Bitcoin Exchange Guide Reviews & Comparison
Last updated: 5/30/19
Choosing the best Bitcoin exchange can be an exhausting task. This post will explain the important factors to take into account when choosing a Bitcoin exchange. I will also give you a review summary of the leading Bitcoin exchanges.
Bitcoin Exchange Guide Summary
The main things to look for when choosing an exchange are:
- What type of exchange is this? (Broker, trading platform, etc.)
- Does this exchange have the coins I want to trade?
- Does this exchange accept users from my country?
- Does this exchange accept my payment method?
- What are the fees and buying limits for the exchange?
Finally, before deciding on an exchange make sure to read several online reviews to get a feel of the exchange’s reputation. Here are my top picks for the best Bitcoin exchange by category:
eToro users – Cryptocurrencies are a highly volatile unregulated investment product. There is no EU investor protection. Your capital is at risk.
If you want a more detailed explanation about Bitcoin exchanges and reviews about other exchanges keep reading this post. Here’s what I’ll cover:
- How do You Trade Bitcoins for Cash or Real Money?
- Types of exchanges
- What is the Best Bitcoin Exchange?
- Exchange Terms
- Exchange review summary
Don’t like to read? Here’s a video version of this guide:
Bitcoin exchanges are companies that allow you to exchange “real money” (i.e. USD, EUR, GBP, etc.), also known as fiat money, to Bitcoin (and vice versa). This means you can either covert fiat to Bitcoin or Bitcoin to fiat. This is usually done via a website the helps you facilitate this trade.
It’s important to understand that not all Bitcoin exchanges are alike. Some allow you to trade with other users, while other will only sell you Bitcoins directly. Some will not even give you Bitcoins but will only allow you speculate on the price. Let’s break down the different types of exchanges.
Brokers are sites that simplify the buying process by allowing you to buy coins through them directly at a predetermined price. When you buy from broker sites, the process is usually much simpler and less confusing, but it’s also more expensive. Examples of known brokers: CoinMama, Coinbase, .
Trading platforms are sites that automatically connect buyers and sellers. This means that you buy from people who’ve placed sell orders on the site without ever communicating with them directly. The platform usually takes a small fee for the service.
Conducting transactions on trading platforms is usually the cheapest way to get bitcoins, but often it’s not very user friendly. Trading platforms have options such as limit orders and stop losses that can confuse inexperienced users. Also, when you place an order, it may not be fulfilled immediately due to a lack of sellers at the price at which you want to buy. Examples of known trading platforms: Cex.io, Binance.
Some trading platforms allow you to trade CFDs. (Contract for Difference). This means you’re basically betting on the price of Bitcoin in the future instead of actually owning it (you can read more about CFDs here).
While CFDs are very appealing due to their ease of use, they don’t sell you actual bitcoins. The process is the equivalent of betting on the fact gold will rise in price instead of actually buying gold. Bottom line? You won’t be able to withdraw bitcoins you bought into your wallet. The only thing you’re doing is buying (or selling) a contract regarding Bitcoin’s price for US dollars, euros, or some other form of government currency.
CFDs also allow you to leverage your bets by borrowing money from them (also known as margin trading). While this can give you a great upside, it also hold a lot of risk of losing your money very quickly.
P2P (Peer-to-Peer) platforms connect buyers and sellers directly so they can negotiate on a price. While these sites usually allow for a wider array of options (payment methods, supported countries, etc.), they also hold a large amount of risk because you’re buying from an anonymous individual. Examples of P2P platforms: LocalBitcoins, Paxful.
3. What is the Best Bitcoin Exchange?
Coinmama is one of the oldest Bitcoin brokers around. The company allows you to buy and sell Bitcoins and other cryptocurrencies through the use of a credit card or SEPA transfer. Their services are available worldwide with the exception of a few countries. You can read my full Coinmama review here.
CEX.IO was established in 2013. CEX.IO supplies users with both a borkerage service and a trading platform for several cryptocurrencies. The company also accepts all major credit cards for purchases through its brokerage service. You can read my full CEX.io review here.
Coinbase is probably the most popular company today for buying bitcoins in the US. Coinbase offers a brokerage service as well as a trading platform (known as Coinbase Pro). Their fees are considered to be among the lowest around but their services are limited to 33 countries worldwide. You can read my full Coinbase review here.
BitPanda is an Austrian start-up company that was founded in October 2014. The company allows you to buy Bitcoin or Ethereum with a credit card as well as with wire transfers, Neteller, Skrill, SEPA, and more. The company supplies its services to European countries only at a relatively low fee. You can read my Bitpanda review here.
eToro is a pioneering trading company that puts an emphasis on cryptocurrency. It supplies users with an easy to use trading platform for investing in cryptocurrencies. The company does a great job allowing people to invest easily in Bitcoin and a variety of other leading cryptocurrencies, with a variety of payment methods. eToro is recommended for speculators only, as you can’t really access your assets but only trade them for fiat currencies. You can read my full eToro review here.
Binance is a Bitcoin and cryptocurrency exchange that offers a trading platform with one of the most competitive rates around. If you’re looking to trade crypto to crypto only this is probably the easiest and cheapest way to go. The exchange accepts users from around the world and allows purchasing of coins with a credit card as well (a sort of brokerage service). You can read my full Binance review here.
Luno is a cryptocurrency exchange aimed mainly at emerging markets. Luno offers Bitcoin services to countries such as Malaysia, Nigeria and Indonesia which are usually not allowed on most Bitcoin exchanges. The site supports only Bitcoin and Ethereum at the moment. You can read my full Luno review here.
Bitstamp is the oldest Bitcoin exchange out there. Founded on 2011, Bitstamp has managed to survive most of the Bitcoin ecosystem’s turmoil without being hacked or shut down, and that’s definitely saying something. If it wasn’t for its nonintuitive user interface and lack of convenient payment methods, Bitstamp may have been the perfect exchange. You can read my full Bitstamp review here.
Coinbase Pro is the companion trading platform for Coinbase’s brokerage service. Coinbase’s users can use the same account details to log in directly to Coinbase Pro. Funds are transferred across both platforms. The exchange supports the trading of BTC, ETH, LTC, BCH and ZRX. Coinbase Pro is also limited to 33 countries worldwide.You can read my full Coinbase review here.
BitMEX allows traders to buy and sell contracts for cryptocurrencies (not the actual coins themselves) combined with margin trading (aka leverage). While it supplies contracts for different cryptocurrencies, it works with Bitcoin only (deposits, withdrawals). The platform is mostly suited for experienced traders. You can read my full Bitmex review here.
LocalBitcoins brings buyers and sellers together in a marketplace. It’s unique in that you can transact in almost any method imaginable, including Paypal, wire transfer, Western Union, Webmoney, and cash. There’s a 1% sell fee, and funds are transacted directly to and from a Local Bitcoins wallet. You can read my full LocalBitcoins review here.
Paxful is a P2P marketplace that brings users the ability to buy Bitcoins with almost any conceivable payment method. The user experience is extremely intuitive and while everything seems pretty neat there are still some things you’ll need to look out for like how to avoid scams and get a decent exchange rate. You can read my full Paxful review here.
Next, you’ll need to enquire on the different terms on each exchange. Here are the most important ones:
Coins supported: Does the exchange support the type of coin you’re looking to buy and sell. What currency pairs does it offer for that coins (i.e. what coins can you trade it for). For example, an exchange offering a BTC/USD currency pair supports the buying and selling of Bitcoins for US Dollars.
Countries supported: Make sure the service is available in your country. Not all exchanges accept customers from all around the world.
Accepted payment methods: Some exchanges accept a wide variety of payment methods, while others accept only wire transfers. Payment methods that allow a buyer to request his or her money back, such as credit cards or Paypal, will usually involve higher fees. This is done to insure the seller in case you’ll cancel the payment after you get your coins. As you might expect, payment methods that can’t be reversed, such as wire transfers, are usually cheaper.
Fees: There are three kinds of fees. Deposit fees, transaction fees, and withdrawal fees. Each fee is usually different and can affect the total amount of money you’ll receive in the end. Make sure you’re aware of all of them.
Exchange rate: Some exchanges have low fees, but their exchange rates are higher relative to the competition. This means that the fees are sort of “hiding” in the exchange rate. This is more typical with brokers.
Buying limits: Your buying limit will depend on your payment method and your identity verification level. If you’re looking to buy a large amount of bitcoins, some exchanges might not be relevant due to their low limits.
Exchange reputation: Is the exchange well known in the community? How well is its support in the event you get lost in the process? Have there been a large number of complaints against the exchange? Has it been hacked in the past Keep in mind that no exchange is free of negative reviews, but it’s important to consider the volume and the content of those reviews.
Exchanges today have a Know Your Customer process, also known as KYC, that you’ll have to go through before buying bitcoins.
This means you’ll need to supply the exchange with some additional information, such as your ID, a proof of residence, and in some cases even a proof of income. As Bitcoin becomes more and more mainstream, exchanges are subject to strict regulations by the government, and in many cases, they’re unwillingly forced to request this information from you.
This is not something personal and will probably be required by most legit exchanges. In fact, if an exchange doesn’t request this information I’d be suspicious. If you’re keen about maintaining your privacy you can read our guide about how to buy Bitcoin anonymously.
You now know the most important aspects to look for when choosing your Bitcoin exchange. In the end, the main thing that matters is that the company (or seller) is reliable and that you’re happy with the price you’re paying. Sometimes it’s worth it to spend a bit more money in order to finish the process hassle-free.
Personally, here are my top picks for Bitcoin exchanges by categories:
- eToro (Highly volatile unregulated investment product. There is no EU investor protection. Your capital is at risk.)
- Coinmama (Broker)
- CEX.io (Broker, Trading platform)
- Coinbase / Coinbase Pro (Broker / Trading platform)
- Bitstamp (Trading platform)
If you’ve have any good or bad experience with the exchanges listed above, or any other exchange I’d love to hear about it in the comment section below.
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