Cryptocurrency Exchanges reviews by real, verified users. Find unbiased ratings on user satisfaction, features, and price based on the most reviews available anywhere.
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Cryptocurrency exchanges are online platforms designed to facilitate the trading of Bitcoin, Ethereum, Litecoin, and many other digital currencies. While cryptocurrency exchanges primarily serve as a place to buy and sell cryptocurrencies, many exchanges also offer substantially greater functionality than just supporting transactions.
In addition to transactions, cryptocurrency exchanges offer a variety of features for tracking, securing, and storing cryptocurrency assets. Cryptocurrency exchanges allow users to view real-time pricing information on a number of cryptocurrencies. Users can then buy assets at the price they see fit and store them in an integrated or native cryptocurrency wallet. Many cryptocurrency exchanges also facilitate multi-factor authentication software and other added security features for increased protection.
Key Benefits of Cryptocurrency Exchanges
There are any number of reasons to use cryptocurrency exchanges from simple curiosity to institutional investing. Below are several of the main reasons people choose to manage finances using cryptocurrency exchanges.
Invest — Cryptocurrency exchanges make it easy for individuals and businesses to invest in cryptocurrency. They offer everything a user needs to create an account and purchase, sell, and store cryptocurrency. They have a lower barrier to entry than some stock market investment because a user doesn’t have to purchase an entire bitcoin, unlike a potentially pricey stock. Instead, one party can decide whatever amount they wish to spend and buy the equivalent percentage of a cryptocurrency.
Investing in this volatile market can still pose risks, but the heightened risk is equaled by a heightened reward. Over the past few years, cryptocurrencies have increased in value exponentially, reaping big rewards for early investors. Cryptocurrency exchanges aren’t the most traditional platform for investing, but if an individual decides they want to purchase cryptocurrency, an exchange will provide all the tools they need to start.
Anonymize — Cryptocurrency exchanges allow users to store and trade cryptocurrencies without giving their personal information to anyone. Anonymous trading is typically sparked by a distrust for governing bodies. As a result, cryptocurrencies can have numerous perks related to anonymity, one being decentralization. Many users hoping to remain neutral to trades or transactions choose cryptocurrency because it’s designed to bypass governments, banks, and other centralized bodies.
Unfortunately, anonymity also allows some criminal activity. Cryptocurrencies have been the primary asset used on the dark web and other platforms used by criminals to communicate. However, many of those transactions happen behind closed doors and currencies are traded directly between individuals. On cryptocurrency exchanges, there are fewer criminals and nefarious actors as individuals can only trade digital currency, rather than narcotics and other illegal assets.
Pay internationally — International payments through banks and other traditional trading platforms can become complicated and slow. Cryptocurrency exchanges can make these transactions much simpler by bypassing the middleman. These trades can be done peer-to-peer or business-to-business with little oversight and low fees.
Different countries have different policies regarding both international trades and cryptocurrency trading. If both countries allow cryptocurrency investments, cryptocurrency exchange-based trading is a breeze. If one country is less accepting, users can always use a virtual private network (VPN) to mask or change their location.
Cryptocurrency exchange users come in many shapes and forms. Some are just individual people, some are pools of investors, and some are businesses. Regardless of the entity, cryptocurrency exchanges provide a convenient trading platform for anyone to use.
Individuals — If an individual wants to invest in cryptocurrency, exchanges are usually the first place they go. In a matter of minutes, someone can create an account, deposit funds, and begin trading. While it is incredibly difficult to determine who is moving the most money through exchanges, individuals are the most common users.
Professional traders — Professional cryptocurrency traders are users who spend a significant amount of time trading digital currencies and rely on them for income. These are common users, often early investors who collected a significant amount of cryptocurrency when the prices were very low just a few years ago. These individuals may use general exchanges, but many rely on direct trading exchanges for high volume trading and lower fees.
Businesses — Small businesses, investment firms, banks, and any other company with spare cash can begin investing in digital currency using cryptocurrency exchanges. Some exchanges are designed specifically for businesses and institutional investors. Some businesses—or professional traders turned corporations—will simply use traditional exchanges for convenience. Business accounts and regional regulation should be considered before businesses choose to invest in cryptocurrency, let alone begin creating a short list of exchanges they want to try.
Most cryptocurrency exchanges operate similarly, but they do vary to some extent depending on the entity utilizing it.
General trading — General cryptocurrency trading platforms come in the form of a website. Individuals can create an account, deposit or transfer funds, and begin trading with random individuals across the globe. They charge a fee for each individual transaction.
Direct trading — Exchanges that support direct trading are typically application or web-based platforms designed to connect specific individuals for trading purposes. These are often used for international trading and do not rely on market rates. With direct trading, individuals from both parties agree on a price and trade at the accepted rate.
Brokerage — Cryptocurrency brokerage solutions are web-based trading platforms that operate similar to a real-life currency exchange. They process trades through a network of dealers holding large pools of cryptocurrency. They typically process trades faster than exchanges and most are more user-friendly.
Cryptocurrency exchanges can provide a wide range of features, but here are a few of the most common found in the market.
Coin support — Coin support refers to the variety of digital currencies an exchange allows for trading. Common exchanges support common currencies like Bitcoin and Ethereum. Individuals that wish to trade a variety of coins might require a more advanced solution.
Coin tracking — Coin tracking allows users to identify currencies they want to monitor. If the currency reaches a specific price point, individuals may be alerted or trades may be automated.
Fiat support — Fiat currency is legal tender backed by a government. Some exchanges allow users to deposit fiat currency, but others require that cash is converted to digital currency before it’s deposited.
Trade volume — Trading volume is the amount of currency an individual can trade during a specific period. Some exchanges have limits or extra fees for high volume trading, while others allow for unlimited trading.
Payment methods — Payment methods are the way users deposit their initial investment. Some platforms only take cryptocurrency deposits while others support wire transfers or even credit card deposits.
ID verification — ID verification is an added security measure to ensure trades are valid and reduce the risk of fraud. This feature is more common for direct trading platforms than general exchanges.
Integrated wallets — Cryptocurrency wallets are secure storage locations for cryptocurrency assets. Some exchanges provide an integrated wallet native to their platform.
Mobile trading — Mobile trading allows users to access their funds and trade assets using a mobile application on their smartphone.
Business accounts — Business accounts help institutional investors manage funds and facilitate payments. These accounts likely have increased deposit and withdrawal limits, increased margin limits, and over-the-counter (OTC) trading desks.
Multi-factor authentication (MFA) — MFA is used to increase security to an individual account. Users can set up MFA software and require email or text confirmation to access the account.
Stablecoins — Stablecoins are digital currencies designed to act as a reserve asset equal to a specified fiat currency. Some exchanges support stablecoins for users to invest while avoiding market volatility.
Cold storage — Cold storage or cold wallets are designed for long-term investment. These wallets can increase security by storing private keys offline, in an isolated environment.
Fees — Each cryptocurrency exchange has different fees. Many different countries and banks even have different fees regarding cryptocurrency. Individuals hoping to quickly buy in and buy out should keep fees in mind to ensure their transaction is worth it. Sometimes fees are added for convenience. Mainstream users may choose an exchange based on its name and beginner friendliness, but this decision will likely cost you. Other exchanges will charge per transaction, hitting high volume traders the hardest. As a result, users should avoid exchanges that are unclear about their fees or simply possess expensive fees for trading.
Security — Security is a major concern for crypto investors. If an exchange or wallet can be easily hacked, the platform should be avoided. There are still a number of measures an individual can take to reduce the risk of fraud or theft. Storing currencies offline with private keys, utilizing multi-factor authentication, and phishing detection are just a few features and actions users can take advantage of to increase the protection of their digital assets.
Coin diversity — A common issue for cryptocurrency traders is a lack of support for specific coins on one platform. Many of the user-friendly exchanges only support the most common coins. Users should be wary of vendor lock-in caused by high fees and consider the coins they want to buy before they begin trading. If users know they want flexibility, choose an exchange with low withdrawal fees or one that supports a wide variety of currencies.
Regional availability — Exchanges may face different regulations depending on their location within a country or region. In the US, for example, exchanges must be approved by individual states. In some countries, like Ecuador or China, cryptocurrency is either outright banned or generally prohibited. Virtual private networks (VPNs) may allow users to access exchanges, but this action may also be illegal depending on your home country. Users should thoroughly research local laws to avoid penalties and punishment when considering cryptocurrency investments.
User experience — With hundreds of exchanges available today, there is a wide range of complexity and usability in the market. Some are designed for beginners and limit the variety of coin options, trade types, and storage solutions available to users. Others are highly complex and allow for a variety of transaction types using a wide array of currencies. Skill level and tech-savviness should be kept in mind when evaluating exchanges.