Cryptocurrency is one of the best investments of our time. It has proven to be a safe haven for investors who are weary about the state of global markets and their traditional fiat currencies. However, with so many exchanges out there, it can be hard to pick which ones are best for you. In this blog post we will discuss best cryptocurrency exchanges in 2021!
What Is a Crypto Exchange?
A crypto exchange is a platform on which you can buy and sell cryptocurrency. You can use exchanges to trade one crypto for another — converting Bitcoin to Litecoin, for example — or to buy crypto using regular currency, like the U.S. Dollar. Exchanges reflect current market prices of the cryptocurrencies they offer. You can also convert cryptocurrencies back into the U.S. Dollar or another currency on an exchange, to leave as cash within your account (if you want to trade back into crypto later) or withdraw to your regular bank account.Reading more: time.com
There’s no one crypto exchange that’s best for every user. When you get into crypto market, it’s advised to focus on your goal. You may just want to buy some coin and hold for long time investment or you want to trade daily with margin or leverage.
How Does a Crypto Exchange Work?
A cryptocurrency exchange acts like an intermediary – a brokerage firm – between a buyer and a seller of cryptocurrency. It allows a buyer to deposit money using several methods like direct bank transfer, UPI, using debit or credit cards, etc. It charges a set commission or fee for every transaction done using its services.Read more: ndtv.com
A crypto exchange, also referred to as a virtual currency exchange, is a type of website that allows customers to purchase cryptocurrencies using conventional fiat currencies or alternative cryptocurrency assets. Depending on the country in which it operates, customers can make trades that are processed by either a real or virtual currency. Using an online platform that is typically hosted by a third party, customers can buy or sell different types of coins and tokens.
The process begins with the customer making a fiat currency deposit into the account of the exchange. This allows them to purchase cryptocurrencies using their existing funds. The purchased cryptocurrency is held in an online “wallet” controlled by the exchange during the duration of each trade; these wallets are protected by different types of cryptography. The buyer can then sell their cryptocurrency at a later point in time, usually finding another customer to make the purchase or selling back to the exchange for fiat currency. This is essentially how most exchanges operate today – but some are beginning to introduce additional features which allow for greater flexibility and control.
Crypto Exchanges vs. Cryptocurrency Brokers
Crypto exchanges that offer fiat currency payment methods are sometimes confused with cryptocurrency brokers. The two, while similar in some ways, work very differently and serve different customers. A crypto exchange will typically sell a wide range of coins or tokens to anyone able to make the purchase in the country where it operates, accepting fiat currencies or alternative methods. A crypto broker, on the other hand, will usually work with a specific type of coin, only selling one cryptocurrency to its customers and accepting payment in that same currency.
Crypto exchanges allow for trading between different coins (for example BTC/ETH), while brokers focus their attention on pairs involving fiat currencies (for example BTC/USD) or a single coin (for example ETH). Brokers also allow for cryptocurrency purchases with credit cards, bank transfers and alternative payment methods. Crypto exchanges do not offer this level of flexibility – although some brokers impose their own trading restrictions, such as low daily purchase limits or mandatory account verification.
Account Types at Cryptocurrency Exchanges
Rather than being all-inclusive marketplaces, many crypto exchanges have a selective list of cryptocurrencies they will trade in. This is typically done to minimize the legal and compliance risk. Most exchanges offer a single type of account for their customers. These are usually referred to as either ‘basic’ or ‘verified’ accounts. Basic accounts are offered to all customers and allow for a certain amount of trading without requiring any form of enhanced verification. Additional documents, such as bank statements or government-issued IDs, grant access to basic account features.
On the other hand, verified accounts require the customer to submit their identity documents in order to proceed with a transaction. This allows exchanges to operate with greater compliance and ensures that they remain fully on the right side of the law. The amount of identification required varies between exchanges, but typically includes government-issued ID, proof of address and recent utility bills. This information is then stored in order to comply with Know Your Customer (KYC) regulations.
How Do I Open a Crypto Exchange Account?
While not every cryptocurrency exchange set up is exactly the same, there is a general registration process that tends to be rather similar at each crypto trading platform. Coinbase is a fantastic exchange for beginners who are looking to start buying cryptocurrency. You can read through our comprehensive reviews of alternative exchanges to Coinbase on our best cryptocurrency exchanges listings page.
The sign-up process usually goes something like this:
First, you will need to provide a small bit of personal information, which could be nothing more than a name and an email address. The exchange will then send you an email to confirm that you are in control of the associated address.
You will then need to add a payment method that can be used as a mechanism for deposits and withdrawals.
For some users, the above three steps will be enough to get the job done. However, depending on the exchange, and the level of your engagement, you will need to go through a more extensive “Know your Client” (KYC) process, which is really just identity verification.Reading more: cryptovantage.com
As written above, if you want to trade larger, then it’s best that your information gets verified. Different trading tiers are available for users based on how much data the exchange has collected about them and an address or phone number could be required as well in order have access at all times when needed!
What’s Next for Crypto Exchanges?
Cryptocurrency exchanges are starting to introduce additional features that will allow them to grow in popularity. Some of these include margin trading, short selling and stop-loss orders. Leverage is an important element for day traders who want to use borrowed money to make a profit on their investment. Stop-loss orders allow customers to set a price at which the market should automatically sell, minimising losses. As regulatory systems are starting to improve across the globe, other changes are also taking place that will help exchanges operate more effectively.
Cryptocurrency exchanges are no longer just trading platforms – they’re becoming full-service financial institutions. The next step for many of these companies is to launch their own token sales as a way of financing their continued expansion. In some cases, tokens will be used as part of the exchange’s native incentive program, rewarding users for offering liquidity to the platform or performing other tasks that require them to hold large amounts of certain cryptocurrencies. Other platforms are likely to issue utility tokens that can be used to pay transaction fees or, in the case of decentralized exchanges, be used to power smart contracts.
The move into token sale funding is an important step for cryptocurrency exchanges as it provides them with the capital they need to thrive (and survive) in a rapidly evolving crypto market. From professional forex traders to casual day traders and long-term investors, there is a type of account offered by cryptocurrency exchanges that can meet the needs of anyone looking to buy or sell cryptocurrency.
The Best Crypto Exchanges
What will be the best cryptocurrency exchanges of 2021? I can’t say for certain, but I do know the top two. As we speak, these are some of the most popular places to buy and sell cryptos like Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC). They are ranked according to average daily trade volume, with BTC as a reference point. Coinbase and Binance are the most popular, with over $1.5 billion worth of cryptos traded per day on each platform.
Coinbase is by far the world’s most popular cryptocurrency exchange. It has served over 20 million customers in more than 32 countries. At a time when cryptocurrencies are redefining global finance, Coinbase has become a leader in the industry by making Bitcoin and Ethereum more accessible to everyone.
Coinbase was founded six years ago and is headquartered in San Francisco, California. Since its inception it has raised $217 million from some of the world’s leading venture capital firms such as Andreessen Horowitz, Union Square Ventures and the New York Stock Exchange.
Today Coinbase is more popular than ever with its customer base growing by leaps and bounds. Coinbase charges a fee for trading on its platform that varies according to volume. Fees are as low as 0% for traders who buy or sell $10 million or more in digital currency a month. The same fee structure applies for U.S. Dollar deposits and withdrawals with the lowest rates at 1%.
In addition to offering services in 32 countries, Coinbase is one of the leading platforms for Initial Coin Offering projects where they have helped launch more than 40 tokens including EOS, OmiseGo and BAT. In 2021, Coinbase will continue to play a major role in the industry as it seeks to become one of the first truly global cryptocurrencies.
#2 – Binance (China)
Binance is an exchange platform with its own coin, BNB, with which you can pay extra fees when making transactions on the platform. It was founded by Changpeng Zhao, a former Blockchain angel investor and the Head of Development at OKCoin.
As the world’s largest digital currency trading platform, Binance has become popular for its short selling feature which offers traders quick access to cryptocurrencies with BTC or ETH. This is similar to margin trading on traditional online forex exchanges where traders are able to place large amounts of capital in high-risk trades with the chance for extremely high rewards.
Binance is headquartered in Shanghai, China but its servers are located worldwide. This helps it provide faster service to customers than centralized exchanges like Coinbase which must process requests through a single location where activity can be monitored and blocked by local regulators at any given time.
Binance charges zero fees for BTC trading or withdrawals, but it does require you to hold at least 2,000 BNB tokens before becoming a verified member. The current price of BNB is about $11 per token with 18 million in circulation. Each quarter, Binance uses 20% of its profits to buy back and then burn BNB, thereby further reducing the total supply.
In 2020, Binance plans to create its own decentralized exchange called Binance Chain that will be used for trading digital assets and issuing new tokens. After the transition is complete BNB tokens will remain in use as they are linked to a discount rate on transaction fees.
#3 – Gemini (United States)
Gemini is a cryptocurrency exchange created by the Winklevoss twins, who are known for suing Mark Zuckerberg after claiming he stole their idea for Facebook. Gemini is regulated by the New York State Department of Financial Services which allows it to offer customers FDIC insurance on their USD deposits.
Gemini covers both the buy and sell sides of the digital currency market by providing investors with access to daily auctions on its platform. These unique auctions help determine the exact price at which a cryptocurrency must be bought or sold. Gemini’s auction process can be used to execute high-volume trades that pass through multiple trading venues as well as large blocks of coins that would otherwise disrupt the market price.
Gemini was one of the first fully regulated exchanges to offer trading in all four cryptocurrencies, including Ethereum and Bitcoin Cash. It currently offers lower fees than its competitors at 0% for direct USD deposits while charging a small fee for traders who purchase coins on the platform with debit or credit cards. The current daily volume of the Gemini exchange is about $12 million which makes it a rather small player in the global cryptocurrency industry.
While the Winklevoss twins have announced plans to create a regulated Ethereum exchange, there’s still no official word on when this might happen. However, they do offer two products that allow traders and investors to easily buy and sell ETH at any time.
#4 – Huobi (China)
Huobi is currently the largest cryptocurrency exchange in China with more than $200 million of daily trading volume. It was founded by Leon Li who served as the CTO at OKCoin until 2015 when he decided to break off and start his own company.
Of all the exchanges listed in this article, Huobi has the highest number of available coins with more than 190 trading pairs. However, it does charge fees for each trade which can range from 0.2% to 1%.
Huobi is also one of the few exchanges that offers fiat-to-crypto trading pairs with its own token known as HT. Huobi tokens were issued in 2017 and were used to raise funds that would be invested into the development of new trading platforms.
The most popular trading pairs on Huobi include BTC, ETH, ETC and USDT with more than $100 million in volume exchanged each day. The chart below shows daily trading volumes for all cryptocurrencies offered on the Huobi platform.
Bittrex is another US-based cryptocurrency exchange that has carved out a name for itself among traders and investors. It was founded in 2014 by Bill Shihara and two security professionals who wanted to build a world-class security platform for digital token exchanges.
The goal of Bittrex was to offer a simple design and an intuitive interface that would make it easy for traders to buy and sell digital assets. Today, the exchange supports more than 190 cryptocurrencies including Bitcoin, Ethereum, Litecoin and many others. The Bittrex platform also offers high liquidity which is important given the size of some of the transactions it processes.
Bittrex is a cryptocurrency-only exchange which means it doesn’t allow you to deposit or withdraw fiat currencies such as USD, EUR or GBP. This gives the platform a bit of a limited appeal given that most investors look for exchanges that offer both crypto and fiat trading pairs. The company also offers corporate accounts which provide access to additional features including higher withdrawal limits and special pricing.
Bittrex does not offer trading fees which means all transactions are free of charge. The company makes money by collecting a small fee on the coins traded through their platform. This fee is typically 0.25% but can vary based on the coin you’re trading.
The Bittrex exchange currently has a daily trading volume of over $16 million which ranks second only to Poloniex. This makes it one of the largest cryptocurrency exchanges in the world and a very popular choice among traders.
#6 – CEX.IO (United Kingdom)
CEX is a London-based cryptocurrency exchange that was founded in 2013. In the initial stages, the company only allowed users to buy Bitcoin via a credit card or debit card. But, later on they opened their doors to Ethereum and added Litecoin support as well.
In early 2016, CEX.IO started offering Ether trading pairs and have since expanded their services to include Bitcoin Cash, Dash and Zcash. The company claims it has experienced tremendous growth in the past few years with over 2 million users signed up on their exchange.
CEX charges a standard trading fee of 0.2% per transaction which is quite reasonable given that other exchanges charge upwards of 1%. While all transactions are free for bank transfers, the exchange does charge a fee of $2.9 on debit card purchases and $3.9 for credit card transactions (not charged on withdrawals).
The CEX trading volume currently stands at more than $75 million which is not bad considering they operate in only 29 countries around the world. Check out the chart below to see how CEX.IO stacks up against some of its competitors.
The past few years have been very kind to cryptocurrency exchanges and Poloniex has witnessed unprecedented growth as well. Founded in 2014, the company now supports more than 100 cryptocurrencies and remains one of the biggest exchanges in the world when it comes to trading volume.
Poloniex currently supports more than 90 cryptocurrency exchanges including Bitcoin, Dogecoin, Ethereum and Ripple. The company prides itself on its security features which is probably why they continue to rank high in trade volumes even though there are newer platforms with better tech.
The company charges a 0.15% taker fee and a 0.25% maker fee which is considerably lower than where other exchanges are at (most charge between 0.20-0.25%) The exchange also offers an affiliate program that pays 10% of fees to users who refer new members to the platform through their referral links.
Poloniex ranks as one of the biggest exchanges in the world when it comes to 24 hour trading volume. The platform typically sees daily trades in excess of $100 million and has maintained a consistent status as one of the largest cryptocurrency exchanges around.
#8 – Bitfinex (Hong Kong)
Bitfinex is another popular Hong Kong-based Bitcoin exchange that has been around since 2014. The company supports many fiat currencies including USD, GBP, JPY and EUR and allows its users to trade on margin using those different currencies as well.
In addition, the platform offers a number of advanced trading features such as stop loss orders, high / low options and swaps. Bitfinex also employs a peer-to-peer funding market where users can trade using advanced order types like iceberg and hidden orders.
The company currently charges a 0.20% fee on all transactions and supports margin trading. This means there is a certain level of risk associated with cryptocurrencies so it’s best to only invest money you can afford to lose.
#9 – Bitsquare (Switzerland)
Bitsquare is an open-source desktop application that allows you to buy and sell bitcoins in exchange for national currencies or alternative cryptocoins. The platform supports multiple fiat currencies like CAD, EUR, GBP and USD while users can trade cryptocurrencies like Litecoin and many more.
Bitsquare was created by Manfred Karrer and launched back in April of 2015. The platform was developed as a decentralized bitcoin exchange with privacy being one of its main goals. Users do not need to register or provide their personal information which is why it’s difficult to determine whether Bitsquare users are buying or selling cryptocurrencies.
The Bitsquare interface can be intimidating for beginners which is why we do not recommend this platform to traders just starting out. However, if you’re an experienced user, Bitsquare might work well for you because it does provide value since you can trade anonymously and the company does not store any personal data.
#10 – Coinmama (Israel)
Coinmama is a bitcoin broker that specializes in letting you purchase bitcoins using a credit card. The company, which operates out of Israel, has been around since 2013 and is one of the first professional bitcoin exchanges established in Israel.
Since it’s a broker, transactions on Coinmama are quick and easy as there is no verification process involved. You can buy as little as $15 worth of bitcoins per transaction with limits being set to $5k/day and $20k/month. When using a credit card, Coinmama charges 6% fees for purchases made in bitcoin while 5% is the standard rate if you want to purchase via debit/credit card.
You can get started by creating an account on Coinmama and verifying it via email before buying your first bitcoins. The signup process should take no more than a couple of minutes and once you have an account, just add your credit card information and buy bitcoins.
The Bottom Line
If you are looking for the best exchanges to buy cryptocurrencies in, then check out these top 10 cryptocurrency exchange sites. They have been ranked based on their ratings and reviews online. The list is updated regularly so be sure to bookmark this page to get up-to-date information about which crypto exchange site is currently rated number 1. Happy trading!