What is a cryptocurrency exchange?
It is a trading platform where digital currency is traded. These platforms allow trade in a variety of cryptocurrencies. They provide users with the ability to buy and sell digital currency, exchange it, convert it into fiat currency, make investments, and do other market transactions.
Trading is most often manual, but most exchanges today support automated trading with the help of trading robots or trading signals. For example, tradingview automated trading means the use of software that will open and close deals for the trader.
There are two types of crypto exchanges - centralized and decentralized.
Centralized cryptocurrency exchanges or CEXs are organized similarly to traditional stock exchanges. They are managed by legal entities that are responsible for the platform's activity, the safety of users' funds and compliance with laws. Therefore, the administrations of centralized exchanges have access to customer funds. They can block any individual user, a specific transaction, or an entire line of business, such as withdrawals, if necessary. In addition, each new user is required to undergo the procedure of identity verification.
Blockchain networks underpin decentralized financial systems known as decentralized exchanges or DEX. They are not in charge in any way. Smart contracts that operate automatically or developer and user communities that operate partially automatically govern them. On a decentralized exchange, trading doesn't require registration. As a result, the exchange does not acquire or keep any user data. All you need to do to begin trading on the decentralized exchange is to set up and link a bitcoin wallet. Users alone are accountable for the security of their funds because the exchange does not keep them.
So if you want to know "How to buy cheap cryptocurrency without intermediaries", decentralized exchanges are the answer.
Decentralized exchanges are hardly likely to become a full-fledged analogue of centralized ones due to the peculiarities of legislative regulation in different countries. But this does not take away the perspective of their development, because they are focused on other tasks than traditional exchanges.
How to choose the best exchange for crypto trading?
When choosing an exchange for cryptocurrency trading, you should consider the following factors:
- The size of the exchange - its reliability directly depends on it: the bigger the exchange in terms of trading volume, the more users trade on it, and the more stable it is.
- Assets traded - find out on the exchange website if it offers the opportunity to trade the coins you are interested in. The more coins available for trading, the better.
- A number of trading pairs - this is not the most important parameter, but it may be important for those who want to trade unpopular altcoins.
- Support - if you are having any problems, contacting support will be the only way to solve the problem
- Commissions - when you make a trade, you are paying for the services of an exchange. Though on small volumes the commission can seem insignificant - when you reach big amounts, the commission will take away a considerable part of your trading balance.
Additionally, you should pay attention to promo offers and bonus programs, the possibility of changing to other language versions of the site, and the availability of news from the crypto exchange itself. This additional information will help to assess the level of the exchange you are going to trade on.
Another thing to consider when choosing is whether the exchange supports automated cryptocurrency trading. For example, if you want to use a bitcoin robot, you need an exchange that allows you to do that.
The best cryptocurrency exchanges in 2024
What exchange has the most altcoins? What are the best-decentralized crypto exchanges? How to trade Bitcoin without fees? Where can I compare bitcoin exchange fees comparison? To answer these questions, we have gathered for you the most famous exchanges that users choose to trade in 2024. The list includes both crypto exchanges in USA and exchanges from other countries. Among them, there are cryptocurrency giants that have been around for a long time, as well as some that are gaining popularity.
Binance
The absolute leader among cryptocurrency centralized exchanges. It is not only the most popular but also the most convenient platform for trading digital assets. The number of cryptocurrency pairs, a wide range of trading instruments, as well as the trust of millions of users, play in its favour, which is especially relevant in the crypto market. In fact, everyone associated with cryptocurrency knows about Binance or has used this exchange at least a little bit.
Founded in 2017, today the site is a self-sufficient ecosystem, with a portfolio of instruments suitable for both novice players and large traders.
Despite the fact that Binance is positioned as a platform for cryptocurrency trading, its functionality is not limited to that. In addition to it, the platform offers:
- Cryptocurrency loans
- Margin trading
- Cryptocurrency Staking
- P2P transactions
- Liquidity swap
- Leveraged trading
- Fiat to crypto exchange
In addition to a wide range of financial instruments, Binance also offers users:
- Interesting cryptocurrency storage solutions - their official Trust Wallet.
- Binance Academy, where users can study a wide selection of materials about blockchain technology, cryptocurrency trading and much more. So, if you are looking for an answer to the question "How do you trade cryptocurrency?" refer to the appropriate section of Binance.
An important advantage of the site is the low commission rate, which is achieved due to the extremely high daily trading volumes. The base trading rate on Binance is 0.1%, which is one of the lowest on the market. At the same time, the rate can be reduced if you have a certain amount of BNB - Binance's own cryptocurrency. In other words, you can't buying crypto without fees, but you can easily reduce these numbers to the minimum.
Binance also supports the popular strategy of copy trading, which allows copy deals of other traders, thereby giving newcomers the opportunity to participate in the trades.
More than 400 cryptocurrencies are available on Binance, which is one of the best indicators on the market, so it can be considered the best crypto exchange for altcoins. The most popular currencies on Binance are:
- Tether USD (USDT).
- Binance USD (BUSD)
- Bitcoin (BTC)
- USD Coin (USDC)
But despite the numerous, obvious benefits, it's also critical to keep in mind the drawbacks. For instance, on Binance, users must go through a verification process in order to access the primary trading tools, despite the fact that many traders actively work to maintain their anonymity. During times of busy cryptocurrency trading, such as during the rise of Bitcoin or Ethereum, errors can occur frequently on Binance and might result in the loss of money.
In conclusion, despite some of its flaws, Binance is deservedly regarded as one of the greatest platforms for trading cryptocurrencies. The numbers speak for themselves: Binance dominates its rivals both in terms of active user count and trading volume on the platform. In addition to dominating financial indicators, Binance is also the most well-known platform for trading cryptocurrencies.
Kraken
American centralized exchange Kraken appeared on the cryptocurrency market in 2011. The exchange is headquartered in San Francisco, California.
The founder and CEO is Jesse Powell, who recognized the importance of Bitcoin and Blockchain from the birth of the cryptocurrency ecosystem and saw great potential and opportunity for financial independence in it. He saw the point in developing what Satoshi Nakamoto invented in 2009 and creating new and effective solutions that launched the new digital economy.
In its first years of work, the exchange was in the shadow of competitors, but from the middle of 2014, its popularity began to grow. This is largely due to the bankruptcy of the exchange MtGox, which at the time had an impact on the balance of power in the market. Many traders and investors who previously worked with MtGox switched to Kraken, which offered favourable trading conditions.
Today, Kraken is one of several major companies that has an excellent reputation and serves more than 7 million users worldwide. The platform allows users to buy, trade, and stake cryptocurrencies. In addition to trading at market prices, Kraken offers users margin accounts and futures trading.
Since its founding, the crypto-exchange has been successfully accredited in the United States. Today, trading with Kraken is available in more than 170 countries and the platform supports more than 50 digital currencies. Kraken is also a major currency exchanger, allowing you to buy and sell USD, EUR, CHF, AUD. So if you're looking for an answer to the question, "How to exchange cryptocurrency for USD?", Kraken can help with that.
Kraken is known for its helpful support, available 24/7 in any official resource, as well as in the chat room on the website. For newcomers, the platform offers plenty of tutorials on both the platform itself and cryptocurrencies in general.
Kraken also offers a high level of security for customers' wallets. It uses two-factor authentication, PGP encryption, and a number of other tools to prevent actions aimed at changing accounts.
Kraken's trading commissions are directly related to the volume of trades: the more you trade, the lower the commission on subsequent buy and sell trades will be. However, the amount of commission is slightly higher than on the exchanges we reviewed above - from 0.2%.
The disadvantages of the exchange are quite significant:
- Despite the fact that many cryptocurrency exchanges are also moving to a mobile format, Kraken is in no hurry to introduce a quality application. Customers who have downloaded the application to their device note its unstable work.
- Insufficient protection against cyber attacks. So, in 2018, the company was forced to temporarily cease operations, as the site could not cope with a large number of users and threats from the outside.
- Kraken is not the best start for newcomers. The company offers many trading tools but does not accompany them with detailed instructions. Kraken is much more suitable for experienced traders.
Despite its shortcomings, Kraken remains one of the best US-regulated crypto exchanges. The platform is focused on the security of user assets. Kraken offers full functionality for both active trading at any level as well as passive income. Overall, it is a good tool to conduct cryptocurrency trading activities. That's why Kraken is one of the platforms that users choose in 2024.
KuCoin
KuCoin is a cryptocurrency exchange with headquarters in Hong Kong that enables you to carry out a variety of financial operations, trade 1238 pairings, and convert certain cryptocurrencies into others. All of this is included within a fully functional platform whose services are offered to users anywhere. According to many traders, it is considered the best platform for crypto day trading.
KuCoin is a relatively young representative of the cryptocurrency market: the exchange started functioning in 2017. The model for the creation of a new trading platform was the exchange of the first importance - Binance, which the creators of KuCoin look up to.
KuCoin has some similarities with its more famous "colleague", and is trying to repeat its success story. Starting with a small exchange service called Kubi, KuCoin has gradually transformed into a full-fledged cryptocurrency exchange, which is now operating on a global scale.
The KuCoin exchange features spot and futures markets. To date, KuCoin is among the top 10 exchanges in terms of trading volume on these markets. More than fifty fiat currencies are supported on KuCoin. Funding of the trading account is possible through credit card, as well as through P2P-platform exchange. Withdrawal is possible to a cryptocurrency wallet or through P2P, so the question "How to get your cryptocurrency on an exchange?" will not cause you difficulties.
The official KuCoin website is available in 19 languages. The platform has a user-friendly interface that is not difficult to understand, so KuCoin is considered the best crypto exchange for beginners.
Many users go to the platform just to buy cryptocurrency, and then resell it at a better price. However, this is not the only feature of the service, it offers a number of additional features:
- Mining support. The site is engaged in the development of cryptocurrency mining, so it offers customers to help them do this. You need to synchronize your equipment with the service. The benefit for the client is that the mined coins are immediately credited to the wallet KuCoin, where they can be easily sold and get fiat currency for it.
- Cryptocurrency Lending. This is essentially the provision of crypto-loans by one user to another. In this case, the lender receives a percentage from the borrower for the use of their funds, while the exchange charges them a certain commission.
- Sweepstakes. The crypto-exchange conducts its own lottery draws. To participate in them you need to purchase a virtual ticket, which can be sold for USDT or cryptocurrency. The prize fund of the draw can exceed $10,000.
KuCoin offers a fixed trading commission of 0.10%. If we compare cryptocurrency exchange fees, it becomes clear that this is the average among other exchanges. Trading commissions are reduced depending on the volume of trade and ownership of token exchange KuCoin over the past 30 days.
The creators of the KuCoin cryptocurrency exchange pay special attention to the security of user funds. They do not just make strong statements but prove their words in practice. The platform is constantly being upgraded to provide customers with the highest possible level of protection of digital assets. For example, the KuCoin team systematically cleans its listing and removes potentially malicious coins. Also, the platform regularly implements effective features for security checks.
The disadvantages of the exchange include the absence of margin trading: traders can trade solely on their own funds.
KuCoin centralized exchange is suitable for intraday trading, as well as for medium-term trading. There is sufficient liquidity on the exchange, and perpetual futures are one of the main tools of active traders. In general, KuCoin is suitable for both beginners and professional traders, so it is quite popular among users of the crypto community.
UniSwap
UniSwap is the only decentralized exchange on our list. At the time of this article's creation, it is #1 in the DEX ranking on Coinmarketcap. So if you still don't know where to buy decentralized crypto, check out UniSwap.
The Uniswap platform was developed in November 2018 by Hayden Adams. He started working on the idea after he was fired from Ethereum. He developed the very first draft of Uniswap, which included smart contracts functionality and a proof-of-concept algorithm. The idea proved so interesting that he received several grants, including $100,000 from Ethereum.
At first, the project's feature set was minimal. However, after the official launch of the project, Uniswap very quickly attracted liquidity providers and started working with large volumes. In addition to this, the project also began to expand and make updates. In May 2020, the team launched Uniswap V2, the second version of the protocol. After that, the team announced the start of development of version 3, and it managed to raise $11 million of investment for this purpose in August 2020.
Trading on the Uniswap exchange is different from trading on centralized exchanges for a number of reasons.
- No intermediaries. Trading is between traders' wallets with no third parties involved. Trading on DEX exchanges is based on smart contracts. A smart contract is an algorithm that monitors the fulfillment of certain conditions of the deal. When these conditions are met, the transaction is completed automatically.
- Decentralized storage of funds. Centralized exchanges create separate wallets for each coin. By using CEX exchanges for trading, you agree that you do not manage your assets one hundred percent. For example, in June 2022, after Bitcoin's collapse and the subsequent fall in the value of altcoins, Binance limited the ability of users to withdraw BTC. On Uniswap this will not happen, you will keep your funds in the wallet, tied to one of the exchangers and dispose of these funds at your discretion.
- No registration. On DEX you do not have to undergo any registration or verification. All you need to do to start exchanging your coins - is to link your wallet to the exchanger.
- Security. Centralized exchanges can be hacked. Even Binance's security system has been found to have holes. But gaining access to your funds through a decentralized exchange requires hacking your wallet, and that's only possible if you share data from it with third parties. The same goes for personal data: since you do not provide your credentials to the exchange, it is impossible to steal them.
For these reasons, a large number of users choose decentralized exchangers instead of centralized ones. And UniSwap is the undisputed leader among them.
It would seem that decentralized exchangers are a solid advantage. But UniSwap has minuses:
- Limitation of trading instruments: there is no margin trading and choice of order mode. There is only direct trade.
- No support for fiat currencies. Only cryptocurrency is traded.
- No technical support.
It is the presence of these disadvantages that makes a huge part of users trade through centralized exchanges.
We looked at the most popular cryptocurrency exchanges that cryptocurrency traders use most often in 2024. Each of them has both strengths and weaknesses. So before choosing the best crypto exchange for day trading or the best altcoin trading platform, read the article carefully again to choose the one that will fully meet your requirements. If you are just starting your way in the world of cryptocurrency, start trading with a demo account - this way you will get to know some of the subtleties of trading and you won't lose any money.