Best Crypto Exchanges: The Most Safe and Easy Picks
If you want to invest, buy, sell, and trade cryptocurrencies you need to get to grips with crypto exchanges and how they work as these are the platforms used to trade.
Crypto exchanges are digital marketplaces. They work much like stock exchanges and other marketplaces, so if you’re familiar with the stock exchange you’ll have no problems getting up to speed with cryptocurrency exchanges.
If it’s completely new to you however, don’t worry because I’m going to take through everything you need to know about the best crypto exchanges in this article.
What Is a Cryptocurrency Exchange?
As I mentioned in the opening, cryptocurrency exchanges are digital platforms where you can exchange cryptocurrencies with other currencies like fiat or other cryptos.
There are already a lot of well-established exchanges if you’re new to crypto trading, and more are emerging all the time.
This means there is plenty of competition keeping the fees low, pushing innovations and more features, and you’ll likely find an exchange ideal for your needs.
It’s not hard to find the best exchange for you once you know what you’re looking for too. Just keep in mind that different exchanges serve different purposes and some will be more suited to the type of trading you want to do than others, as I’ll explain in this article.
As for beginners advice I always offer the following;
- Do your due diligence and make sure you’re familiar with the best trading practices before getting started on an exchange.
- Remember the end goal is for both sides of an exchange to have a fair trade, treat the platform and other traders with the respect you want back.
It’s also worth mentioning that there will be some fees on transactions. This is how exchanges get their cut, I’ll explain later what the different fees are.
How Do Cryptocurrency Exchanges Work?
While the principles of crypto exchanges stay the same across the board, the way each exchange operates will differ slightly from a user-interface and operations standpoint, so keep that in mind.
Generally speaking though, if you’re looking to buy or sell cryptocurrency you start by making a deposit with the exchange or moving your coin over from where it’s stored.
To do this you will need the exchange's wallet address. Once you’ve deposited some currency you can use this balance to make exchanges with other traders.
There are a number of different types of trades or exchanges as I will explain in the next section. As an example however, regular exchanges are the most common type of exchange.
Regular exchanges allow traders to find and trade with each other while having the security and processes of the company managing the platform.
On some exchanges, you can set a price you want to sell for and wait for a match to be made for you, or you can directly make a trade.
What Types of Exchanges Are There?
There are a few different types of exchange to meet the requirements of the user. These are generally separated by how they accept payments.
Fiat to Crypto Exchanges
You’ll likely have to go through a fiat to crypto exchange to invest in some crypto and load up a balance to trade with.
Coinbase is one of the largest fiat to crypto exchanges. You can buy Bitcoin, Ethereum, and Litecoin for cash on their platform, and set up a wallet and start trading.
Crypto to Crypto Exchanges
Exchanges like Binance operate by funding your balance with a crypto and making trades with other coins. Meaning they are crypto to crypto only.
With the growing number of experienced traders holding crypto balances these types of exchanges are growing at a rapid pace
There are also some terms to become familiar with that refer to how the different exchanges operate:
Most people start out with regular exchanges. These operate much like a stock exchange and are user-friendly, quick and easy, and suited for all types of traders.
You can use fiat or cryptocurrencies, most will have a wallet as part of their UI, and the well-established marketplaces are very secure.
They are centralized and managed by a third party. This gives you the added benefit of having some customer support on hand in case you need it.
Peer-to-Peer Exchanges (P2P)
P2P exchanges allow traders to make exchanges with each other without having to go through a third party.
This allows for a lot more freedom. You can set or negotiate prices with other sellers, but there is the increased risk of making bad trades.
P2P exchanges are mostly utilized by experienced traders or those limited to the platforms they can use in their area.
Crypto Brokerage Firms
Another popular platform with new traders is brokerages. Broker marketplaces allow you to buy and sell at a price set by the broker, giving you a simple flat rate to work with.
You can expect to pay slightly higher prices than finding your own trades on an exchange, but it’s a big time saver.
How Secure Are Exchanges?
It seems like every time there has been a hacking incident or breach of security on a crypto exchange it’s made the headlines and moves the market to the bottom.
Don’t let this skew your view on how secure exchanges are. The fact is that hacking incidents are few and far between, and the most well-established exchanges in particular are very secure.
Still, we have to keep in mind that you’re trusting an exchange with your personal details and hard earned money.
There are a few ways you can safeguard yourself as much as possible, these are:
- Store most of your currently offline in cold storage when it’s not needed.
- Only trade on exchanges with a history of good security.
- Keep things secure on your end with your personal PC, keep firewalls up-to-date and so on.
- Always enable two factor authentication when available.
Do Exchanges Charge Transaction Fees?
There are fees for using an exchange. After all, the company managing the exchange needs funds to keep the service live and secure.
The types of rates of fees vary from exchange-to-exchange however. By doing your research and being smart you can find a platform with the lowest fees for the type and volume of trading you’re doing.
There are two main types of fees when using an exchange:
Exchange Fees - There is almost always a small fee for exchanging fiat for crypto, or crypto to crypto. The amount varies so it’s hard to give you a ballpoint figure but look it up and factor it into your exchanges.
Trading Fees - Most exchanges have a fixed % trading fee and will usually tier it per the volume of trading you do. At the time of writing this Bittrex charge 0.25% on all trades for example. Trading fees are distincted in two categories "taker fees" and "maker fees".
Maker fees are applied when you add liquidity to the order book. This can be done by adding a buy limit order below the current price and a sell limit order above the current price.
Taker fees are applied when you remove liquidity from the order book. All market orders either buy or sell are considered taker fees as they remove liquidity from the order book.
Some exchanges will also charge network fees, which are paid to the accounts mining new coins. There may also be management fees which may be a set amount to help cover operating costs, and wallet fees.
My best advice is to read the terms and conditions before trading on an exchange to be aware of any and all fees you’ll be liable for.
Once you get more involved in trading you’ll be able to work out which exchange will charge you the least fees depending on the volume of trades you’re making.
What to Look for in an Exchange?
It’s always smart to research the exchange you’re going to be trading on before investing. Here are a few of the things I always look at before deciding if the exchange is a place I’m willing to put my money:
Security - Obviously security is the number one consideration when choosing an exchange. Most of the longest established exchanges have a good security history, that’s why they are still popular.
Still, it only takes a few minutes to perform some Google searches, ask a few questions in forums, and read up on the exchange you’re interested in.
It’s worth noting that not all exchanges require personal information. If you want to trade anonymously and not have your personal information stored by a third party look for one of the exchanges that don’t require your personal details.
Reputation - Reputation is hard to gauge as there always seems to be a spectrum of good to bad experiences.
But as you start doing some digging and reading forums about user experiences you’ll get a good idea of which exchanges have a good reputation, and which don’t.
Remember, even if the low fees and entry offers look appealing but you’ve read some negative things about an exchange, there is rarely smoke without fire. Be wary of exchanges with a poor reputation.
Usability - For me, there are no excuses for exchanges being complicated and hard to figure out for first time users.
The more difficult the UI is to use the higher the chance for user error. Coinbase is widely regarded as one of the easiest platforms to use if you want an example of an exchange to get started with.
Fees - Fees vary from exchange to exchange. They wrap them up in different places too, such as trading fees, fixed fees, management fees, and network fees to mention a few of the most common charges.
Some platforms are going to favor high volume traders, and vice versa. Do your research before starting to trade on a platform so you don’t get any nasty surprises.
Which Cryptocurrency Exchange Has the Most Altcoins?
If you’re interested in trading with altcoins you’ll need to move away from Coinbase and a few of the other larger exchanges to find one that supports more of the altcoins.
It’s an ever-changing landscape with new coins coming into circulation, some leaving, and exchanges adding and removing the coins they support.
But two of the exchanges that support the most altcoins are Binance and Bittrex. Both are highly rated exchanges too, they have clean interfaces and good reputations.
List of the Best Crypto Exchanges
Coinbase is one of, if not the most well-known and longest established crypto exchanges. It’s available across all the large countries, accessible to millions of traders, and has a user-friendly UI.
The main drawback is that Coinbase only supports a few of the main currencies, namely; Bitcoin, Litecoin, Ethereum, Bitcoin Cash, and Ethereum Classic.
But this is more than enough for beginners to learn the ropes trading and just as good for experienced traders sticking to these currencies.
Coinbase is regarded as one of the safest too. Their wallet is secure, you can sign up for their vault for added security, and they offer insured Bitcoin deposits.
They offer fiat to crypto services, so you can buy cryptos with a wire transfer or a credit card. We have used Coinbase to buy bitcoin and other cryptos and never had a problem.
The only drawback of Coinbase is they don't facilitate a lot of markets so if you want to buy some smaller cryptos you have to look elsewhere.
Kraken is also one of the oldest exchanges founded in 2011, and currently the top European exchange handling the highest Euro to Bitcoin volume of any exchange.
Don’t let that put you off if you’re outside of Europe however it’s popular all over the world. The security is very tight, the UI and processes have a smooth feel to them, and there is a lot of depth to their tools.
Kraken is a step forward from Coinbase if you’re taking trading seriously. They support a wider range of altcoins than Coinbase and have more flexibility.
They also offer fiat to crypto services making it a great choice for people looking to buy some smaller cryptos (they offer 38 markets) and not loose money on fees by moving their money.
The fees are reasonable and more than fair, considering their UI does more for you than other exchanges, just make sure you’re making the use of the available tools.
We can understand that it is not a great fit for beginners because they can get easily overwhelmed by the number of options they offer to you but it is a great fit for more seasoned traders.
They also offer margin trading that is a plus f you have the experience and knowledge of how to use it.
They have tiered level services depending on the identification level you want to do and the type of your account personal or institutional..
We have heard a lot of complaints about Kraken's customer service and we think it is an area they can improve.
Poloniex is another of the popular exchanges operating out of the US. They underwent a facelift in 2015 for a fresh look and smoother UI, and give you the ability to trade on margin.
This exchange currently supports a big list of altcoins. Their fees are around the base you expect, with a tiered structure per the volume you’re trading in a 30-day average period.
They did have a security breach back in 2014, and while the internet rarely forgets there hasn’t been a major incident since so it’s fair to say they learned from that experience.
Nowadays they store most of the customers funds in cold storage offline and keep online sufficient funds for the platform to work.
In February 2018 Poloniex was acquired by Circle a Goldman Sachs backed company looking to make Poloniex the first US based regulated crypto exchange by registering it with SEC.
They ofer crypto to crypto services so you need to move coins you bought elsewhere to Polo if you want to use their services.
Like many exchanges the main problem of Poloniex is customer support that is almost no existant.
Also long waiting when trying to withdraw has been reported. (We have experienced this ourselves)
Bittrex is another of the top crypto to crypto exchanges. They support all the top currencies, along with a lot of additional currencies like NeuCoin, Nextcoin, and other emerging coins.
They have an emphasis on security, which is always what you want to hear from an exchange. They’ve only been in operation since 2014, but I can’t recall any incidents to-date.
The founder of Bittrex, Bill Shihara has a lot of years of experience as a security engineer in Fortune 500 companies like Amazon and Blackberry. He founded Bittrex with security in mind after he saw several security breaches at crypto exchanges.
An example of this is a multi-stage security layer they put in place on their wallets to ensure up to 90% of your funds are stored offline, which is by far the safest way to keep your coins safe.
Another strong point of bittrex that many exchanges lack is customer support. They have a dedicated support page and some very active social media profiles.
They have a user friendly UI making it easy for beginners to use it but they lack more advanced settings for seasoned traders.
Although operating out of Hong Kong and being very popular with Chinese traders, Binance is used all over the globe and worth checking out as they offer some useful features and support a lot of coins.
They recently moved their base to Malta that is known as a crypto friendly territory.
Bianace is the biggest exchange by volume with over 1 billion dollars in transactions daily despite being almost a year old.
They gained popularity by adding a lot of Initial Coin Offering tokens after their launch and their low trading fees.
It’s a crypto to crypto exchange, so you can’t use fiat to trade or load up your balance. Their fees are around the baseline you’d expect to pay, and it’s free to make deposits.
Something I like about their platform is that they understand the different needs of beginners and experienced traders and as such, they offer both basic and advanced interfaces.
In March 2018 Binance suffered an unconfirmed hacking . Allegedly, hackers stole 7000 Bitcoins through an explotation to a smaller coin's API Syscoin. Till today the attacked hasn't either got confirmed or denied.
Bitfinex has been around since 2014 and has rapidly grown to one of the largest crypto exchanges. They are known for supporting a wide range of coins and have some advanced features that are very helpful for experienced traders.
They operate a tiered fee structure with fees ranging from 0-0.2% and are competitive with their fees, which is great considering the range of coins and features they offer.
They were victims of a hacking back in 2016, but have tightened up security as a result and there hasn’t been an issue since. They even implemented a cold wallet set up to help secure your funds offline.
Bitfinex is closely related to the stablecoin Tether and have received a fair amount of critisism about it.
They have a really comprehensive interface for seasoned traders but at the same time really user friendly for the new ones.
Huobi was founded at 2013 in Singapore and is one of the biggest crypto exchanges in the world. Since then, they have expanded across Asia opening offices in Hong Kong, Japan and Korea.
They facilitate 264 markets so finding an altcoin is not a problem at Huobi.
Huobi's main focus is customer support offering by far the best customer services among crypto exchanges.
The customer support department operates 24/7 with a really good response time, making it easy to facilitate people around the globe with different timezones.
They also have a really detailed FAQ and help section answering a lot of users questions.
Another Huobi's strong point is UI, it is clean and offers advanced options making it one of the best in our opinion as it can be used by both experienced and new users.
They also offer Over The Counter Services allowing users to buy users cryptos from fiat but mostly using the Chinese Yuan.
They have a high level of security with Goldman Sachs backing them at this. They Have also created an investor security fund by utilising the Huobi Toekn.
Which Is the Best Crypto Exchange for You?
That’s always a tough question to answer as there are going to be different pros and cons that are relevant to different people.
As a general rule of thumb however, Coinbase is the best exchange for beginners to get started with.
Coinbase is also the best choice if you're concerned about security. They have a great track record and have implemented some strong security measures.
On top of passwords and their 2-factor authentication process you can also sign up for a vault account. So all the layers of security are there for you to take advantage of, and the UI is clean and easy to use.
If you’re a more experienced trader and are looking to expand to a different platform than Coinbase I recommend checking out Kraken.
Kraken has some of the best tools and detailed reporting features of any exchange. While off putting or under utilized by most traders, if you’re looking to go deep into the numbers you’ll get a lot of value from their platform.