Picking the Best Cryptocurrency Exchange Site
It doesn’t matter whether you are completely new to crypto or have been trading crypto since 2010. It is equally important for all of you to choose the best cryptocurrency exchange site for your individual needs. We won’t lie to you. There is no “one size fits all”-solution, no single answer that is correct in all conceivable circumstances. None of the top 10 Bitcoin exchanges may be good for you, even if you just want to trade Bitcoins. Different people should trade at different exchanges. The absolutely easiest way to find the best cryptocurrency exchange site for you is to use the Exchange Finder. It’s a free tool that matches you with the best cryptocurrency exchange site for you based on your answers to a few questions.
However, if you feel that you have a lot of time to waste and you don’t want to use the exchange finder and you want to pick the right exchange all by yourself, this is a 7-Step Guide that will help you with doing just that.
Step 1 – Check the Cryptos Traded
The first step to check is what cryptos that you can trade at the relevant exchange. If you’re just looking to buy some Bitcoin, then you’re in luck – almost all exchanges offer that possibility. If you’re looking for a bit more exotic coin, or don’t even know what cryptocurrency to invest in, then you must ensure that your exotic coin is at all traded at the relevant exchange or that the exchange has a wide range of available cryptocurrencies. Many exchanges offer only one trading pair (BTC against USD or similar), whereas some exchanges have several hundred different trading pairs.
Compare which exchanges have which coins in our Cryptocurrency Exchange List or use our Exchange Finder.
Step 2 – Check that you are eligible
Step 2 is to check if you are at all eligible to trade at the relevant exchange. The best crypto trading platform for you might not even be available to you. Most exchanges have an on-boarding process where you need to state which country you are from. Then, if you state that you are from a country whose citizens/residents are not eligible to trade at the exchange, the exchange will stop you from becoming a customer. The most common jurisdiction to exclude is the USA and we have compiled which exchanges support US-investors in our Cryptocurrency Exchange List and – of course – in our Exchange Finder. If you are from another jurisdiction and want to know if your eligible, check the relevant exchange’s FAQ. Normally you can find the answer to which countries the exchange supports there.
Step 3 – Check the trading fees
Next step: Check. The. Fees. Check it twice, check it three times. A small fee might seem insignificant at first but remember that due to the phenomenon of compound return it can add up to great losses/winnings in the long-term. The trading fees usually consist of the maker fees and the taker fees. To summarize, a trade gets the taker fee if the trade order is matched immediately against an order already on the order book. The effect of such a trade is removal of liquidity from the order book. A trade gets the maker fee if the trade order is not matched immediately against an order already on the order book. The effect of such a trade is addition of liquidity to the order book. When a fee is flat it is equally high or low irrespective of whether you are a taker or a maker.
The industry average can be argued to be 0.25% for takers and slightly less for makers. This means that if you are a taker in an order worth USD 10,000 the exchange takes USD 25 as its fee for executing the trade. But there are also exchanges offering substantially higher or lower fees. Some exchanges charge a whopping 2.00% (for the USD 10,000 order that would correspond to USD 200) and others offer -0.10% (meaning that you get paid to trade, for the USD 10 000 order that would correspond to receiving USD 10).
Compare the trading fees of all top crypto exchanges at our Cryptocurrency Exchange List using the sorting tools.
Step 4 – Check the withdrawal fees
Step 4: So you’ve checked the trading fees in detail and think you have a good grip on the fees. Well, you’re not out of the woods yet. There is one remaining but very important fee to consider – the withdrawal fee. The withdrawal fee is charged when you want to take out your balance from the account you have at the exchange. Some exchanges offer competitively low trading fees, but then hits you on your way out with their withdrawal fees. The industry average, for BTC-withdrawals, is 0.000812 BTC per withdrawal. However, there are also exchanges charging as much as 2.0% of the entire withdrawn balance.
Compare the withdrawal fees of all top crypto exchanges at our Cryptocurrency Exchange List using the sorting tools.
Step 5 – Check Deposit Methods
Step 5: The exchange has the cryptos you want to trade, you are eligible to trade, and the fees are competitive. Now the only thing remaining is to start trading, right? Wrong. You also need to check whether the exchange supports the deposit method that you want to use. A lot of exchanges do not accept any deposit with “fiat currencies”. This means that you have to be a previous owner of cryptocurrency to be eligible to trade at the exchange. Some only accept deposits through specific payment service providers, such as Perfect Money (if you want to purchase Bitcoin via Perfect Money, one choice is Exchange.blue). Others don’t accept credit card deposits. If you need to pay by credit card, you will have to choose another exchange.
Compare which deposit methods that are supported at each of the top crypto exchanges at our Cryptocurrency Exchange List using the sorting tools.
Step 6 – Check Trading Platform
Step 6: Different people have different preferences when it comes to the trading platform (i.e., how they want price movements of different cryptocurrencies to display, how the order books should look etc.). If you are into technical analysis, you might have a strong preference on what information that shall be easily obtained through the charts etc. And even if you’re not into technical analysis you might have a strong preferences. There are numerous different opinions here on what the “right setup” is. We strongly suggest you do your own research based on your very own preferences.
Step 7 – Check for “Red Flags”
The last step is a more general one which we would like to call “check for red flags”. Many things can be red flags but – generally speaking – the absence of info is the biggest one. Is there no info on trading fees? No info on withdrawal fees? No info on the home country of the exchange? Then we would recommend you to go with another exchange. No info equals risks and you should always avoid unnecessary risks.
We hope that you have a had a pleasant and educating read and that you are now in a better position to choose the best cryptocurrency exchange site for you. But remember, the easiest and best way to choose the best cryptocurrency exchange site for you is our Exchange Finder. The second easiest and second best way is to use our Cryptocurrency Exchange List. We promise.
If you thought this guide was helpful, please also read our guides on How to Get Started with Cryptocurrency, How to Invest in ICOs and How to Stay Safe in Cryptocurrency.