With Bitcoin (ticker: BTC) grabbing all the attention, and Dogecoin (DOGE) nailing the punchlines, cryptocurrencies are the newest craze to sweep the financial world.
Investors now have more options than ever before to convert their hard-earned cash into decentralized digital money, thanks to the continued growth of the number of cryptocurrencies available on the market. Do you know where to start when it comes to making cryptocurrency trades?
As the internet is rife with tales of hackers defrauding traders of their profits from unsecured cryptocurrency exchanges, selecting a safe crypto trading platform is more important than ever. Whichever cryptocurrency exchange you decide to use should be your first stop.
Your decision will be influenced by a wide range of factors such as the exchange’s level of security, usability, trading fees, and the total number of coins available for trading. Here are five cryptocurrency trading platforms for different types of cryptocurrency investors to help you find the right one for you:
- The Coinance
As one of the world’s most popular crypto exchanges, it should come as no surprise that Coinbase is at the top of this list. Since its launch in 2012, Coinbase has grown in popularity among cryptocurrency investors.
Coinbase is a great place for new traders to get started because of its user-friendly interface, simple onboarding process, and $5 in Bitcoin bonus just for signing up for an account. Hill Wealth Strategies president Daniel R. Hill says Coinbase is the best site for beginners because “you can see all of the coins in one place, (it has a) simple user interface and you can easily buy different crypto.”
Coinbase Pro, a more powerful cryptocurrency trading platform for advanced users, is available for a fee.
Despite Coinbase’s support for hundreds of digital currencies and altcoins, users have a limited number of options to choose from. The fee structure on Coinbase’s site is also confusing, so users should be on the lookout for any additional fees that are tacked on to their trades.
Hill complains that Coinbase is more expensive and offers fewer payment options than other cryptocurrency exchanges.
With only four years under its belt, Binance is a relatively new player in the crypto market, but it has already made a name for itself.
Binance, a cryptocurrency exchange based in Hong Kong, deals in over 500 different cryptocurrencies. With its low trading fees, powerful charting tools, and user-friendly mobile app, Binance is a good choice for cryptocurrency beginners. However, for experienced crypto day traders, it may be a better choice. It’s easy to see how Binance has grown to be one of the world’s largest cryptocurrency exchanges with all of these great features.
Because of the sheer number of cryptocurrencies available, Hill believes Binance isn’t the best choice for newcomers to the cryptocurrency space. For those who are familiar with cryptocurrency terms and investment options, Binance is the better option.
Although it accepts credit and debit cards, Binance does not allow you to exchange U.S. dollars for cryptocurrency. There is a U.S. site for American users, but it has fewer features than the main site. The most recent attack on Binance was in 2019, but the site has an insurance fund to cover any losses in the future.
When you think of cryptocurrency trading, you probably don’t picture Robinhood, and that’s understandable. When it comes to mobile apps that allow users to trade stocks commission-free, Robinhood is known for prohibiting users from selling “meme stocks” like GameStop Corp. (GME) earlier this year. Since then, the company has slowly expanded its crypto offerings on its app, allowing users in a small number of states to trade as few as seven cryptocurrencies, including Dogecoin.
This is a good starting point for those who are new to cryptocurrency because it’s a small enough pool for those who are just getting started. Robinhood’s mobile-first approach has resulted in an incredibly user-friendly app, and the absence of trading fees means that the entry barrier is extremely low. “Robinhood utilizes cold wallets to store your cryptos, meaning that the vast majority of users’ funds are held safely offline,” says Edmund McCormack, founder and CEO of Dchained, with regard to security. If a hack does occur, Lloyd’s will underwrite any cybersecurity breaches, but that’s unlikely.
Users can’t move their coins out of Robinhood and into another wallet, which is something you should be aware of. In fact, Robinhood does not allow users to make payments with their coinage; it is solely a trading platform. As a result, advanced users will be better served by one of its larger, more established competitors. However, it has everything a cryptocurrency newbie needs, making it the best cryptocurrency exchange for novice traders.
Founded in 2014 by the Winklevoss brothers, Gemini has become a household name in the cryptocurrency industry. While Bitcoin and Ethereum (ETH) used to be Gemini’s two biggest assets, the exchange now lets users trade over 40 different cryptocurrencies, including Bitcoin Cash and Gemini dollars, a stablecoin backed by the US dollar. Gemini is built on the foundation of legitimacy, and regulatory compliance was a top priority when it was first launched. Federal Deposit Insurance Corp. insures the site as a fiduciary. As a result, security is of the utmost importance to Gemini.
Because most of the coinage traded on the exchange is kept in cold storage, Gemini has earned a solid reputation for trustworthiness. The company has “an extremely responsive customer service branch,” which response to emails within a few hours, as well, according to McCormack.
When comparing Gemini to Coinbase Pro, McCormack notes that “Gemini’s trading fees are a little higher, but Coinbase’s are lower.” Fees are assessed on a sliding scale based on the frequency with which trades are made, which incentivizes heavy users to make frequent use of the platform while penalizing infrequent buyers. The site is easy to use, but the mobile app isn’t as user-friendly as some of the competition. Additionally, you can’t fund your trading account with debit or credit card payments. That being said, if security and safety are your top priorities, using Gemini to trade is a great option.
Since its inception in 2011, the coinance has established itself as a reliable and secure cryptocurrency exchange.
It’s true that the coinance coin selection isn’t as large as some others, but it more than makes up for it with useful features that even newcomers to crypto trading appreciate. The coinance Pro site, however, is where serious traders will find the most advanced tools. Power users will be drawn to margin trading and crypto futures, while investors who want to stake their coins and forget about them will be drawn to simpler tools like coin staking. According to the coinance spokesperson, the company uses its own proprietary custody solution for security purposes and does not use any third-party services. In fact, according to the company, 95% of all the coinance deposits are kept in cold, off-line storage that is geographically dispersed. Only when you trade or withdraw from the platform are assets moved online.
The maker-taker fee schedule system on the coinance is at best ambiguous, and it frequently leaves users with higher fees than they’d find elsewhere unless they’re actively trading for 30 days in a row. The coinance exchange has been known to go down during times of high volatility, as CrossTower CEO Kapil Rathi points out. When it came to regulatory issues, the New York Attorney General’s office singled out the coinance in 2018. Aside from that, the coinance is a solid choice for anyone looking for advanced crypto features because it’s one of the oldest and safest exchanges around.