Bitstamp Review: Is it Safe Exchange? Fees & Crypto Margin Trading Explained

★★★★★
★★★★★

Rating: 82%

The original global crypto exchange

25% off on trading fee with referrals

Fees:
Buy
0.75%
Withdraw
Network fee
Deposit Methods:
Wire:
Credit:
Paypal:
Crypto:
★★★★★
★★★★★

Rating: 82%

The original global crypto exchange

25% off on trading fee with referrals

Fees:
Buy
0.75%
Withdraw
Network fee
Deposit Methods:
Wire:
Credit:
Paypal
Crypto:
Is It safe?

Exchange Pros

  1. Accepts Wire transfers.
  2. Accepts credit/debit cards.
  3. Offers FIAT trading pairs for EUR and USD.
  4. Advanced trading platform.
  5. Decent liquidity.
  6. Regulated exchange.

Exchange Cons

  1. Limited cryptocurrencies.
  2. Does not support Margin trading.
  3. Lengthy verification period.

Overview

Bitstamp is one of the oldest and most well-known cryptocurrency exchanges in the world. Our Bitstamp review will give you a detailed overview of the features and services this veteran cryptocurrency exchange has to offer. After reading this review, you will be able to decide whether Bitstamp is the right cryptocurrency for you nor not.

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What is Bitstamp?

Bitstamp Review

Bitstamp is a Europe-based cryptocurrency exchange that is offering its services all across the globe. It is one of the oldest cryptocurrency platforms out there and has stood the test of time better than most of its competitors. Bitstamp allows users to buy, sell and trade over 20 different cryptocurrencies from one marketplace and is ideal for users that are new to the crypto space.

The main reason behind Bitstamp’s popularity is that it allows its customers to purchase cryptocurrencies with FIAT and supports multiple payment methods. FIAT currencies supported by Bitstamp include Euro and USD, and almost all the cryptocurrencies available on the platform have a separate pair for each FIAT currency.

The daily trading volume offered at Bitstamp is quite decent but is significantly lower than some of the other top cryptocurrency exchanges like Binance and Kraken.

Bitstamp is considered a highly secure cryptocurrency platform because, throughout the years, it has never lost any customer-owned assets. This is quite remarkable considering that the exchange has been around for almost a decade.

History of Bitstamp

Bitstamp was established in 2011 in Slovenia by two friends Nejc Kodric and Damijan Merlak. Back then, cryptocurrencies were quite new, and there were not many reliable exchanges out there for crypto traders. Mt. Gox was the most popular bitcoin exchange at that time, but it suffered security breaches twice and went bankrupt within a few years.

Nejc and Damjian started working on Bitstamp because they knew while the blockchain network was highly secure, the exchanges that were trading cryptocurrencies were not. If crypto holders were storing their assets on an exchange, they were always at risk. Their aim was to build a secure exchange where people can store and trade their assets worry-free.

Bitstamp Review on history

World’s First Licensed Cryptocurrency Exchange

The exchange received a great response from the cryptocurrency community and started expanding its functions as it grew bigger. The founders decided to move the exchange to Luxembourg because they wanted to regulate the exchange and make it legit. Back then, even the UK did not have any crypto regulations, and Luxembourg seemed like a great place to start.

After having long talks with Luxembourg’s government, Bitstamp moved its offices to Luxembourg and became the world’s first regulated cryptocurrency exchange. Its license is valid in 28 European countries, and this was not only a big win for Bitstamp but for the entire crypto world.

2015 Security Breach

Bitstamp has been around for a long time and has also seen some bad days. In January 2015, Bitstamp suffered its first security breach as 19,000 bitcoins  (worth $5 million) were stolen from the exchange by an anonymous hacker.

However, the assets that were lost were exchange-owned, and no Bitstamp user suffered any major losses due to this breach. The exchange handled the whole incident extremely well and is one of the reasons why Bitstamp is among the most trusted cryptocurrency exchanges in the world.

How Does Bitstamp Work?

Bitstamp is a simple and easy-to-use cryptocurrency exchange that works no differently than any other exchange out there. The platform allows you to buy and sell cryptocurrency through the spot market and acts as an intermediary.

To buy or sell crypto on Bitstamp, you will first have to get registered and go through the KYC (Know Your Customer) process.  Once you have provided the necessary information, you can deposit funds and can start trading crypto right away.

With every trade you make on the spot market, you have to pay a tiny fee to the exchange, which we will discuss in the latter part of this review.

Bitstamp only allows you to go long on your trades which means if you are looking to bet against the price of a cryptocurrency, it is not the right platform for you. If you are looking to short an asset, you can sign up for margin trading on exchanges like ByBit, Phemex, and PrimeXBT.

Is Bitstamp Safe?

Security is the most important factor when it comes to choosing a cryptocurrency exchange. Liquidity, user interface, and trading tools are all important things, but they won’t matter much if the exchange is not secure.

Bitstamp has suffered a major security breach in the past where the exchange lost $5 million in Bitcoin. However, that does not necessarily mean that the exchange is not safe. In fact, Bitstamp is considered one of the most secure cryptocurrency platforms out there and has not been breached in the last seven years.

If you prefer an exchange that has never been hacked in the past, you can consider signing up on ByBit, Kraken, or Swissborg.

Some of the main security measures taken by Bitstamp to keep customer funds safe include:

  • Email confirmations
  • Two-factor authentication for logins
  • Google Authenticator Login
  • Accounts are audited annually by a well-known firm
  • The majority of the assets are held in cold storage

How to Trade on Bitstamp?

To start trading on Bitstamp, you will have to go through the following steps:

Create a New Account

The first thing you need to do is create an account with Bitstamp. Click on the Register button on the homepage and provide the information required to complete the sign-up process. Make sure to choose the personal account option while signing up as corporate accounts are for brokers and large companies.

Make sure to double-check the information, as you will have to verify it later in the process.

Bitstamp Review on account creation

Activate Your Account

Once you have provided the necessary information, you will be sent a confirmation email for account activation. Click on the link in the email to activate your account, and make sure to take note of your unique ID issued by the exchange.

Improve Account Security

Before you move any further, it is important for you to improve the security of your account. It is advised that you set up two-factor authentication before depositing any funds so that you are not putting your investment at risk.

With two-factor authentication, you will have to enter a computer-generated code sent to your mobile phone every time you log in.

Note: You can also turn on email verification to strengthen your account’s security even more.

Identity Verification (KYC)

If you want to buy or sell cryptocurrency with FIAT, then you will have to verify your identity by going through the exchange’s KYC process.

In this Know Your Customer process, the information you are required to share varies from country to country. Normally you will have to upload a scan of your passport or a government-issued ID card. You might also have to provide extra documents like bank statements or electricity bills for address verification.

KYC verification is not mandatory if you are going to deposit or withdraw crypto directly. However, your daily withdrawals will be limited.

Deposit Funds

To deposit funds, all you have to do is click on the “Deposit” drop-down menu and choose your preferred method for depositing funds.

If you are using a debit/credit card, you will receive the amount in your exchange wallet in no time. But if you are opting for a bank transfer, you might have to wait a few days for the transaction to complete.

Trade Crypto

Once you have funds ready, you can simply go to the trading menu and choose to type the cryptocurrency you are looking to purchase along with its FIAT pair. The trading interface for Bitstamp is quite similar to exchanges like Binance, Kraken, and Phemex and is easy to navigate.

Bitstamp Review on trading interface

Bitstamp Trading Fees

When it comes to trading fees, Bitstamp does not stick to the traditional maker and taker fee model and charges a flat fee on the trades. You have to pay a flat fee of 0.25% for trades under $20,000. You can get this fee down to 0.10% if your monthly trading volume exceeds $20 million.

The trading fees charged by Bitstamp are much higher compared to other cryptocurrency exchanges and are one of the reasons why the exchange does not have a huge user base.

You can trade cryptocurrency on Binance, Phemex, or Swissborg if you are looking for options that charge a low trading fee.

Bitstamp fees

Bitstamp Deposit and Withdrawal Fees

The deposit and withdrawal fee for Bitstamp varies depending on the payment method you have chosen and is as follow:

Card Purchases:

Deposit: 5% + bank fee (in some cases)

Withdraw: 5% + bank fee (in some cases)

International Wire Transfers:

Deposit: 0.05%

Withdraw: 0.1%

SEPA Withdrawals Fees:

Deposit: Free

Withdrawal: 3 EUR

Faster Payments UK:

Deposit: Free

Withdrawal: 2.00 GBP

Can You Do Margin Trading on Bitstamp?

Unfortunately, Bitstamp does not support margin trading currently. It is an excellent platform for those who are new to crypto investing, but if you are an experienced trader, there are much better options available for you out there.

You can do margin trading on ByBit, Phemex, and PrimeXBT as they offer high leverage and are seen as reliable margin trading exchanges.

New traders can also join PrimeXBT Covesting as it allows you to copy trades of expert traders and helps you make easy profits overnight.

Bitstamp Pros and Cons

Bitstamp is an excellent trading platform overall, but it also has some limitations. The main Pros and Cons of Bitstamp includes:

Bitstamp Pros

  • Accepts Wire transfers
  • Accepts credit/debit cards
  • Offers FIAT trading pairs for EUR and USD
  • Decent liquidity
  • Regulated exchange
  • Advanced trading platform

Bitstamp Cons

  • Limited cryptocurrencies
  • Does not support Margin trading
  • Lengthy verification period

Conclusion: Is Bitstamp Worth It?

Bitstamp is an excellent cryptocurrency exchange and could be a perfect fit for some new traders and investors. The exchange offers everything a beginner might need, but it is not exactly the best option out there.

Exchanges like Binance, Phemex, and Swissborg offer the same features and much more. They are also cheaper when it comes to trading fees.

However, Bitstamp is one of the first regulated cryptocurrency exchanges and offers trading pairs in both EUR and USD. If you are EU-based and looking for an exchange where you can invest in crypto, then Bitstamp is not a bad option at all.