If you are new to investing in Bitcoin then it can seem like quite a daunting process, but with more and more cryptocurrency exchanges (also known as a crypto exchange) opening, it is becoming increasingly simple and more common to invest and trade in cryptocurrency. In this article we will look at the best places to buy and sell cryptocurrency, explain what a crypto exchange is and how crypto exchanges work.
Before we get started it is first and foremost important to have understanding of basic cryptocurrency concepts, the history of cryptocurrency and how to avoid cryptocurrency scams. If you need to, have a read through these articles before deciding on the best crypto exchange for you.
What is a cryptocurrency exchange?
Firstly we will start by explaining what a cryptocurrency exchange (crypto exchange), or digital currency exchange (DCE) is. A cryptocurrency exchange is a place where customers can trade cryptocurrencies for other assets (money, or other digital currencies). Exchanges often accept a range of payment options: credit card, wire transfer or crypto.
There are a number of brokerages that allow you to purchase and sell crypto currencies on their platforms, such as Robinhood and eToro, however you cannot withdraw these cryptocurrencies to dedicated crypto wallets. This is possible on an exchange like Binance, and Coinbase.
Here is a our list of the top cryptocurrency exchanges.
The best overall crypto exchange: Coinbase
Coinbase is arguably the best overall crypto exchange for most users, it is also one of, if not the safest crypto exchange. Coinbase is a fully regulated and licensed crypto exchange in the US. Coinbase is insured against data breaches and cash is stored in FDIC insured bank accounts.
You can buy and sell crypto with Coinbase, and you can even withdraw your cryptocurrency from the exchange. Whilst transactions are not free, Coinbase has low fees. The straightforward and easy to use platform is what makes Coinbase the best overall exchange for both beginners to crypto and more experienced crypto traders. Once you have a good understanding of how Coinbase works, you can start using Coinbase Pro and gain access to advanced features.
Fees: Between $0.99 and $2.99 for a transaction, depending on the value of the purchase.
The best Crypto exchange for beginners: Cash App
If you are just starting out with cryptocurrency, Cash App is the best exchange for beginners. Cash App was founded in 2018 and has been growing in popularity because of their low fees. Cash App currently only allows investment in Bitcoin and no other crypto currencies. This isn’t ideal, however for beginners, Bitcoin is one of the most relatively stable crypto currencies to invest in. The Cash App interface is easy to use, and makes up for the limited crypto trading options.
There is a withdrawal limit of $2000 of Bitcoin in a 24 hour period, and $5000 every week, however it is probably not recommended for a beginner crypto investor to risk that much to start anyway whilst they gain experience. Ultimately, being able to actually withdraw your crypto from Cash App is what makes them a better choice than Robinhood for beginners.
Fees: There is a service fee for each transaction and an additional fee depending on the price volatility.
The cheapest crypto exchange: Binance
Binance is one of the largest crypto exchanges, and also the crypto exchange with lowest fees. Binance offers over 100 different trading pairs between cryptocurrencies - for example, this allows you to purchase Ethereum with Bitcoin.
Fees: There is a 0.02% to 0.10% purchase and trading fee. If you purchase using a debit card then there is a 3% to 4.5% fee, 15$ per US wire transfer, but any Single Euro Payments Area (SEPA) transfers are free.
The best for altcoins: Binance
Binance is also the best exchange for altcoin trading as this is one of their main focuses. It is best suited for people who want to trade lesser-known altcoins which may not be available on other exchanges.
The best crypto exchange USA: Binance
The best decentralised crypto exchange: Bisq
Finally, we have Bisq, this is the best exchange for decentralised crypto. Bisq is a downloadable peer-to-peer decentralized Bitcoin and crypto exchange. A decentralized exchange allows for peer-to-peer cryptocurrency transactions without an intermediary. For a full guide on what is a decentralized exchange? Have a look at this article from the Binance Academy.
Importantly, Bisq does not touch or control the user’s funds, unlike a centralized exchange, such as Coinbase who can seize your funds if they deem your account’s activity to be suspicious.
Fees: There are trading fees to use the Bisq platform, and fees to miners for mining the blockchain. These can be paid in BTC or BSQ (the Bisq cryptocurrency). Bitcoin is 0.1% on the maker side, and 0.7% on the taker side. If paying in BSQ, the fee is 0.05% on the maker side, and 0.35% on the taker side.
Photo: Unsplash + 123rf.com. Sources: Investopedia, Wikipedia and Binance Academy
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