Best Exchanges for Trading Crypto
There are a lot of crypto exchanges out there. Gone are the days when you were strapped for choice. Today, the choice is overwhelming. This is not only a challenge for those new to crypto. But it also means those who are currently using an exchange constantly have to wonder if they really do have the best deal. Do not worry, because in this chapter I am going to give you exactly what you need to know about the best exchanges on the market right now. I will cover both pros and cons and compare them side by side. This is to help you assess your options and pick the right crypto exchange for you. I'm sure that many of you are like me and some of your friends make fun of you when those crypto markets are in the toilet. However when those markets are blasting off then I certainly get asked the question; what's the best crypto exchange? Every single time I turn around and just tell them that they're asking me the wrong question. The better one to ask is; what's the best crypto exchange for me? After all we all prioritize different things. So there really is no one-size-fits-all answer here. With that in mind I want to be straight up and just say the following exchange picks are in no particular order. Still first I will start with Coinbase Pro which is an advanced trading platform, operated by Coinbase. So who are these Coinbase people? Well, they were one of the first companies to enter the crypto exchange game back in 2013. The company is based in San Francisco and has 35 million users that have traded 220 billion dollars in volume. Another fact is that Coinbase's most recent round of funding for 300 million dollars valued the company at 8 billion. This means it’s a pretty serious crypto exchange. So that brings me on to a key question; who can use Coinbase Pro? Well the good news is that Coinbase is accepted in over 100 countries. So the chances are that you'll be able to trade on Coinbase Pro. This also includes the US in any state other than Hawaii. Signing up to Coinbase Pro is pretty straightforward, but the thing to know is that you need to create a regular Coinbase account first and then log into Coinbase Pro. Your login and password for Pro are exactly the same as your basic Coinbase account. Once you log into Coinbase Pro you'll see a trading panel. Here, you can place a market or limit order and stops. I know that may sound complicated and daunting to crypto newcomers but I can promise you that it is quite straightforward. Another feature offered on this exchange would be leveraged trading up to three times. I would not recommend using leverage unless you know what you're doing and the comfortable trading spot markets. For many newbies this is a very fast way to get to a place called “wrecked”. Not a place that I recommend to anyone to visit. When it comes to deposit methods it's a little all over the shop at Coinbase and dependent on which country you're based in. But major supported payment options include bank transfer, PayPal debit and credit card. Now let’s look at the fees. It can be tempting not to pay too much attention to these, but they do add up and can seriously eat into your long-term profitability. There are two main fees here; deposit and withdrawal fees and trading fees. Let's look at deposits first. The thing to know is that ACH and swift deposits are completely free. USD wires are charged at $10 and SEPA Euro deposits incur just 15 cents in fees. Withdrawals are free for ACH 25 for USD wires 15 cents for super transfers and $1 for swift. The good news for people wanting to withdraw crypto off the exchange is that this is entirely free. If you are like most people and are trading less than 10 000 per month, then you'll be paying 0.5% in trading fees. That scales down the more volume you do.
The next thing to talk about is the range of cryptocurrencies available for trading on Coinbase Pro. Some people might use Coinbase Pro to just buy Bitcoin and send it over to another crypto exchange to buy more altcoins but right now about 40 different cryptos are available for trading. That's not too bad at all. All of us hope to never have to use customer support, but it is something worth considering when choosing an exchange. After all it's annoying if you have a problem and you're left hanging for ages. At Coinbase Pro you can submit a support ticket through their form and they'll get back to you over email. But being honest, personally had my patients stretched to breaking point by Coinbase support. They just seem to ignore me for days so just be aware of that if you opt for Coinbase Pro and pray you never need to reach that customer support. Coinbase Pro does offer phone support 6 am and 6 pm but here's the bad news. These support agents cannot help with any account specific queries like order statuses, specific transactions or your account history. Every customer support query I've ever made has been linked to one of these things. So this type of support might as well not be there if you ask me. The next thing to discuss would be security. Coinbase Pro holds 98 of user funds offline. Those private keys are then split with redundancy, encrypted and copied to super secure USB devices and paper backups. These are then popped in safe deposit boxes scattered throughout the World. So if you want to keep your funds on an exchange, Coinbase is pretty secure. Coinbase Pro also has FDIC insurance for US dollar accounts. This is the same insurance banks use to protect customers. What that means is that us dollar balances below a quarter of a million dollars are insured by the US government. Good news if you're a US citizen and are holding us dollars on Coinbase. In terms of securing your account, Coinbase Pro has a host of security features like two-factor authentication. One major drawback that I need to tell you about is the frequent exchange outages at times of high market volatility. That can be annoying if there is a massive market move which you can't take advantage of. Finally, Coinbase Pro does offer IOS and android mobile apps for those that want to trade on the go. If crypto trading bots are something that you're interested in then the good news is that most major third-party bot software supports Coinbase Pro. Now you know the ins and outs of Coinbase Pro, you might ask; who is it for? Well, honestly Coinbase Pro is probably the easiest one to use but you should know that you'll be paying some of the highest exchange fees out there for that privilege and dealing with less than stellar customer support. If you're new to crypto and are wanting an easy way to get into crypto using fiat, then Coinbase Pro is certainly worth considering. But there are probably better options out there for more experienced crypto traders. To get started with Coinbase, please visit https://www.coinbase.com/ Once you have registered, you can also be able to log on to Coinbase Pro on the following link: https://pro.coinbase.com/
The next exchange I will introduce is called FTX and this one is for advanced traders out there. FTX is an exchange founded in May 2019 and is registered in Antigua and Barbuda. Their offices are based in Hong Kong. The exchange has also raised 8 million dollars in external funding and was raised by Alameda research, a quantitative trading firm that trades up to one billion dollars a day and manages over 100 million dollars in assets. Who were some of those investors? Well one was Binance who announced a strategic investment in FTX earlier in 2020. The key takeaway here is that FTX is a serious crypto exchange with some serious backers. When it comes to blocking countries, FTX doesn't accept residents of the United States, Cuba, Iran, Syria, North Korea or Antigua and Barbuda. So if you're living in any of those places then you are out of luck here. In terms of features, you first have the standard spot markets with dozens of different cryptocurrencies to choose from. Then you have the widest range of perpetual futures markets that I've seen. Then you have a host of three-time short and long leveraged tokens, volatility tokens and some really interesting indexes. You can buy a basket of coins on FTX using their index or maybe you just want to get exposure to defy easily by getting their defy index. If you're an options trader, FTX has also got you covered with some Bitcoin options as well. The exchange also offers an OTC portal so those whales can get those trades done with minimal slippage. A great deal if you need to get large block trades done. So FTX has a whole host of features geared towards the more advanced traders out there. But, what are the fees? Well taker fees start at just 0.07 and scale down from there according to trade volume. FTX is the cheapest exchange. When it comes to deposits and withdrawals for crypto assets FTX has the best price possible; free. Though the thing to know here is that if your deposit or withdrawal amount exceeds your trade volume on the exchange, then you might be charged a 0.1% fee. So you probably don't want to deposit here if you're not going to trade much. When it comes to fiat deposits credit cards and wire transfers would be the methods available to you. I need to be honest and warn you that if you're withdrawing fiat using FTX then you'll incur a $75 fee for withdrawals under $10,000. In terms of crypto support, FTX doesn't offer the widest range of cryptos for spot markets but it does offer the largest range of perpetual futures that I've come across and a ton of special futures products like the coin index. So, if that's what you're looking for, then FTX is a great choice. In terms of the support, FTX has simple email support options. When it comes to security, FTX operates a cold storage protocol, so the majority of the funds are stored offline. For individual accounts, they also have two-factor authentication and you can whitelist IP addresses too. Finally, as FTX operates a leveraged exchange one of the major risks is volatility and that's why FTX operates an insurance fund. This insurance fund acts as a reserve in case liquidations of losing positions cannot be done fast enough. That insurance fund currently sits at about 2 million dollars and an additional 5 million FTT tokens. So, who is FTX for? Well, the exchange is for experienced traders looking to use those instruments like perpetual futures and leveraged tokens. If that's want you wish to trade, you won't find a better selection anywhere else. If you're interested in signing up to FTX, please visit https://ftx.com/en
My next exchange pick is called Binance. The first thing to note is that there are several versions of the Binance exchange. You have the likes of Binance Singapore, Binance Uganda, Binance US etc. The thing to know is that these are different exchanges from Binance.com. Which you can think of as Binance's global exchange. Very simply, Binance is the biggest exchange in the world and processes around 2 billion in daily volume. So who can use Binance.com? Well if you're based in the US, Uganda or Singapore, you'll have to use the version of the exchange for your respective countries. Aside from that, the only countries blocked are those that fall under US sanctions. When it comes to exchange features, on Binance you get access to the most extensive crypto spot market in the cryptoverse. A suite of advanced trading tools such as the ability to trade on margin and an over-the-counter service to get you better pricing without slippage. Then, there are a host of advanced derivative products. These enable you to dabble in futures markets with up to 125 times leverage and to long or short tokens with up to three times leverage. Next you have crypto finance services like Binance earn, which allows you to earn bank interest rates on your crypto. The Binance crypto card gives you cashback of up to eight%. You also have access to flexible collateralized crypto loans. Then there are exclusive initial exchange offerings that you can take part in on the Binance launch pad. So there are plenty of features to Binance. When it comes to deposit methods all crypto deposits are free. Withdrawal fees are variable and dependent on the crypto or fiat currency you're getting off the exchange. Binance also supports some of the lowest fees for any exchange too. Remember I mentioned before that you would get rinsed for 0.5% in trading fees on Coinbase Pro? Well, Binance kicks things off with a 0.1% maker and taker fee. Pay that fee with BMB coin and you'll get another 25 off. Trade a ton, and you'll get further fee discounts too. Binance also supports a range of deposit options for many different currencies. Yet they have recently activated Visa and Mastercard deposits in addition to methods like bank transfers. Bank card fees for Euros and GBP attract a fee of 1.8%, whereas UK faster payments and SEPA bank deposits are entirely free. That brings me on to supported cryptos. In short, literally almost any crypto worth looking at is listed here. In terms of customer support, Binance has you covered 24/7 with an online ticket system. Those Binance customer support agents will then get back to you over email. I have never had to wait more than 24 hours to hear back from them. When it comes to apps, Binance has gone the extra mile with an excellent mobile app for android and ios and a desktop app for mac os, windows and Linux. So if you like apps, then Binance has you covered. Touching on security, Binance does use best practices when it comes to cold storage, multi-signature wallets, tiered access and enhanced cyber security detection systems. But the exchange did get hacked in 2019 for 7000 Bitcoin which was about 2% of all its Bitcoin holdings. What we can learn from this, is that Binance holds about 98% of its users funds in cold storage. Pretty much the same as Coinbase Pro. With all that being said users impacted by the hack were all reimbursed by Binance. Needless to say, Binance is supported by every third-party trading bot worth considering. So with all that in mind, who is Binance for? Well, honestly Binance is for anyone who isn't shy of dabbling in altcoins. To check out Binance, please visit https://www.binance.com
Next Exchange on my list is called Uniswap. Uniswap is a decentralized market making exchange. It's essentially an open source dap built on Ethereum that enables you to swap eth for any ERC20 token in a truly decentralized way. All that is combined with a simple and easy to use interface that also connects to popular web 3.0 wallets like Metamask. How does Uniswap differ from centralized alternatives like Coinbase Pro? Well, on Uniswap there is no company holding your funds and instead, you're always in control of your own crypto assets. In other words, it is non-custodial. I know that may not sound like a big deal but try telling that to the poor souls who had their crypto controlled by the likes MTgox or cryptopia. The lesson to learn from these centralized exchange disasters is that things can go bad in a very big way if you trust the wrong company with your crypto. Indeed that's the key reason why so many people in the crypto space support decentralized exchanges. Here's something that a ton of people don't know. In September 2020 Uniswap actually reported more trading volume than Coinbase. Gone are the days when DEX-s were a plaything of crypto geeks. The upshot of Uniswap's decentralized nature is that there are no country restrictions to speak of. In terms of unique features, liquidity pools are what makes Uniswap decentralized and are the mechanism through which you can actually earn trading fees with Uniswap. These are basically pools of tokens which sit in smart contracts. Another feature that privacy adds value is that there is no KYC to speak of on Uniswap. So if you value that, then this is the exchange for you. Because Uniswap is non-custodial, that means there are no such things as deposit or withdrawal fees. Instead, you'll pay Ethereum gas fees to send those tokens to the protocol and a 0.3 liquidity provider fee to swap them. I do need to give you a brief warning about these Ethereum gas fees. If the network is super congested, then these can cost you a lot! Indeed, in early September 2020 a straightforward ETH to Defi swap on Uniswap cost $55 in gas fees. Since then, these fees have fallen to more reasonable levels but just keep an eye on those fees before you make a swap. Another thing to note is that Uniswap is solely an ERC20 crypto to crypto exchange. That means to use it, you'll need to have at least some Ethereum or ERC20 tokens already. There are no fiat deposits or withdrawals here. In terms of supported cryptocurrencies if you want to get your hands on an ERC20 token then chances are it's listed on Uniswap. There is literally hundreds of cryptos but just be aware that you won't be able to get your hands on any cryptocurrencies outside of the Ethereum ecosystem here. Next, let’s look at the Customer support. As Uniswap is a DEX, things work a little differently here. The best way to get help here is by bumbling into the Uniswap discord group and asking your question in the support chat there. For those of you that are trading whilst out and about, Uniswap doesn't really have a dedicated mobile app. However you can launch the app in your mobile browser and connect to a mobile wallet. The Uniswap UI is well optimized. Seeing that Uniswap is non-custodial you might not think there are any security concerns. But the key risk here is the same as any other D5 project and that would be smart contract bugs. I've not heard of anything on that front, but just be aware of that. So who is Uniswap for? Well, in my opinion it's the perfect exchange for anyone who is reasonably experienced in crypto and wants to keep control of their private keys and not entrust their funds to a centralized exchange. Privacy hawks will also love the lack of KYC. But some might find the lack of support for crypto outside of the Ethereum ecosystem limiting and gas fees can sometimes make the exchange excessively expensive to use. To get started with Uniswap, go to https://uniswap.org/ Also, while I've explained about exchange security, I don't recommend anyone keep large coin holdings on a centralized exchange unless you're actively trading. No matter how secure an exchange might be, there is simply no substitute for a hardware wallet to give you that maximum security. It's an old saying but it's always been true: “not your keys, not your crypto”.
