD) is just now beginning to be one of those pairs for eligible personal and corporate accounts, upon request. The majority of trading at Bittrex has been crypto-to-crypto trading.

Bittrex offers a wide variety of cryptocurrencies and utilizes a flat 0.25% commission (fee) for all trades. Margin trading is not available, however “…we are actively working towards a solution to offer this among many other new features.” was posted on their website LAST July.

Also on their website is their commitment to compliance.  Bittrex accounts require verification, which can take some time to complete.


Our third U.S.-based exchange on the list, Kraken set up shop in 2011. Like Coinbase, cryptocurrency can be purchased with USD as well as other fiat currencies. Once set up and verified on Kraken, users have access to 57 trading pairs with tiered transaction fees depending on the user’s rolling 30-day volume.

Kraken boasts a feature-laden trading toolset that will please advanced users while offering a simple interface for beginners. One of the exchange’s features is margin trading, should one desire leverage up to 5x. Shorting is also available.


Gemini currently has the lowest volume and fewest pairs (6) of the five traditional U.S.-based exchanges. However, a New York trust company regulated by the New York State Department of Financial Services, Gemini is seemingly pushing the boundaries of regulation, aggressively complying with government policies and focusing on creating an arena that is attractive to institutional money.

Expect to jump through all the compliance hoops during the registration process, but also to reap all the security benefits that provide peace of mind which is a valuable commodity in the crypto space. For this reason, Gemini is a viable on-ramp for new cryptocurrency enthusiasts looking to trade their USD for real money – crypto.

While Gemini is secure, easy to use, and respected, the platform’s dynamic transaction fees can add up for traders with lower volume.


The last traditional U.S.-based exchange is Poloniex, which was founded in 2014. While Poloniex is still an excellent option, it used to be one of the premier destinations for finding a wide array of cryptocurrencies and numerous features with which to trade them.

Time has passed, and the legendary Poloniex Trollbox is gone. However, 98 trading pairs are offered, margin trading is available, and the user interface is pretty solid. Users can also lend Bitcoin, and transaction fees are below average.

Circle, which is backed by Goldman Sachs, bought Poloniex in February of 2018 for $400m.


Robinhood is the odd duck of U.S.-based exchanges. Robinhood Crypto, accessible through the Robinhood app, allows for commission-free trading of Bitcoin and Ethereum as well as monitoring of other cryptocurrencies.

However, Robinhood maintains control of any crypto bought, and Bitcoin and Ether bought through the app is not transferable to a private wallet away from Robinhood.

If someone wants exposure to cryptocurrency without actually handling a proper blockchain wallet, Robinhood provides that. A user can fund an account with USD after satisfying AML/KYC requirements and begin trading right away.

Unfortunately, that means the user is also at the complete mercy of Robinhood, which has been around since 2013 when it first began providing users commission-free stock trading.


Our first exchange located outside the U.S. was founded in Switzerland in 2013.  It’s also the first exchange on the list with decentralized elements. No login is required at Shapeshift, the platform doesn’t hold onto the users’ funds, and only crypto-to-crypto transfers can take place.

There are no “transaction fees” on Shapeshift because they are essentially built into the exchange rate. Users pay a small, non refundable Miner Fee to process the transaction between any of the 1653 trading pairs.

Shapeshift recently added Prism to their exchange.
“Prism uses smart contracts on the Ethereum blockchain to allocate digital assets into your own personal asset portfolio. Through opening and closing a Prism with the same Ethereum address, ShapeShift simplifies the investment process, allowing a user to only have to manage one set of keys.”

Learn more about Prism and Shapeshift here.


London-based CEX has been around since 2013 when it began as the first cloud mining operation. An on-ramp for fiat, CEX is accessible from nearly every country in the world, although it is not available across the board in the U.S. Verification with CEX will take a while, so plan accordingly in order to take advantage of CEX’s 30 trading pairs when the time is right.

CEX has tiered transaction fees that are almost exactly the same as Kraken.

The platform has options that make it friendly to beginners and veterans alike.


Binance

#3 in volume and #1 in the hearts of so many crypto traders on Twitter, there’s a reason that Binance, which started in 2017, has had such great success. Malta-bound Binance has paired an incredible cryptocurrency selection (365 trading pairs) with a generous referral program that filled social media with links to Binance.

With some cryptocurrencies being considered securities, that strategy could have an interesting legal end for those who have promoted Binance for the lucrative reward. On a bright note, last month the Securities and Exchange Commission said that Bitcoin and Ether are not securities.

Binance also has low transaction fees of 0.1% or less. However, you won’t be trading fiat or margin trading while on this site.


You want trading options? Bitfinex has trading options. Founded in 2012, Hong Kong-based Bitfinex has 234 trading pairs,  average transaction fees, and all the features.

Unfortunately, if you are a U.S. resident, Bitfinex isn’t interested in implementing the regulations required to support U.S.-based customers. As of late last year, Bitfinex stopped serving its customers from the U.S. and has yet to change their minds.

Interestingly, Bitfinex was hacked in 2016. While security seems to have been fixed, how Bitfinex handled the financial hardship of that security breach has been controversial to this day.

Enough people trust how it was resolved, as Bitfinex currently has Top 10 volume, but Bitfinex is included in this list as an example of what to be wary of among established exchanges, or in the chance that one is not a U.S. citizen.


CoinEx is another fast riser on this list. The Hong Kong-based exchange reportedly has more volume than any other exchange right now. With 98 trading pairs, none of which are fiat, and low transaction fees of 0.1%, CoinEx has quickly risen from new exchange in town in 2017 to boast the greatest volume amongst its competitors.

While CoinEx doesn’t have all the bells and whistles, it has enough variety, low enough fees, and generous enough airdrops of its own token (CoinEx Token) that people keep climbing in, even if top google results for CoinEx ask the question, “Is CoinEx a scam?”


Cobinhood sounds like…Robinhood. It has zero transaction fees, like Robinhood. But Cobinhood is a solid upcoming exchange in its own right, and unlike Robinhood, cryptocurrency purchased on their exchange can be transferred to a wallet.

The Caymen Islands-based exchange does deal in fiat and also has its own referral program. They rolled out margin trading in June 2018 and have 142 trading pairs.

Like the other exchanges that started up in 2017, Cobinhood lacks a track record that the more established exchanges possess after having been around and weathered storms.

The Next Great Exchange?

With overnight successes like Binance, there’s no shortage of hype for the next “game-changing” exchange.

A potentially exciting and upcoming exchange option for those in the U.S. to keep an eye on in the near future is the Legolas Exchange, or LGO Exchange. It’s slated for a 2018 Q3 release.

Legolas Exchange pulls features from both centralized and decentralized exchanges and claims to bypass scalability issues that have plagued other exchanges, while simultaneously increasing transparency. To increase security, clients will need their own hardware wallet to interface with the exchange.

Closing Thoughts

What you consider the best cryptocurrency exchange will depend on your individual needs. Regardless of those needs though, exchanges have been a critical point of failure within the crypto space. It’s better to have access to more exchanges than you need, rather than to depend on one.

It’s also worth repeating, don’t keep your cryptocurrency on an exchange unless you absolutely need to or it’s part of your risk management strategy. A saying from Andreas Antonopoulos bears this out: “Your keys, your Bitcoin. Not your keys, not your Bitcoin.”

If you’d like an introduction to cryptocurrency and why we think blockchain tech is Epoch, or you would like to quickly peruse crypto history, theepoch.org has you covered.

A thank you to the following sites referenced:
https://coinmarketcap.com
https://cryptoslate.com/binance-outpacing-deutsche-bank-in-overall-profit-yield/
https://exchangewar.info/

The above references an opinion and is for information purposes only.  It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

About the communicator

Matt

In addition to contributing to The Epoch, Matt is currently the host of the Evolving Parent Podcast and he coaches any youth sport his kids will play. He's a former US Marine journalist and public affairs specialist who has worked as a contractor in the tech sector for numerous companies. He recently earned a BS in Freshwater Science and Sustainability, but continues learning in multiple fields every day. www.evolvingparent.com


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