What exactly is a Bitcoin Exchange?
A bitcoin exchange is a website which lets you purchase or sell this and other cryptocurrencies. Many exchanges also allow trading in other cryptocurrencies such as Ethereum and Litecoin. As with any other financial investment, or trading decision, buying bitcoin requires an understanding of crypto trading strategies.
- You also need to assess the site’s reputation.
- An exchange that attracts global investors is another sign it’s trustworthy.
- Another important consideration is the location of the exchange.
- Financial regulations differ across countries, so being aware of loopholes is critical.
The first step is setting up a bitcoin wallet. You can store this wallet on your computer on a hard drive. There are many places to register for a bitcoin wallet. Next, you have to purchase the bitcoin. You can either try a formal exchange or a P2P route. Exchanges are more formal operations geared towards purchases, generally through bank transfers, debit and credit cards. A wide number of exchanges serve US traders. Let’s dive deeper and learn more about where to buy bitcoin in US. You can also research the crypto broker, comparison of sites and pros as well as cons of every major exchange here.
Coinbase Versus Coinmama: Clash of the Titans
Coinbase is one of the largest bitcoin exchanges. Here are some facts:
- Bitcoins may be purchased by debit card, credit card, bank transfer and SEPA transfer as well.
- This is a US-based exchange founded in the year 2012.
- It is the largest of cryptocurrency exchanges trading Ethereum and Litecoin, apart from bitcoin.
- Coinbase claimed GBP 15 billion in currency exchange in 2018.
Choose from a mobile wallet, insurance protection for currency on servers and offline storage. Coinbase levies a 1% flat fee for every purchase.
Bitcoin withdrawals and deposits are carried out for free. A streamlined user interface and fast trades make this a popular choice. Newcomers can trade bitcoins easily, given the high liquidity and purchasing limits. Instant buy options are also available. On the downside, purchases with bank transfer can take over 5 days to complete. Coinbase also tracks how and where bitcoins are spent.
Another seasoned bitcoin broker, Coinmama offers simple payment methods.
- Make bitcoin purchases through credit cards or even cash deposits via Western Union or Money Gram.
- Through its credit processor, Simplex, the exchange permits you to buy up to USD 5000 in a single purchase.
- Coinmama has a high exchange rate and this can be a letdown.
Charging a 6 percent fee on each purchase, Coinmama allows anonymous purchases of less than USD 150 worth of bitcoins. This exchange was formed in 2013.
Top 3 Crypto Broker Comparison
GDAX & CEX.io: Most Trusted Bitcoin Exchanges
GDAX owes its origin to Coinbase. A creation of the largest bitcoin exchange in the world, it offers many advantages for those users registered with Coinbase. Working with Coinbase, GDAX allows this exchange’s account holders to log into it directly and trade. GDAX supports not just bitcoin but Ethereum and Litecoin as well. So, if you want to trade in other altcoins besides bitcoin, this could be an option. Users may fund accounts via bank transfers, bank wire or SEPA. While it is possible to buy bitcoins for 0% fees and some of the lowest fees are available for EU and UK buyers, their user interface is not easy to navigate.
CEX.io is another reputed bitcoin exchange. It is also registered as a financial institution. CEX is an exchange that works in the US, UK, EU and select South American cities. CEX permits bitcoin purchases with ACH bank transfers, SEPA transfers, cash or AstroPay and even credit cards. While the advantage is that it has a low 0.2% trading fee, and it is a trusted exchange for many countries, there are drawbacks too. Extensive verification process, incurring long delays and the lack of liquidity of the GBP market are serious shortcomings. If you’re wondering where to buy bitcoin in US, CEX still remains a good option for those on a budget.
Luno Versus Bitcoin.de: Choosing Between Currency Trading Platforms or P2P Bitcoin Exchange
Operating since 2013, Luno is a bitcoin exchange in Singapore. It also facilitates trading through SEPA transfers. Users can purchase and sell bitcoin using either mobile or wallet features. But a flaw this exchange suffers from is its fluctuating fees. With a small market cap, Luno is yet to gain the kind of market share Coinbase as well as CEX have. Luno also offers free deposits and low withdrawal fees. But users in the US don't have access to it despite it being one of the oldest Bitcoin exchanges.
Bitcoin.de, on the other hand, is a leading EU P2P bitcoin exchange. Users can purchase the bitcoin online from others through SEPA transfers. This is like the Craigslist of bitcoin exchanges. Of course, you need to be aware of the reputation of the seller before making a purchase to avoid getting scammed. This is counted among the largest and oldest exchanges in the EU, with claims of high security and frequent audits. But the downside is yet again the same as Luno – US traders don't have access.
LocalBitcoins, BitQuick, and BitStamp: Super Fast Transactions for Bitcoin Investors
While LocalBitcoins operates more like an escrow service, this exchange has been lauded as a fast and reliable means of doing transactions. The transactions are concluded in a fast and efficient way while users are still guaranteed their privacy, which is one of the major selling points for any Bitcoin exchange. Cash deposit seems to be the fastest way to get going, which is nice for those who aren't keen on using other means to transact. Users are also assured of low fees and if the transaction is done in person, there is no need to provide personal information.
BitQuick is another cash exchange known for its incredibly fast processing. Once again this appeals to users who wish to use cash for their transactions. While the 2% transaction fee may be off-putting to some users, the efficacy and speed with which the transactions are processed make it worth their while. Those who are concerned about security will also find this a nice option, as the payments take place with a bank teller. This means fewer hands to handle the cash. Users also like using this platform thanks to the varied pricing that exists on it.
While Bitstamp is quite the platform for those hoping to make use of quick Bitcoin transactions, it is more suitable for traders who know what to expect. The platform is not quite set up for beginner traders and they might find the navigation process a little daunting. Those who are familiar with trading, however, will find the speed and low transaction fess a serious drawcard.
eToro and 24Option.com: EU-Based Exchanges for US Traders
eToro is a bitcoin exchange in the EU, however, has expanded their offices to the US as well. It offers a wide range of payment options that include Swish, SWIFT, SEPA, Faster Payments, iDEAL, and Bankgiro. eToro's main operations are in London and Tel Aviv, but operate in a number of countries. For traders, eToro is the ideal option as it is a world leader in offering cryptocurrency CFDs.
24option.com Is a trader based in Cyprus that offers a number of cryptocurrency trade options to a number of countries across the world. Those in the US are directed to the Belize site which is set up for those trading outside the EU. This option is perfect for traders who wish to learn the ropes of crypto trading as the exchange offers access to a learning center. It also offers great fees and superb customer service, which are both important considerations for traders.
BitStamp, Kraken, BitPanda: A Wealth of Choices
The longest running bitcoin exchanges in the world include Bitstamp and Kraken. Both were founded in 2011. While Bitstamp has low transaction fees and offers bank or SEPA transfer, international bank wire, and credit cards, this bitcoin exchange has its shortcomings. It is not suited for beginners. Additionally, there are high deposit fees on less money. A low 0.25% fee, Bitstamp’s fee levied falls to 0.1% with plenty of trading volume. There’s a good range of withdrawal and deposit options and a wide range of altcoins too, but be warned…this exchange has been hacked before. It also has an 8% fee on small credit card purchases.
Another veteran exchange is Kraken. It is the first bitcoin exchange to be listed on Bloomberg terminals. It is trusted by Japan and Fidor Bank, but its pitfalls are pretty much the same as Bitstamp’s. This Eurocentric bitcoin exchange has a daily average trading volume. It publishes the proof of reserve audits and is highly rated for security. The only glitches are the ID verification and tough user-interface for first-time buyers.
BitPanda is one of the leading Bitcoin exchanges and provides one of the largest ranges of cryptocurrencies. Based in the EU, BitPanda makes use of a number of payment options to facilitate transactions and these are available in a number of different currencies. Mobile apps make this a crypto platform ideal for traders on the go.
Cubits, Bitit, Anycoin, Changelly: Wider Payment Methods
Cubits is a UK based bitcoin exchange which offers a wide range of payment methods and currencies. You can use SEPA, SOFORT, SWIFT, credit cards, Skrill, Dotpay and online bank transfers too. It has a 0.9% trading fee and supports 20 fiat currencies. Its wallet cannot be used for storing bitcoins, though. ID verification kills your privacy. For novice beginners, it can be a deal-breaker.
Bitit has the distinction of being an exchange that permits purchase of bitcoin online with five different payment methods to choose from. It also supports seven base currencies and is open to over 50 countries across the world. For traders, this is a simple and easy-to-use platform that provides quick access to an account.
The cons are the lack of transparency regarding fees and the intensive ID verification, which even requires video chat. Another exchange, Changelly lets you purchase bitcoin with another cryptocurrency. With a sleek interface, a 0.5% fee on transactions, it is not suited for those trading in fiat currencies.
From P2P to Formal Exchanges With Demo Accounts
P2P marketplaces are a dime a dozen. Bitcoin-OTC exchange, for instance, is an over-the-counter marketplace for the peer-to-peer exchange of bitcoin. It essentially involves users placing ads or locating ads to sell or buy bitcoin respectively. For countries without an exchange, this is a great option.
If you’re new to currency trading though, consider eToro. It provides an impressive USD 100,000 worth dummy account so you can practice without risking money. This site also offers copy-trading and boasts over 6 million users. Another popular choice for US investors is Plus500, which allows trading in a lot of altcoins besides bitcoin. It also has a demo account, so you can learn the ropes, without risking real cash.
There are so many options out there for those looking to buy bitcoin safely and securely. The main choice is between P2P and formal exchanges. Each has its own share of benefits and drawbacks. So, make sure you invest wisely by making the right choice.