If you currently own cryptocurrency, chances are that you bought if from a cryptocurrency exchange. These trading platforms have become the go-to place for persons who wish to exchange fiat currency for cryptocurrency and vice versa. They also facilitate crypto to crypto transactions through several coin trading pairs.
It goes without saying that these trading platforms largely shape our cryptocurrency experiences. Excellence or deficiency in your chosen exchange would impact your activity whether you are a day trader, a cryptocurrency investor or someone with a slight interest in virtual currencies.
Most exchanges operate in basically similar manner. They connect the one who wishes to buy a particular currency with one who is willing to sell. Much like a conventional securities exchange, but with a slight difference—here you trade digital currencies. In practice, your currency is stored with the exchange and exchanged with currency from another user who wishes to sell at a defined exchange rate.
So, what do you look out for in a cryptocurrency exchange?
There are mainly five areas to consider when choosing a cryptocurrency exchange to deal on. In no particular order of priority, they include: Trading fees, Security, Customer support, Liquidity, trading pairs / listed currencies. Other factors one may want to consider are the effects of regulatory policies and privacy features. Speaking of privacy, check out these cool ways to buy bitcoins anonymously without having to verify your identity.
To better understand the impact of this factors and how they would influence your choice, read this article on what makes a good cryptocurrency exchange. For experienced traders, I found this interesting twitter pool on what your major concern is with cryptocurrency exchanges. Click here to vote before it closes.
In this review, we looked at the top 10 cryptocurrency exchanges by daily trading volumes according to data from CoinMarketCap as at May 6, 2018.
Binance exchange was launched in September 2017 and has grown rapidly to become one of the most popular trading platforms globally. Originally founded in China, Bianace moved to Japan following China’s ban on cryptocurrency activities. In April 2018, it announced it was moving again, this time to the Island nation of Malta much to the pleasure of the country’s prime minister.
Currently, it records about $1.5 billion in daily trading volumes and lists over 50 cryptocurrencies including pairs with Bitcoin, Ethereum, Litecoin, Ripple and its own native BNB tokens. Also in April, Binance announced that it would soon provide fiat to cryptocurrency trading pairs for users to deposit and withdraw fiat currency.
Trading fees on Binance are pegged at 0.1 percent for all trades. Withdrawals fees vary depending on the cryptocurrency while deposits to the exchange come at no cost. Users also get a 50 percent discount while using the Binance native BNB tokens. BNB was introduced through an initial coin offering in 2017 and is currently valued at $13 USD with a market capitalization of $1.3 billion USD.
Binance may be new, but it has grown huge following and credibility in a short while. There are no serious security concerns and the customer support ranks among the fastest and most effective. Its web-based platform offers two layouts; a basic and a pro version.
Okex cryptocurrency exchange was founded in 2014 by OKCoin CEO Star Xu. Currently based in Hong Kong, OKEx CEO confirmed that the exchange was moving to Malta after being attracted by the country’s blockchain policy.
The exchange lists over 450 cryptocurrency tokens including major cryptocurrencies; Bitcoin, Ethereum, Litecoin and Bitcoin Cash. They also enlist new tokens quite often. Its services include unlimited trading for registered users, cryptocurrency futures trading and a price index.
OKEx boasts a 24-hour trading volume of about $1.5 billion USD and allows cryptocurrency deposits in BTC, BCH, ETH, ETC, LTC, XRP and NEM and withdrawals in BTC, ETH, ETC, and LTC.
OKEx uses a volume-based maker-taker fee model. For transactions below 600 BTC, the platform charges 0.15 percent to the maker and 0.2 percent to the taker. The fees section of their website describes their tiered fee structure and other conditions for spot trading, futures contracts and rebates.
In general, OKEx is seen as a safe and experienced trading platform where one can trade a wide variety of coins. Its website is fairly easy to navigate even for a beginner. Its security measures were called into question last year (Oct. 2017) when some customer accounts were compromised. The exchange claimed it was not hacked rather the affected users did not properly secure their accounts. However, the exchange has good security measures including cold wallet storage, offsite backup, and standard encryption protocols.
Huobi started operations in 2013 mainly as a Chinese cryptocurrency exchange. Now as Huobi pro, the exchange serves over 130 countries with website translated to English and other languages. Information on its website indicates a new US strategic partnership HBUS to be launched later this month.
Huobi has a stringent verification process in which a user has to verify one’s identity (username must correspond with user’s bank account name). One has to also verify nationality by uploading a selfie taken with a means of identification.
With a 24-hour trading volume of $1.2 billion, Huobi books a spot as one of the top crypto exchanges. Huobi supports trading in US Dollars and Chinese Yuan and allows deposits and withdrawals of cryptocurrencies Bitcoin and Litecoin.
Deposits in Yuan are free while in US Dollars, it users have to pay 0.5 percent (OKPAY) or 1 percent for wire transfers (minimum of $33). Cryptocurrency withdrawals are charged at 0.001LTC and 0.0001BTC respectively. Fees for withdrawals in fiat is tiered and ranges from 0.3 percent to 0.5 percent. Huobi operates a maker-taker trading fee model; the maker pays 0.1 percent exchange fee while the taker fee ranges from 0.2 percent to 0.08 percent based on 30-day trading volume.
Huobi is noted for its strong security features; about 98 percent of its funds are kept in cold storages with 24-hour monitoring of the wallets. There have been reports of hack attempts on the exchange but no monies were lost.
Bitfinex cryptocurrency exchange was founded in 2012 and has its headquarters in Hong Kong. The exchange has very close ties with Tether which is maintained to the US dollar. In January, the exchange launched Ethereum trading platform, Ethfinex to accommodate growing ethereum based token trades. It has announced plans for a similar EOSfinex exchange.
The exchange lists all major cryptocurrencies including IOTA and currently processes $500 million in daily trades. To buy cryptocurrency from Bitfinex using fiat currency (USD or EUR), you need to verify your ID, a process that may take up to 5 weeks. However, one can easily trade cryptocurrencies on the platform.
Bitfinex fees are 0.1 percent and 0.2 percent for maker and trader respectively. For trades above $7.5 million, maker fees are waved. Deposits are free for deposits above $1000 while small deposits (below $1,000) are charged to encourage bulk deposits. Bank wires attract a fee of 0.1 percent either way.
In terms of security, the exchange has faced controversy regarding a major hack in 2016 when customers lost $72 million. The exchange managed the situation well, paying back all stolen funds and revamping its security.
Bithumb is a Korean-based cryptocurrency exchange created in 2013. The exchange which is popular in Asia is suited to the Korean market. For instance, it lists coins which are popular in Korea and may not list certain coins though they may have a global reputation.
Currently, Bithumb users can trade in up to 30 digital currencies including TRON and EOS alongside major coins. 24-hour trade volume on the platform is about $360 million USD. Users can buy cryptocurrency on the exchange using Korean Won (KRW) but not with US dollar. The exchange also accepts deposits in Bitcoin and Ether and withdrawals in bitcoins, Ether, Ripple and Korean Won.
As for trading fees, Bithumb charges an exchange fee of 0.15% (maker/taker) for trades. Deposit is free unless for small deposits which attracts a deposit fee depending on the coin. Deposits in Korean Won is always free, however. Bithumb also charges a withdrawal fee depending on the currency. The fees page shows the amount per currency.
The exchange requires a rigorous verification process. The 4-stage process requires the user to confirm email, phone number, name, and location. After the second stage, a user can deposit and withdraw on the platform but to asses all feature and enjoy maximum limit, a user must complete all 4 stages.
The platform is ideal for Korean users and it can be inconvenient for people using the exchange from outside Asia. Its security record was tainted in 2017 after a major hack in which customers lost about 100 billion Won (approx. $95 million USD).
Upbit is a fast growing Korean cryptocurrency exchange. Launched last year (October 2017), the exchange is reckoned as the biggest in the country by average daily trade volume. It is owned by Korea’s second biggest search engine providers Dunamu and partnered with Kakao corp owners or popular messaging app.
The trading platform (website) is available only in Korean and suited to the Korean market. International users would have to use translation services like Google Translate to navigate the website.
At this time, Upbit has a 24-hour trade of $350 million and users can trade in over 100 cryptocurrencies including the major currencies and USD tether (USDT) pairs. To register with the exchange, users are required to register with Kakao pay
Upbit cryptocurrency exchange uses a taker—maker model and charges a 0.25 percent fee from both parties. There are no charges on deposits while withdrawals attract a fee depending on the currency. Won withdrawals are charged a fee of 1000 KRWs.
For traders in Korea and Asia, Upbit is a good trading platform shown by its rapid growth. The platform offers strong technical analysis, charts, and newsfeed.
Upbit is highly reputable, backed by Kakao and using its Kakao pay security standards. In fact, the platform is similar Kakao stock platform and its wallets are backed by BitGo. There has not been any major security scare, though it is less than a year old. The customer support responds promptly when contacted via mail or KakaoTalk in Korean.
Registered in 2013, HitBTC is one of the advanced cryptocurrency trading platforms, offering its services globally. Operating out of Estonia, the exchange serves the European market and countries over the globe which has strong Anti-Money Laundering policies.
HitBTC lists over 100 coins currently trading about $300 million USD on a 24-hour interval. It allows deposits and withdrawals in US dollar and Euros as well as major cryptocurrencies from a HitBTC-supported wallet. The exchange limits its services from countries without AML laws in place.
Exchange trading fees are relatively cheap and designed to encourage liquidity by favoring the makers. Takers pay the trading fee of 0.1 percent while makers gain a rebate of 0.01 percent for each trade. Cryptocurrency deposits are free while withdrawals fees (which are basically network fees) vary depending on the cryptocurrency. For wire transfers, the exchange charge 0.1 and 0.2 percent for deposits and withdrawals respectively. It also offers over-the-counter trading (off-exchange trading) at a 0.1 percent commission fee.
The registration process is fairly simple, requiring only a name and email at the first point. One can start trading immediately. However, to trade in fiat and access higher limits, the user needs to verify her identity by providing identity documents via email. The process takes three days or more.
HitBTC enjoys a lot of community support making it a very reputable platform. It also offers strong security features, not the least a 2-factor authentication and a withdrawal verification. Its customer support uses an email ticketing system while general enquires can be addressed in their forum.
Bit-Z is a cryptocurrency exchange founded in 2016 and based in Hong Kong. It offers regular cryptocurrency trading services as well as OTC trading and serves users beyond Asia.
The platform is quite easy to understand and navigate even for beginners. It also offers good insights for experienced traders with real-time market info, advanced charting tools, technical indicators, and trade history.
At the moment of writing, Bit-Z has a 24-hour trading volume of $179 million. It lists over 100 coins arranged among BTC, ETH, and DKKT market pairs. DKKT is a stable coin maintained at the price of a Danish Krona. It does not offer fiat trading pairs, however.
Transaction fees are relatively low on the Bit-Z platform. Deposits are entirely free and the average withdrawal fee is 0.5 percent though this varies with different coins. There is a flat fee of 0.1 percent for both cryptocurrency buyers and sellers.
Bit-Z has a bank-level SSL security and a Global Server Load Balancing (GSLB) to maintain stability. The exchange uses 2-factor verification and also requires verification for withdrawal. Though withdrawals and customer support may delay, the exchange is noted for transparency and fairness.
Created in 2017 and based in Hong Kong, Bibox exchange is one of the more advanced cryptocurrency trading platforms. It boasts a team with vast experience from OKCoin and Huobi exchanges.
The platform uses artificial intelligence (AI) technology to optimize transactions. The website has a basic mode and a full-screen mode suited to experienced and advanced traders. It is not regulated by the Hong Kong government.
Bibox Exchange lists several (over 50) cryptocurrency trading pairs but no fiat trading pair. The coins include Bitcoin (BTC), Ethereum (ETH), Tether (USDT), and Dai (DAI), a stablecoin with the value of a dollar like Tether but is decentralized and on the ethereum blockchain.
Deposits on the Bibox platform are free while the withdrawal fee is 1 percent per transaction. Trading fees are pegged at 0.1 percent while traders get discounts when they use the Bibox native token. Its 24-hour trade volume is currently $170 million according to CoinMarketCap.
Bibox uses an email ticket system which users say is prompt and effective. The website is quite sophisticated and uses standard security features including an SSL encryption and 2-factor authentication. The exchange uses an offline cold wallet to store most of its funds.
GDAX (Coinbase Pro)
GDAX—short for Global Digital Asset Exchange—was launched by Coinbase in 2016 to facilitate crypto-to-crypto trades as well as crypto-to-fiat trades. At the time, Coinbase could only allow users to buy bitcoins with their bank cards, hence the need for GDAX. The US-based exchange is insured and enjoys support from Andreessen Horowitz, NYSE and Union Square. By June 29, 2018, GDAX would morph to Coinbase Pro.
GDAX currently support both cryptocurrency trading pairs including (BTC-ETH), (BTC-LTC), and (BTC-ETH). It also supports fiat-crypto pairs for Dollars (USD), Great Britain Pounds (GBP) and the Euros (EUR), and currently has $160 million in daily trade volume according to CoinMarketCap.
It has a zero exchange trading fees for makers while takers pay 0.1 – 0.3 percent fees depending on the 30day trading volume. Volumes below $10 million pay the most (0.3 percent) while users who trade 100 million and above within the same period pay 0.1 percent.
Coinbase Pro is highly secured with 98 percent of its funds in cold wallets and state-of-the-art security systems. It is well respected within and outside the United States. It is FDIC covered and users can get compensated up to $250,000 in the event of any loss. The exchange requires a comprehensive verification process.
The website is very user-friendly and online customer support is available. Users can contact customer support by phone (during work hours).
Cryptocurrency exchanges like Huobi, Bitfnex allow users to trade directly or through other third-party means through their over-the-counter (OTC) desk.
In this review, we did not include peer-to-peer cryptocurrency trading platforms like Localbitcoins where users interact directly with themselves. We also did not review exchanges without trading fees and exchanges that trade only bitcoin derivates and not actual bitcoins. To trade cryptocurrency without fees, read our review of cryptocurrency exchanges without trading fees. If you’re new to cryptocurrency and already getting confused about the extra charges you’re having to pay, we explained the fees associated with cryptocurrency trading here.
NOTE: The numbers stated in this article were obtained on May 6, 2018.
Solomon Sunny is the market reporter for Smartereum, one of the global leaders in Ethereum, blockchain and currency news. He produces technical price updates on digital currencies and writes recent developments about blockchain.