Picking a safe cryptocurrency exchange is a lot like picking a safe gambling site, except that the specifics and details are a little different. Over the years, I’ve signed up at and used dozens of both types of site, and I’ve learned lots about how to separate the rip-offs and second-rate sites from the world-class operators.
While my first love will always be crypto gambling sites, I’ve also developed a complete fascination – my wife would probably call it an obsession – with cryptocurrencies. So, I’m going to show you how to pick a cryptocurrency exchange based on my experience tumbling down this particular rabbit hole for the last…oh, I don’t know…several years, in any case.
So, what are the top crypto exchanges, and what can I tell you about them? That seems like a good place to start, so let’s do that.
The Top Crypto Exchanges – A Quick Overview
There are lots of great cryptocurrency exchanges online, and an absolute pile of horrible ones. Some of them are outright scams, but there are a few “big names” that you can trust. Some of these have had issues in their early days, but you can take it from me as an experienced crypto trader – these top exchanges are safe, secure, and run by legit operators.
If you’re a crypto beginner, I’m telling you now that this is the only place to start. Coinbase is the most user-friendly crypto exchange by ten country miles, and it allows you to buy coins for cash using your credit/debit cards and via bank transfers. Coinbase doesn’t have the most competitive fees, and you will eventually outgrow it due to the limited selection of coins as compared to many other exchanges, but trust me when I tell you, if you’re a crypto newbie, Coinbase is the only place to start.
Buying and selling crypto on Coinbase is a lot like attending crypto high school. You’ll learn the basics, score a few times, get your fingers burned once or twice (but you’ll get over it), and ultimately, you’ll get bored of it and want to get off to college – Binance. This is where the sexy altcoins that promise 1,000x gains and heart-pounding adrenaline rushes live. Binance offers thousands of coins, and there’ll be a learning curve involved when you start trading there. However, you need to graduate sometime, and when you do, you’ll realize exactly how big and full of unfathomable opportunity cryptocurrency trading really is. Binance is the big leagues, and you can go all the way to the top without ever leaving this platform.
Other solid cryptocurrency exchanges include Kraken, ShapeShift, and Bitpanda. I’m not going to go into too much detail about these, because the truth is the above two are the only ones you’ll ever really need. The others don’t offer anything they don’t, and once you get to Binance, you’ll see that you will never need to use another crypto exchange again.
I do have some other accounts, but those were just created to buy tiny little altcoins someone had told me about that were selling at like 1,000,000 coins for $300. I still have some of them, and heck, who knows? Maybe I’ll wake up some day in 10 years’ time and find a million bucks in a crypto wallet. Wouldn’t that be something?
Things to Consider When Picking a Cryptocurrency Exchange
Even the best cryptocurrency exchanges haven’t been around anywhere near as long as casinos, sportsbooks, or poker sites, so it’s a much less regulated industry.
There’s no central licensing authority you can turn to for authentication like you can with the UKGC or MGA with gambling sites, and while exchanges obviously have the permission of the authorities in the countries they operate in, there are no detailed cryptocurrency regulations in many places, so that doesn’t mean much.
Nonetheless, there are some things you can do to make sure it’s a trusted cryptocurrency exchange and to make sure the site will serve your needs. Let’s take a stroll down cryptocurrency lane and talk this through.
There are lots of sites that review cryptocurrency exchanges, and there are endless forum posts by crypto traders and investors outlining the pros and cons of each cryptocurrency platform.
It may take a bit of digging to get specific details, but they’re out there, and if a site is scammy or untrustworthy, there will be plenty of posts out there about that. In fact, in most cases, you need look no further than Reddit for genuine opinions of various popular cryptocurrency exchanges like Coinbase, Binance, and Kraken.
Remember that there will always be a few burned traders who lost thousands trading crypto who want to rant, rave, and blame anyone but themselves. Try to filter out CryptoBob877 typing “COINBASE ROBBED ME! THEY NEED SHUT DOWN I TELL YA’!” and instead build a general overview of the exchange from what you read. If you notice the same complaints coming up again and again, it’s probably a fair point, and you can take it as legitimate.
Nobody will tell you more about an exchange than its existing and previous customers. Pay attention to what they have to say, and you’ll be one step ahead.
Be sure to find out:
- Has the platform ever suffered any serious security breaches or exchange hacks?
- Are the majority of users/traders satisfied with the service received?
- Are there any recurring patterns in the complaints about this specific exchange?
- Don’t just focus on the negatives. What do users say is great about this exchange?
Crypto Exchange Fees
Fees are where new cryptocurrency traders can get confused and can lose a fair amount of money quickly. If you trade frequently, they can really chew up your capital, and small percentage differences really add up fast.
Generally speaking, the only fees you need to pay serious attention to are maker/taker fees, aka trading fees. Most of the top exchanges don’t charge monthly membership fees or anything like that, but they will charge fees both when you buy cryptos for fiat and when you trade cryptocurrencies.
Let’s get a little clearer about what maker/taker fees are. Don’t let these terms confuse you. They’re much simpler to understand than you think.
These are fees charged by market makers who provide market liquidity. They place buy and sell orders on the exchange to help make the market.
These guys do the exact opposite of makers. They take liquidity off the market by buying at market price. This ensures orders get filled.
You’ll usually find that taker fees are slightly higher than maker fees.
You really want to pay attention to fees. Even something small like a 0.5% difference will add up massively in the long run. Think about it – a 0.5% difference on a $1,000 trade is $5. If you trade multiple times per day, or even more frequently as some traders do, this will quickly add up. Think of all the extra crypto you could have if you were saving even a few dollars on each trade.
You’ll also want to look out for transfer fees. These sometimes apply when moving cryptocurrencies off an exchange, for example to a cryptocurrency wallet. They’ll usually be negligible, but again, it’s the little things that add up, so shop around.
Once you’ve found a site that offers the most competitive fee structure (it’ll almost always be Binance), you can then consider the next most important thing.
It probably comes as no surprise to you that you can’t buy every single cryptocurrency on every single exchange. Since there are now thousands of cryptocurrencies, that’s a good thing. Believe me when I tell you that you want nothing to do with the vast majority of these vaporware projects.
If you have a specific coin in mind that you want to buy or trade, an obvious place to start is to make sure it’s available. Also look at other coins you’re interested in trading. You’ll probably have to make some sacrifices, but then again, there’s nothing to stop you from having multiple exchange accounts so that you can trade most of the coins you want to.
Personally, I stick to trading a few coins I understand. They include:
If you’re a beginner at trading cryptocurrencies, I don’t recommend buying or trading any coins outside of the top 20 by market cap. These are the best projects (no coincidence), and you can still make plenty of money trading them. There are just too many scams out there, so wait until you know what you’re doing before straying into other coins.
If you just want to buy Bitcoin, Litecoin, and Ethereum, then Coinbase will serve your needs. If you have other altcoins in mind, then I can’t recommend Binance highly enough. It offers pairs on well over 1,000 coins and covers most of the big-name coins.
Before deciding on a coin, find out the following:
- Does the exchange offer cryptocurrencies for fiat pairs such as USD, GBP, AUD, and CAD?
- Does the exchange offer the coins you want to trade? If so, what are they paired with? For example, some alts are paired with Bitcoin, Ethereum, and others, whereas some are just paired with Bitcoin.
- Will you need multiple accounts at different exchanges to trade the coins you want? Or will you be able to trade them all under one roof?
Other Factors to Consider
We’ve covered the most important things already, but there are a few final questions I would ask before setting my mind on an exchange. These questions include:
- Does the exchange have extra security features such as two-factor authentication and storing coins offline?
- Is there plenty of volume and liquidity on the exchange? In other words, if your coins go up in value, can you sell them quickly?
- Are there any buy/withdrawal limits? For example, Coinbase limits new users to a few thousand dollars in buy orders, to begin with. Binance limits your withdrawals to 2 BTC per day until you verify your account.
- Does the exchange let you trade your cryptos for “stable coins” such as Tether? These are pegged to the value of the USD and allow you to “sit out” without selling for USD itself, which would create a “taxable moment” in some countries.
- What account verification procedures will you need to go through? Do you trust the exchange enough to send a photo of your ID if that’s required?
These are all things to consider before settling on any given exchange. Once you’re satisfied that the exchange is safe, secure, charges fair fees, and offers the coins you want, have at it!
Biggest Crypto Gains – Ready to Trade?
Now that you know how to pick a safe crypto exchange, I want to leave you with a parting gift – inspiration. At the time of writing, the cryptocurrency markets have been in a dire, soul-crushing bear market for over a year, and many have watched millions slip through their fingers and disappear. However, I’ve already witnessed one crypto bull market (2017), and I know that vast fortunes can be made in a relative blink of an eye.
So, here are some of the biggest gains in crypto history. Think of them as you trade, and remember, fortune favors the brave!
- XRP/Ripple – Gained 3,415% – $1,000 invested would have grown into $35,150
- Ethereum – Gained 4,279% – $1,000 invested would have turned into $43,790
- NEM – Gained 8,662% – $1,000 invested would have turned into $87,620
That’s what can happen in crypto in the course of a year, folks! Of course, these numbers are based on investing at the exact right time, but you get the picture. There’s a reason so many people are excited about cryptocurrencies.
Go ahead and pick your exchange now. A whole new world of excitement awaits.