Review Bitcoin Exchanges: Binance, Coinbase, Gemini, Cex, ShapeShift
It’s fairly easy to find an exchange that deals in bitcoin — there are at least dozens of them, and they are easy to find.
Unless you happen upon a cache of cryptocurrency through a private transaction, such as selling your vintage Jaguar XKE for a boxcar of Ripple, you’re going to need to go to an exchange to purchase some, ostensibly for cash.
As silly as it might seem to caption the obvious, the first real step in selecting an exchange is to consider what sort of crypto it sells and what is accepted in return — be it another crypto, euros, the U.S. dollar or even airline miles. It’s fairly easy to find an exchange that deals in bitcoin — there are at least dozens of them, and they are easy to find. Locating a platform on which to purchase some of the lesser-known alt coins can take some digging. Keep a few things in mind as you look:
1. Important Initial Considerations
Reputation is key. One of the great things about the Internet is the ability to find information on just about anything, from some random geek’s 50,000 =word critique of the trailer for the newest Star Wars picture or a side-by-side comparison of low-wattage compact fluorescent light bulbs. Clearly this is helpful when choosing a new Subaru in lieu of another Accord, and it’s not something you should overlook when choosing an exchange. That said, of course, be mindful that some people on the Internet are just, well, grumps — and grumps that are cheesed off about their experience often tend to write hysterical and/or histrionic reviews. So be mindful to pay attention to thoughtful reviews that reference specific features, pro and con, Check out several sites. (And, frankly, steer clear of information overload like Reddit, which can do more harm than good.)
Be sure to investigate all of the site’s security protocols. Let your nose be your friend — if you smell a rat, or think you smell a rat, then steer clear. There’s nothing wrong with buying your coins on an exchange parked heaven knows where on the Web. It likely will turn out fine, as most online purchases do.
But if you don’t want to take any chances — and there is not one thing wrong with that — then go to a large bank and let them help you. Crypto is a new world, and it’s prudent to be cautious. If you feel like you don’t quite understand the security, then either do some additional research or consult with an expert.
We found ourselves consulting with plenty of bright 12-year-olds as we wrote this! The next consideration is volume. The more volume, the better likelihood you have to capture returns by trading. Most of us are keyed to process volume data in the context of the stock exchanges.
Avoid this natural mental comparison. 39 Volumes need context, just as does every number in the financial world, but the only number that really matters is the volume on that exchange the day, week and month before. Compare that with other exchanges to get an apples-to-apples look at what’s going on.
Finally, look at usability. You’ll likely encounter this in the reviews, but it bears repeating. If the exchange is tough to use, or tough for you to use, then the odds greatly increase that you will miss a trick. Find an exchange where trades can be placed easily, the trading environment can be easily navigated and, in the best of cases, that have a ton of data available for you to check out — and use to discern trading patterns.
If this were a cutesy review, the headline would be, ‘Well, it’s functional.’ Think of ShapeShift as the cryptocurrency drive-thru. It lets you buy and sell bitcoin, Ethereum, Monero and Dash, among others. Some traders want to feel like they have a relationship with their broker.
This ain’t that. This is the no-tell hotel of crypto trading: You don’t need an account and you don’t need to leave your coins on the exchange. It is not trouble for a beginner to navigate easily and use effectively. The downside is limited payment options — sorry, no cards. Dashboards, info and other tools are damn light. Another option along these lines is CoinMama.
Among the most popular exchanges, Coinbase is trusted by millions of users all over the world, including beginners. Users like that it’s easy to use — to buy, sell or store currency. You can buy bitcoin, Ethereum and Litecoin; its digital wallet runs on Android or iOS.
If you prefer, you may choose to trade directly with other users on Coinbase’s GDAX platform, which stands for Global Digital Asset Exchange, and there aren’t any fees to move funds between Coinbase and GDAX. It’s secure. GDAX is meant for technical traders. Don’t use it for buying and holding.
Gemini is probably the platinum standard, the Goldman Sachs or Bessemer Trust of the crypto world. It’s nicely rendered and easy to use, with strong tools for more sophisticated traders, and there is plenty of liquidity.
Gemini is regulated, it’s licensed by the United States, which means it must meet strict capital requirements and other benchmarks just like a bank. (Check whether your state allows for full access to the site; only 42 do.) 40 Gemini keeps all dollar deposits in an FDIC-insured bank, which are guaranteed by Uncle Sugar up to a quarter mil. Additionally, Gemini keeps most of its coinage in cold storage, which is extremely safe. The drawback, though, is selection: Users are limited to the dollar, bitcoin and Ether. Deposits and withdrawals are free; you pay to trade, and high-volume players get a little discount.
Cex.io is a professional-grade site for users who know what they are doing — the trading dashboards are very good. Margin accounts available. Security is strong, and CEX even accepts credit cards. While it has a lot of bells and whistles, this is a site that newcomers can feel comfortable with, even if all they want to do is buy and hold. Coins may be kept in the cloud or in cold-storage wallets. The data here is dependable and complete, and CEX has a lot of altcoin choices, though bitcoin is still the biggie.
The mobile version has been reviewed favorably, and the exchange rates are good. The one gripe some have is that the verification process is onerous, but the flip side to that, of course, is greater security and less concern over bad actors getting in. A word to the wise: Keep an eye on fees. All of them, all the time.
Poloniex is what some would call the “Mall of America” of cryptocurrency. It’s been around since 2014 and is today considered among the world’s leaders. Setting up an account in a cakewalk. It has more than 100 currency pairings, so it can feel like trying to get a sip of water from a firehose because of the sheer amount of info available.
Expert traders will love the analytic tools — and the volume, which is substantial. Fees are reasonable, but you should always know what the freight charge is coming and going. Reviews say the customer service is lousy.
Kraken is a massive and reputable bitcoin exchange, with significant volume in euros, yen, dollars, Canadian dollars and the British pound, which opens up some fascinating arbitrage opportunities for sophisticated traders.
Kraken also lets you invest in or trade in a ton of altcoin, among them Ether, Ripple, Monero, Ethereum Classic, Litecoin, Dogecoin and Zcash. Margin accounts are available — though these are not recommended for anyone without significant trading experience. Kraken is feature-rich like a Bloomberg terminal and about as intuitive to use, which is to say not very.
This is an excellent site to investigate when you have mastered the basics on a site like Coinbase.