Whether you're an experienced investor looking to trade between cryptocurrencies or a newbie looking to buy your first coins, the easiest way to purchase cryptocurrencies is by using an exchange. However, there are dozens upon dozens of cryptocurrency exchanges out there, so which should you pick? In this guide, we'll give you all the information you need to pick the best cryptocurrency exchange for you - including advice on how to avoid scams and reduce fees.
Before we can pick the best cryptocurrency exchange for you, let's lay out some of the most important features and qualities to look for.
Currency pairs are the distinct trade listings you'll see on cryptocurrency exchanges. Examples might be USD/BTC, the trade of US Dollars for Bitcoin (or vice versa), or ETH/XMR, the trade Ethereum for Monero (or vice versa).
The only way to trade cryptocurrencies on an exchange is through these pairs, so you need to find an exchange with the currency pairs that interest you. In some cases, you might need to make trades between multiple pairs, potentially on separate exchanges, to trade from one currency to another.
Due to regulatory pressure, there are a great number of exchanges with currency pairs consisting of just cryptocurrencies; if you're looking to purchase cryptocurrencies using fiat currencies like the US Dollar, Euro, or British Pound, you'll have fewer choices.
You can check an exchange's currency pairs on the exchanges section of our coin research platform Coinpaprika.
Another quality to look for in any cryptocurrency exchange is high volume. Volume is the quantity of cryptocurrency that is traded across a single currency pair or an entire exchange.
High volume means that a large number of users are buying and selling cryptocurrencies (or a particular currency pair), thus allowing trades to be carried out faster and with more favourable fees.
There's no rule of thumb for how much volume is enough, since it can depend on the size of the trades you're looking to conduct. Either way, you can find information about an exchange's volume on Coinpaprika.
Every exchange takes a fee for each transaction, and in some cases they might take fees for withdrawals. The lower the fees, the less of your hard earned cash you have to give away when using the exchange.
Binance is one of the world's most popular exchanges, and at an 0.0750% fee per trade, its fees are considered reasonable.
Most exchanges are very similar in the way they work: you deposit one currency, submit a trade, and withdraw another currency. However, this process may be daunting for newcomers, so it's worth looking into the usability aspect of a cryptocurrency exchange before you commit to it.
Ease of use is especially a concern with decentralized exchanges, which tend to work a little differently and have additional or more technically involved steps.
As with every aspect of cryptocurrency ownership, security is an extremely important factor when you go to trade currencies on an exchange.
While it's generally accepted that you should not keep your cryptocurrencies on exchanges (since even the best of exchanges are susceptible to malicious attacks), your coins are still under risk during the entire interval between your initial deposit and your final withdrawal - so be sure to choose an exchange that takes security seriously.
The most important security features to look for on a new exchange are two factor authentication, which reduces the likelihood of an attacker accessing your account, and cold storage, which reduces the likelihood of an attacker stealing funds from the exchange.
If you trade extensively, issues are bound to come up. When they do, it's important to know that your chosen exchange has a fast and friendly support team ready to help.
One of the most common issues users face is having sent a cryptocurrency to an incorrect address (albeit one of the exchange's addresses). In these cases, it's sometimes possible to recover these funds, but a helpful support team is essential. Unfortunately, it's hard to evaluate an exchange's support before you start using it.
Customer satisfaction is a very broad quality to look for in a cryptocurrency exchange, but it's one of the most important for a beginner. If you're not sure what features to look for, understanding others' experiences with an exchange might guide your decision better than anything else.
Aside from the above factors, you might have some additional requirements that will help you narrow down your selection. Some examples include:
To find out about these matters, you'll need to do some of your own research. While we don't collect all of this data on the exchanges section of our coin research platform Coinpaprika, we do share the official links websites and social media pages of these exchanges so you can get information right from the source.
To choose a cryptocurrency exchange, we recommend you start with your requirements - namely, which currency pairs are you looking to trade?
Once you've decided which currency pairs you want to trade, you can find a suitable exchange by looking through the currencies' websites or reviewing the exchanges on our coin research platform Coinpaprika.
Then, you can rule out the exchanges with insufficient volume. For the casual investor, anything more than $100,000 in volume per 24 hours is probably enough; larger investors might have to find exchanges with upwards of $1,000,000 in volume per 24 hours to ensure they can make speedy trades.
From the exchanges that are left, you can review their online ratings, security policies, and fees to make sure you're getting the best possible exchange.