Everybody is making money in crypto these days, and I guaranteed that they are using the list below of the best cryptocurrency exchanges to do it. If you’re looking to invest and make money with crypto, you’ll need to know which the best cryptocurrency exchange is to use.
This guide will introduce you to top cryptocurrency exchanges and their advantages and disadvantages. You’ll find out the biggest and most popular exchanges, and the best cryptocurrency exchange to use.
So, by the end of this guide, you’ll be able to choose the best crypto exchange to suit your needs and financial strategy.
- 1. First, What Is a Cryptocurrency Exchange and Why Do We Need Them?
- 2. The Main Types of Cryptocurrency Exchanges
- 2.1. Trading Exchanges
- 2.2. Decentralized Trading Exchanges (DEX)
- 2.3. Broker Exchanges
- 2.4. P2P Exchanges
- 3. What is The Best Cryptocurrency Exchange
- 3.1. The Biggest Trading Exchanges
- 3.2. The Biggest Decentralized Exchanges
- 3.3. The Biggest Broker Exchanges
- 3.4. The Biggest P2P Exchanges
- 3.5. Best Cryptocurrency Exchange 2020
- 4. So, Which is the Best Cryptocurrency Exchange for You?
First, What Is a Cryptocurrency Exchange and Why Do We Need Them?
A cryptocurrency exchange is basically a marketplace where someone can exchange or trade one cryptocurrency for another cryptocurrency. These exchanges help crypto investors sell their coins quickly and easily when they are ready to cash out.
They also help people invest into other coins on the market through the act of trading, much like a stock exchange. In some exchanges, you can even exchange fiat for crypto or vice versa, but that depends on the type of cryptocurrency exchange you use.
There are four different types of crypto exchanges that you can use to trade and buy coins from. Understanding the differences between the exchanges is the first step to choosing the best cryptocurrency exchange for you.
So, let’s begin!
The Main Types of Cryptocurrency Exchanges
The four types of crypto exchanges are trading exchanges, decentralized exchanges, broker exchanges and P2P exchanges.
This type of exchange is considered the “traditional” cryptocurrency exchange. It allows you to trade cryptos for other cryptos. For example, if you own Bitcoin and would like to own some Ethereum, you could trade some of your Bitcoin for Ethereum using a trading exchange.
✓ They offer a wide range of different coins in their marketplace, from the most popular coins to up and coming coins fresh out of their ICO (initial coin offering)
✓ On this kind of exchange, you can easily invest your money into various cryptos to build your investment portfolio
✓ Their user interfaces are user-friendly, and you can learn to use them quickly
✓ The transaction fees of trading exchanges are cheaper than other types of exchanges, which makes it easier for you to make a profit when day trading
✗ Due to the large variety of coins available on a trading exchange, it can be confusing and overwhelming for a beginner who is only interested in popular coins
✗ If you want to sell your crypto for fiat currency, you cannot do that on a trading exchange
✗ They do not offer a high level of security; if the exchange your using gets hacked, your coins are threatened and could be stolen
✗ If you’re looking to do big transactions on the trading exchange, you will have to verify your identity with the cryptocurrency exchange
Examples of Trading Exchanges: Binance, GDAX, OKEX
Decentralized Trading Exchanges (DEX)
This type of trading exchange is one that allows you to trade cryptos with other people through the blockchain directly. Unlike a centralized exchange, you don’t need a “middleman”; there is no central authority or main server required to make a transaction.
✓ Since there is no main server to conduct or facilitate your trades in this type of exchange, you remain in complete control of your coin and private keys
✓ The exchange cannot be hacked and robbed of your coins
✓ This exchange is great for connecting to your cold storage wallets
✓ No matter how large your transactions are, you always remain anonymous
✗ These exchanges have a much lower trading volume, which means that it can be harder to buy or sell your coins quickly.
✗ There are fewer coins in these exchanges and fewer coin options, too.
✗ The user interfaces are a bit more difficult to navigate and may take longer to learn.
✗ Transactions can take longer than traditional exchanges and the fees are much higher.
✗ Poor or no customer service, which means if anything goes wrong with your transactions, you’re on your own!
Examples of Decentralized Exchanges: EtherDelta, IDEX, Waves Dex
A broker exchange is one that allows you to buy into crypto. In other words, with a broker exchange, you can exchange your fiat currency for cryptocurrency or cash your crypto out for fiat. This is the best cryptocurrency exchange type for beginners.
✓ These are highly professional exchanges that are well-funded
✓ They often have good customer service and their user interface is easy to learn and use, making them ideal for crypto newbies
✓ You can connect your bank debit/credit cards to these exchanges
✓ You can buy and sell your crypto here using your local currency
✗ These exchanges only have the most popularly used and accepted coins on their platforms
✗ The transaction fees are higher than most exchanges
✗ They aren’t very secure; if the broker exchange gets hacked, then you could lose all of your coins
✗ KYC (Know Your Customer) rules apply. This means that ID verification is required to use these exchanges.
Examples of Broker Exchanges: Coinbase, CoinMama, CEX.io
A P2P (peer-to-peer) exchange is one that allows you to buy or sell cryptocurrency without ID verification. You can even buy or sell crypto with fiat or cash. Buyers can find sellers through these platforms on their own or they can set a price they’re willing to buy/sell at and the platform will match them with buyers/sellers.
✓ These exchanges offer direct peer-to-peer buying and selling
✓ Sellers can choose the price they want to sell for and can sell for more than the fixed market price.
✓ You can remain completely anonymous.
✓ You can purchase crypto using cash in some cases
✗ P2P exchanges have the highest fees of all the other exchanges
✗ Sellers choose the price which they will sell their crypto; so, buyers are often left to buy higher-priced coins.
✗ This type of exchange isn’t good for transacting large amounts of crypto
✗ Using a P2P exchange can be a bit unsafe and susceptible to scams, depending on who you’re trading with
✗ Not many cryptocurrencies are available for this style of trade
Examples of P2P Exchanges: LocalBitcoins, LocalEthereum
What is The Best Cryptocurrency Exchange
The Biggest Trading Exchanges
Now that you understand a bit more about the different types of exchanges, let’s look at the biggest and most popular exchanges.
The leading trading exchange in the crypto sector — Binance started in China and then moved to Japan and Singapore before settling in Hong Kong. This new, Asia-based exchange is the most used around the world and is popular for its low trading fees and fast transactions.
- Multi-Device Support
- High Performance
- Multiple Language and Country Support
- Adopted Technology
- API Support
- Experienced Team
The platform offers both basic and advanced user interfaces, so newbies and experts can both use the exchange with ease. You can find many different coins on the platform and cool options for trading pairs, including BTC, ETH, BNB, and USDT. As mentioned earlier, the fees on Binance are cheap and you can also trade on the platform anonymously.
As for the service itself, Binance has one of the best referral programs. This allows users to make a commission when their friends sign up and transact on the platform. They have a good team and offer great customer support.
There are no fiat transactions and you cannot connect your Binance account to your bank account or credit cards. This means you must buy your coins elsewhere if you’re looking to use fiat — you can do this using a broker exchange, and then transfer the coins to your Binance account. This also means you can’t withdraw to fiat either.
If you’re looking to withdraw your crypto from Binance to another wallet of yours, any transaction over 2 BTC requires ID verification.
If you’re a more experienced trader, you might find the lack of leverage trading and advanced order placement to be inconvenient for you.
Fee: 0.1%. However, if you pay with BNB token, the fee is 0.05%
Founded in July 2011, GDAX (Global Digital Asset Exchange) is an American exchange and the sister exchange to Coinbase. It allows users to trade USD and Euros for BTC, BitcoinCash, ETC and LTC, and British Pounds for Bitcoin and others. It’s great for users who want to trade between cryptos and are already using Coinbase.
- World-class user interface
- Multiple Fiat and Cryptocurrency Pairs
- API support
- Margin Trading
- Accepts Bank Transfers
It’s a trusted and secure platform that offers margin trading with leverage from 2x to 3x, which is something that experienced traders will find useful. It also has other great features for traders, such as advanced order types and placement. Its fees are cheaper than Coinbase and they have excellent customer support.
GDAX doesn’t have the same wide variety of cryptos that Binance has. It also has limited trading pairs and slighter higher fees than Binance. It does not have multi-device support and its analysis charts are not nearly as professional in comparison.
The Biggest Decentralized Exchanges
This decentralized trading exchange was launched in 2017 and was founded in the Republic of Panama. It features ETH and all Ethereum-based ERC20 tokens, and you can use IDEX to manage all your Ethereum-based funds.
- There are four ways to open your wallet on the exchange: Keystore File, Manually Entered Private Key, MetaMask or use the Ledger Nano S hardware wallet
- High level of security
- Low Fees
- Good Customer Service
- The user experience of a centralized exchange
- Leverages smart contracts to manage user transactions
IDEX uses smart contracts that let users manage their own private keys and securely trade on a peer-to-peer platform. It has the largest trading volume among the best-decentralized exchanges, at $5.7M USD per day.
Its rich interface is not user-friendly. There is no mobile app or multi-device support. You can only trade Ethereum and other ERC-20 tokens on this platform.
Fee: 0.1% for market makers; 0.2% for market takers
Made by Etherboost, Etherdelta is another decentralized platform that only supports Ethereum and ERC-20 tokens. It is similar to IDEX, however, its popularity has decreased as transaction times are much slower.
- Lets you manage funds directly with your own Ethereum wallet
- Allows you to sync a Ledger Nano S or Meta Mask wallet to your account
- You don’t need an account to begin trading
Just like IDEX, EtherDelta uses smart contracts to let users manage their peer-to-peer trades securely using their own private keys. To use this exchange, you can use your existing Ethereum account. You don’t have to start an account on the platform.
The user interface, while useful, is not beginner friendly. It does not have a mobile app or multi-device support. You can only trader Ethereum-based coins through this exchange. It doesn’t have as many features as IDEX.
The Biggest Broker Exchanges
Coinbase is a digital currency wallet and platform that was founded in June 2012 in San Francisco, California. Using Coinbase, people can deposit their local currency to buy into some of the most popular cryptocurrencies. With 10 million users and growing, it is considered the most popular broker exchange on the net.
- Top crypto assets such as BTC, ETH, LTC, BCH
- Offers insured Bitcoin deposits
- Offers instant buy feature
- High liquidity
- Easy to use
- API Support
Coinbase is a safe platform that’s backed by trusted investors. It makes it easy for first-time investors to buy BTC, BCH, ETH, and LTC. They accept over 55 fiat currencies. Along with allowing users to buy and sell a cryptocurrency, Coinbase also provides wallet and merchant services.
This, in my opinion, is the best cryptocurrency exchange for purchasing using your local currency.
Coinbase has limited payment methods, despite the fact it allows users to trade fiat for crypto. ID verification is required. It also monitors your account and can report your activity and funds to the IRS and SEC. It is only available to the US and 31 other countries. Even though it is well funded and managed, its customer service isn’t the best.
Fee: Ranging from 1.49% to 3.99%
This broker exchange is a popular platform that people use to buy into crypto. Considered one of the quickest ways to buy into crypto, this Slovak Republic-based company was launched in 2013.
- Live pricing in USD or EUR
- Allows the purchase of fractions of BTC
- Easy to review your orders and transactions
- Purchase crypto directly from the site
- Multi-language support
One of Coinmama’s best features is that it “locks” your BTC or ETH rate at the time of purchase. That way, you get the exact amount of cryptocurrency you paid for.
You can only buy crypto through Coinmama; you can’t sell through the platform. They do not accept PayPal, American Express or Discover and you can’t link it to your bank account. It doesn’t have a smartphone app or multi-device support. It also requires ID verification and only sells BTC and ETH.
There is also a transaction limit of 5000 USD/EUR per day and a credit card purchase limit of 30,000 USD/EUR per month.
Fee: Transaction - 5.5%; Credit Card Purchases - 5%
The Biggest P2P Exchanges
LocalBitcoins is a platform for sellers and buyers from all over the world to transact and trade Bitcoin between themselves. It was founded in 2012, which makes it one of the first and oldest peer-to-peer Bitcoin exchanges. Its headquarters are in Helsinki, Finland.
- Escrow service to ensure trades are completed and both buyers and sellers are protected
- Merchant services to receive Bitcoin from customers
- Enables online or face-to-face Bitcoin transactions by matching people based on location
- View profile and feedback history of your counterparty to assess them before a trade
- Accepts almost any payment method acceptable to the community
- No ID verification required
- Pay with physical cash
Through LocalBitcoin, users are free to buy and sell Bitcoin amongst themselves at the price they choose and agree upon. There are no limits to buying and selling and any payment method that the trading parties agree on is acceptable. It offers a quick sell feature to help sellers find buyers quickly.
This is the best Bitcoin exchange if you’re looking to stay completely anonymous or want to buy Bitcoin with cash!
Due to the nature of the exchange, some people on the platform are scammers, so users need to be careful. The personal nature of the trades makes this platform unsuitable for people looking to do large transactions unless you meet face to face and purchase with cash.
LocalEthereum is very similar to LocalBitcoin, a service that allows you to buy and sell Ether in a P2P marketplace. It’s a worldwide exchange that connects buyers and sellers to trade with each other anywhere in the world.
- Like LocalBitcoins, there’s an escrow service to ensure trades are completed and trading parties are protected
- Any payment method can be used if the community agrees to accept it
- No limits to the size of the transaction
- Easy to use
- One of the safest peer-to-peer crypto exchanges to use
- Offers “identity coins” to help identify wallet addresses and prevent the mistake of accidentally sending coin to the wrong wallet
LocalEthereum is a trusted platform among the P2P exchanges with competitive fees that lets you choose your own payment options. Its escrow system protects both buyers and sellers.
This is the best Ethereum exchange if you want to stay completely anonymous or want to buy Ethereum with cash!
As with any P2P exchange, the only real downside is the possibility of getting caught by a scam. You should always do your research before using p2p platforms so that you can avoid getting scammed!
Fee: 0.25% for sellers; 0.75% for buyers
Best Cryptocurrency Exchange 2020
While the best cryptocurrency exchange varies per person based on their unique needs and reasons for using the exchange, my favorite choice is Binance.
I think Binance is the best cryptocurrency exchange because they have a good track record. They have a large selection of coins to trade and a huge volume. Their fees are cheap, the interface is easy to use, and the customer service is good! Not only that, but its quick deposits and withdrawals make it great for quick trades.
Of course, everyone’s opinion on the best cryptocurrency exchange will be different. Again, that’s based on your reasons for using the exchange, where you are located and the size and frequency of your transactions, among other things.
However, here is a comparison table of different cryptocurrency exchanges — including some that I have spoken about today and some others you might want to look at!
So, Which is the Best Cryptocurrency Exchange for You?
If you’re just getting started and want to buy crypto with your local currency:
Use Coinbase if you are in its select group of 32 countries. It is the top crypto exchanges that will let you spend your fiat on crypto. If you’re elsewhere, Coinmama might be better for you. Of course, Coinmama can’t be used in Europe, Australia or North America.
If you want to trade multiple cryptocurrencies with low fees and don’t want to use ID:
Use Binance. You don’t need an ID for transactions below 2BTC. While other exchanges, like P2P exchanges, don’t require ID at all, Binance has the biggest volume and largest selection of Alt Coins. Fees here are cheaper than on other exchanges and can get even cheaper if you pay them with the Binance BNB coin.
If you want to buy Bitcoin or Ether with cash and remain anonymous:
Use a P2P network like LocalBitcoins or Local Ethereum. They allow you to buy your coins for the price you want at the volume you choose. Plus, you can use any payment method your counterparty agrees to.
So, you now know the top cryptocurrency exchanges and how they are different from one another. The next step after knowing the best cryptocurrency exchanges is to figure out your investment strategy.
I wish you all the very best of luck on your crypto trading/investing journey! And just remember — stay safe out there.