It can seem a little daunting when you decide to start investing in cryptocurrencies. However, a great place to start is on a crypto exchange where you can buy and sell all types of cryptocurrencies. The best-established exchanges operate similarly to online brokerage firms and offer multiple types of tools for both new investors and seasoned pros.
Multiple factors should be considered when picking a preferred exchange. These considerations include how quickly transactions are processed and how many layers of security you must set up. There are also financial aspects such as if fees are charged and which assets are supported by the exchange. Here are some of the most well-established exchanges that you should be aware of.
Coinbase
Since being founded in 2012, Coinbase has been a go-to option for crypto traders. There are currently over 98 million users on the platform, making it one of the largest in use.
It was designed to be very user-friendly and easy to navigate. For beginners, it is incredibly accessible. It is simple to sign up, and onboarding is straightforward. The best part? When you register, Coinbase gives you some Bitcoin as a welcome gift.
For more experienced investors, Coinbase offers the ability to monitor alternative coins, commonly referred to as altcoins. Currently, it has a catalog of over 150 currencies. This is a unique benefit because many exchanges fail to keep players updated on some of the newer currencies that might have just arrived on the internet.
Coinbase is also very adept at keeping its users aware of new crypto projects and opportunities for investment. These updates are handy for those who like to be aware of how their investments might be utilized in the future and enjoy keeping updated on the news surrounding digital wallets and cryptocurrency.
However, Coinbase is starting to shut down aspects of its website, such as Coinbase Pro. As it shifts in focus, investors need to keep updated on the offerings.
Kraken
Founded in 2011, Kraken was aptly named after one of the most impressive mythical creatures of the sea. Like Coinbase, it has been designed to serve both casual traders and professionals.
Amateur traders can get started with an investment as small as $10 and will enjoy the ability to access dozens of cryptocurrencies. It has also developed new user guides and a resources center that is easy to navigate.
If you decide to purchase the far more powerful Kraken Pro, the world of crypto trading opens to you. Included in that purchase is access to advanced tools such as margin trading, 120 cryptocurrencies, 13 order types, and crypto futures. It is no surprise that Kraken Pro has been acquired by many different parties such as brokerage firms and high-frequency players.
Unfortunately, Kraken is not available in all countries or US states and territories. Kraken does not have the most robust account funding options, forcing many customers to use wire transfers to complete payments. Finally, Kraken charges relatively high instant-buy fees, some as high as 1.5%, with the only way to avoid these fees being to purchase Kraken Pro.
Cash App
Cash App was originally developed in 2013 to serve as an online banking solution. It gained notoriety as a tool to complete peer-to-peer money transfers, store digital currency and operate as an online bank. However, in 2022, CEO Jack Dorsey decided that Cash App would begin exploring the potential benefits of a more focused cryptocurrency investment agenda. The result is Cash App’s phenomenal Bitcoin trading network, where users can purchase and trade Bitcoin in seconds.
While it is not revolutionary for an online banking platform to allow investments in cryptocurrency, Cash App is unique in its incorporation of third-party applications. When a customer decides to make a withdrawal of their Bitcoin, they are able to deposit it into their preferred wallet. This flexibility is one of its most significant selling points.
However, a drawback to this flexibility is that Cash App utilizes a custodial wallet for its customers. A custodial wallet means that rather than individuals having sole access to their digital wallets, they are technically entrusting Cash App with their holdings. While this is avoidable by transferring funds to third-party wallets, it is still a consideration when choosing an exchange.
Robinhood
Robinhood gained a large percentage of its user base when it emerged on the scene with a focus on traditional investing options. However, realizing the potential surrounding cryptocurrencies, it developed and released its crypto trading page, which enabled investors to buy some of the most notable altcoins on the market, such as Ether, Dogecoin and Litecoin.
Because Robinhood was perfectly tailored to the mobile interface, it adopted certain perks such as not charging a commission fee for trading and requiring only US$1 to begin trading on the platform.
Robinhood utilizes a hot and cold cryptosystem to handle people’s investments. Some prefer hot storage, which consists of an online integrated crypto wallet, while others prefer cold storage, which is entirely offline and, for that reason, considered more secure from tampering.
One drawback of Robinhood that clients should consider is the limited customer service it provides – this can be a frustrating experience, especially if you need quick answers about your money.
Binance
Although it was founded in 2017, Binance has made waves in a short amount of time. It currently has over 500 cryptocurrencies – including stablecoins and altcoins – available to buy and sell on its website. It processes over US$1bn daily. This volume of trades is encouraged by its low trading and non-trading fees and ability to deposit money with a debit or credit card.
It has made great strides in making crypto trading accessible by creating the Binance Academy, which teaches new investors about different coins, rules and norms, and the blockchain. Its accessibility is also ensured by avoiding high trading fees, precise charting tools and a mobile application.
While it is one of the biggest exchanges in the world, it is unfortunately not available in the US (the US has a different and frankly less impressive version). There is also no free withdrawal option.
