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What Are Cryptocurrency Exchanges?
Cryptocurrency exchanges are online platforms that allow users to trade various cryptocurrencies for traditional currencies or other digital assets. These exchanges provide a high degree of transparency in transactions and offer users a certain level of anonymity. Cryptocurrency exchanges are often used as practical mediums for international trading, as they can significantly reduce transactional fees.
To be categorized as a cryptocurrency exchange, a platform must facilitate traditional blockchain transactions and accept payments of cryptocurrency in exchange for goods. These exchanges also enable users to deposit and withdraw cryptocurrency funds, making it easy to manage their digital assets. By providing an efficient and secure way for users to buy and sell cryptocurrencies, these exchanges have become an essential part of the rapidly expanding cryptocurrency ecosystem.
Types of Cryptocurrency Exchanges
There are two main types of cryptocurrency exchanges i.e.
- Centralized Cryptocurrency exchanges (CEXs)
- Decentralized Cryptocurrency exchanges (DEXs)
Centralized Cryptocurrency Exchanges (CEXs)
Centralized cryptocurrency exchanges, also known as CEXs, are the most well-established type of crypto trading platforms. They’re operated by a company that provides users with the ability to trade cryptocurrencies for fiat or other digital assets.
One of the biggest advantages of centralized exchanges is that they’re user-friendly and have intuitive user interfaces, making them accessible even for those new to cryptocurrency trading. Additionally, CEXs typically offer a wide range of trading pairs, as well as fiat gateways, making it easy for users to enter and exit the market with traditional currency.
However, the downside of centralized exchanges is that users don’t have complete control over their funds since they don’t hold the private keys to their cryptocurrency wallets. Furthermore, centralized exchanges have a higher risk of being hacked than decentralized alternatives, as seen in several high-profile hacks in the past. Despite these risks, many traders still choose to use CEXs due to their convenience, liquidity, and wide range of features. Some of the most popular centralized exchanges include:
Bybit allows you to leverage trade Bitcoin; by signing up with our link and making your first deposit, you can receive up to a $30,030 bonus! (Bonus may vary based on the deposit amount)
Decentralized Cryptocurrency Exchanges (DEXs)
Decentralized exchanges, or DEXes, offer an alternative to centralized exchanges by eliminating the need for a middleman. Unlike CEX, the trades and transactions are automated using smart contracts and decentralized applications, which makes them more secure since there is no central point of failure. However, most DEXes operate on the Ethereum blockchain, which limits the trading of other cryptocurrencies like Bitcoin.
While DEXs offer greater decentralization and anonymity, they also come with some limitations. Trading volumes are typically lower, and the UI can be harder to use, which makes them more suitable for experienced traders. Additionally, there is no customer support to help you out in case of issues, and they don’t offer a fiat gateway like CEXs do. Some of the most popular DEXs include:
- Pancake Swap
- Kyber Swap
In this article, we will focus more on the Centralized cryptocurrency exchanges and will take a look at some of the main features it offers.
How to Choose the Right Cryptocurrency Exchange?
When choosing a cryptocurrency exchange, there are several factors a user needs to consider. Let’s take a look at a few vital things a trader must consider before opting for a cryptocurrency exchange.
When choosing a cryptocurrency exchange, security should be the top priority. With the increasing value of cryptocurrencies, exchanges have become prime targets for hackers. Major exchanges like Binance and KuCoin have been hacked in the past, resulting in substantial losses for users. However, big exchanges are also known to reimburse users in case of such incidents.
To minimize risk, it’s advisable to spread your cryptocurrency purchases across multiple exchanges or store your coins in a secure cold wallet. Cold wallets are offline storage options that are less susceptible to hacks compared to online exchanges. By prioritizing security, you can enjoy the benefits of cryptocurrency trading without putting your investments at high risk.
When it comes to choosing a cryptocurrency exchange, availability is another important factor to consider. You should look for an exchange that offers the cryptocurrencies you are interested in trading. Some exchanges may only offer a limited selection of coins, while others may have a vast array of options to choose from.
Cryptocurrency exchanges like Binance & Bybit are always safe options as they offer a vast number of cryptocurrencies and trading pairs. However, you must ensure that the cryptocurrency you are interested in is available on the site beforehand.
One of the key things to consider when choosing a cryptocurrency exchange is the trading volume. It’s important to ensure that the trading volume of your preferred coins is sufficient for liquidity, so you can easily buy and sell without the risk of slippage.
Low trading volume markets could cost you more, resulting in slippage where you could end up buying at a higher price or selling at a lower price than desired. For advanced traders, it’s essential to ensure that your preferred exchange offers the trading types and margin options you need, such as limit orders, to prevent slippage by setting a fixed price. Keep in mind that different exchanges may have varying offerings over time, especially when it comes to margin trading.
When choosing a cryptocurrency exchange, it is important to keep trading and withdrawal fees in mind. These fees can be charged as a flat percentage of the amount of crypto you buy or sell, or they may vary depending on whether your order adds or removes liquidity from the exchange. While it’s important to look for the lowest fees possible, you should also consider any discounts available for frequent traders or those who hold the exchange’s native cryptocurrency.
It’s worth noting that some crypto investment apps claim to have zero fees, but they actually charge a spread, which is the difference between the buying and selling rates of crypto. Spreads can end up being more expensive, so make sure to check the fine print before using such apps.
In addition to trading fees, many exchanges also charge fees for withdrawing coins from their platform. These fees can vary depending on the cryptocurrency being withdrawn, and they can add up if you frequently move your crypto to a secure third-party wallet or another exchange. If this is important to you, consider choosing an exchange that offers a certain number of fee-free or discounted withdrawals. By keeping trading and withdrawal fees in mind, you can choose an exchange that suits your budget and trading needs.
Top 10 Best Cryptocurrency Exchanges
1. Bybit Crypto Exchange
Bybit exchange was launched in 2018 and is growing extremely fast within the crypto community right now. The reason for this is probably their amazing 24/7 customer service and user-friendly website. Furthermore, there are no system overloads on Bybit, which is a huge advantage over its competitors.
Also, the leadership behind Bybit is pushing the boundaries of what a crypto trading exchange can do. For example, on the Bybit exchange, you can deposit not only Bitcoin but also altcoins and trade with them. Now, this is unique for the Bybit exchange right now. Interestingly, the founders of Bybit have an impressive background in companies like Tencent & Morgan Stanley.
The exchange offers both spot and margin trading, and you can use max leverage of up to 100x. Make sure to read our complete Bybit tutorial before trading Bitcoin.
Bybit also requires you to complete the KYC process. This will involve you submitting identity proof to be able to trade more than 2 BTC per day.
2. PrimeXBT Crypto Exchange
PrimeXBT is an innovative Bitcoin-based exchange that offers users high leverage, a low fee structure, and a user-friendly web-based trading platform. One of its standout features is its copy trading function, which allows users to replicate the trades of more experienced users automatically. This can be a great option for those new to trading or who have limited time to devote to analyzing the market. With a focus on technological advancement and transparency, PrimeXBT is a great choice for anyone looking for a safe and reliable exchange. You can also read our detailed PrimeXBT review by clicking on the highlighted text.
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3. Phemex Crypto Exchange
Phemex is a top-tier Bitcoin derivatives exchange that offers institutional-level trading capabilities to crypto traders worldwide. The platform boasts cutting-edge technology, making it one of the most advanced exchanges in the industry. Since its launch, Phemex has garnered immense support and growth from traders globally, with thousands of users joining the platform on day one. Additionally, Phemex offers a range of pricing options, fees, and signup bonuses for new users. To learn more about this broker, check out our detailed Phemex Review.
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4. Binance Crypto Exchange
Binance was founded back in 2017 and has been an industry leader ever since. However, it was not until 2019 that they started offering margin trading for Bitcoin and a few selected altcoins. Over time it has grown to also become a force to reckon with in the Bitcoin leverage industry, offering users the largest amount of tradable crypto pairs, the highest amount of liquidity, and the lowest fee in the industry.
If you’re looking for an exchange with a lot of recognition, a high reputation, and a solid user base, then Binance might be a good choice for you to place your trades with. Read our complete Binance Review to get more information about this broker.
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5. KuCoin Crypto Exchange
KuCoin is a top-of-the-line cryptocurrency trading platform that stands out from its peers in the industry due to its innovations, broad range of trading products, low fees, and fast transaction processing. Not only that, but KuCoin has shown an unwavering commitment to security, prioritizing the needs of its users above its own. With its user-friendly interface, beginners can easily navigate the platform, and KuCoin also offers direct purchasing of cryptocurrencies using credit or debit cards. If you’re looking for a reliable and trustworthy platform to trade cryptocurrencies, KuCoin is an excellent choice. You can also read our detailed Kucoin review to learn more about this cryptocurrency exchange.
6. Deribit Crypto Exchange
One of the most popular exchanges is called Deribit. This is one of the biggest crypto exchanges that offer Bitcoin options trading. The platform is above average and offers one of the lowest pricing fees in the crypto options industry.
That said, if you are a beginner, you should probably prefer Bybit or Binance. Deribits’ interface is more geared towards professionals and experienced traders. Read our Deribit review for more info.
7. Coinflex Crypto Exchange
Coinflex is a relatively new cryptocurrency exchange platform that has risen to dominance and gained popularity among crypto traders and enthusiasts. This is because of its high leverage, low pricing fees, numerous trade offers, and multiple account features. This makes trading with Coinflex an easy and straightforward process for both beginners, average traders, and experts.
This is a great alternative to Bybit and Phemex. Read our Coinflex review for more info.
8. Margex Crypto Exchange
Margex is a new crypto trading platform as compared to Bybit and other platforms. It was founded in 2020 and has gained a lot of popularity in a short span of time. It has a simple and impressive user interface, which makes it highly suitable for beginners.
It does not require KYC (know your customer) registration and accepts both crypto and fiat deposits. It offers 100x leverage to the users for trading Bitcoin as well as other digital assets.
It is a safe trading platform and charges a competitive fee, which is lower than other exchanges in the market. For trading Bitcoin, Margex charges a 0.060% taker fee and a 0.019% maker fee.
Read our Margex Exchange review to learn more.
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9. BitMEX Crypto Exchange
BitMEX was founded back in 2014 and has been an industry leader for a very long time. However, this seems to be changing right now as more competitors enter the space. Exchanges like Bybit & Binance have already had many BitMEX traders move over to them.
The main reason why people are leaving the BitMEX exchange is because of the system overload. To explain further, these system overloads happen in highly volatile moments. In these moments, many traders are trying to put in their orders at the same time.
Sadly, the BitMEX platform has historically had a lot of problems dealing with the high volume of traders they have. We hope that this will change in the future, but for now, we recommend the Bybit exchange for Bitcoin margin trading. However, if you want to trade on BitMEX, you should read our complete BitMEX tutorial before placing any trades.
10. Coinbase Pro
You simply cannot create a list of top bitcoin exchanges without adding Coinbase to it. Even though Coinbase is not exactly a low-fee bitcoin trading platform, you can still reduce the trading fee by opting for the Pro version.
With Coinbase Pro, you can enjoy a much better fee schedule and can trade Bitcoin and your favorite cryptocurrencies with high liquidity. Coinbase is only second to Binance in terms of trading volume, which makes it an excellent platform.
The trading fee for Coinbase Pro is 0.50% for both the market makers and takers. The fee can be reduced even further if you are trading in high volume.
Coinbase also does not support margin trading, and it’s one of the reasons why it is not higher on our list. You can read our detailed review of Coinbase by clicking on the highlighted text.
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How to Choose the Best Cryptocurrency Exchange for Yourself?
When it comes to picking the right leverage Bitcoin trading platforms for your needs, you must remember that there is no one size fits all for exchanges. Each user has unique needs when trading Bitcoin, and each exchange has unique strengths and weaknesses that can either favor your trading strategy or break it.
Understanding what your needs are is the first step to finding the best crypto trading platforms that suit you.
Best Crypto Exchanges for Beginners
As a novice Bitcoin trader, your first step in finding the Best cryptocurrency trading platform for you is to look for crypto trading exchanges that support and prioritize providing helpful content, videos, and customer assistance to new traders.
Bybit tops the list when it comes to the trading platforms’ ease of use and free training content for both new and advanced traders.
You can also opt for PrimeXBT as a beginner as its copy trading features helps you copy traders of professionals.
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Best for Cryptocurrency Scalpers
Bybit and Phemex are the best Bitcoin exchange choices for scalpers and high-frequency traders. Their top-tier liquidity providers combined with a top-of-the-line technologically advanced trading platform make entering and exiting trades smooth.
Best Pricing for Small Accounts
For small accounts, your number one goal is to reduce the cost of trading. Binance is the best broker for you. The combination of decent leverage of 20x for trading Bitcoin and the lowest trading fees in the industry makes it easy to partake in the crypto market even with little funds.
With Binance, you can easily find the support you need to compound your trading account quickly. Read the complete Binance review.
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Best Crypto Exchanges for Trading Bitcoin Options
Deribit is one of the best Bitcoin exchanges that offer support for Bitcoin options trading. That said, if you are a beginner, you should probably go for Bybit. Deribits’ interface is more geared towards professionals, and Options trading is quite complex.
Best for Trading Multiple Cryptocurrency Assets
Binance and KuCoin both have a huge collection of tradable crypto pairs in the industry. On Binance, the total amount for all tradable pairs is more than 1300, while KuCoin supports 700+ digital assets with over 1200 pairs, including smaller cap coins.
Phemex also stands out by offering users the ability to open trades in Gold on its platform, making it the only Bitcoin trading platform that does this. Your trades in the Gold/USD derivative can be leveraged up to 100x.
Best for Managing Sub-Accounts
Phemex is the best bitcoin trade platform for trading sub-accounts. With these sub-accounts, you can better manage your trading accounts, test multiple strategies, segregate your trades and trading funds, and generally perform better in the market.
These sub-accounts also give traders the ability to tweak the trading environment of individual accounts. This way, traders can change the permissions, leverage, balances, and margin levels of the individual accounts to better suit the strategy being traded on them.
Best Crypto Exchanges for High Withdrawal Limit
If you are looking for the best Bitcoin exchange Platforms that allow you to withdraw multiple times in a day from your trading account, then the best choice for you is Bybit.
These two have one of the highest withdrawal limits of three times per day at specific times. This makes it possible for its users to carry out multiple transactions on the platform, unlike its competitors, which usually allow only one withdrawal per day at a specific time.
In conclusion, choosing the best cryptocurrency exchange can be an overwhelming experience, with various options available for traders and investors to choose from. Different exchanges offer different features, including fees, supported assets, security, and user interface. It’s essential to do thorough research before selecting an exchange that suits your needs.
Bybit, Binance, and PrimeXBT are our top three picks with different strengths and offerings, catering to traders of different levels and preferences. Bybit is an excellent choice for both sport & derivatives trading, while Binance offers a wide range of cryptocurrencies and trading options. PrimeXBT is known for its high leverage and advanced trading tools, i.e. Copy trading. It is vital for you to assess your needs first and then choose an exchange accordingly.
Frequently Asked Questions
Some top crypto exchanges where you can purchase BTC using your credit card include Bybit, PrimeXBT, Binance & Kucoin.
Some of the top US cryptocurrency exchanges for BTC and altcoins in the United States include: Binance U.S.& Kraken
Bybit, Binance, Coinbase, KuCoin, and PrimeXBT are some of the most popular cryptocurrency exchanges.
Keeping your assets on a cryptocurrency exchange is always risky. However, some of the exchanges that have protected their users over the years include Bybit, Coinbase, Binance & Kraken.
Bybit, Binance & PrimeXBT are the best cryptocurrency exchanges for trading.