Cryptocurrency is trending, and everyone wants to get in on the action. However, you cannot just go down to your traditional bank or investment firm to buy and sell crypto. Instead, you’ll need a reputable crypto exchange.
Are you wondering what types of cryptocurrency exchanges there are? If you start to research the topic, you’ll probably feel inundated with choices. With names like Redot, Kraken, Gemini, CoinEgg, eToro, Bisq, and Binance – they don’t sound like your typical financial institution. Which one is best with the lowest fees and most robust security features? After all, it’s no secret that some have been hacked, and others offer substandard security features. In this article, we will explore cryptocurrency exchanges.
A crypto exchange allows you to buy, sell and exchange crypto for another. You can effectively convert Litecoin to Bitcoin. Also, you can use regular currency, such as US dollars, to purchase crypto or convert crypto into another currency. There is the option of leaving cash within your account that you can later use to purchase more crypto or transfer the funds to a regular bank account. The exchange rate is always a reflection of the current market prices.
Honestly, no crypto exchange stands out as the ‘best’ because each user has diverse needs. What works well for one user might not for another. Ultimately, you must find the best crypto exchange that aligns with your goals.
Best Crypto Exchanges to Buy Bitcoin
Below is an evaluation of two of the leading crypto exchanges to buy bitcoin:
Coinbase
Coinbase features more than 50 cryptocurrencies such as Bitcoin, Ripple, Ethereum, Dogecoin, and more. You’ll have the option of picking from multiple investment choices. They service both individual and institutional clients.
Choose from two options with Coinbase:
- Coinbase Pro gives users access to advanced perks such as charting tools, real-time order books, and trading bots. This is ideal for advanced traders or institutions with a net worth of at least a million.
- Coinbase Prime lets institutional clients use commerce services like cold storage for offline crypto and Asset Hub, where you can list and expand your crypto products using the specially designed platform.
One of the nice things about Coinbase is that they have managed to sidestep and avoid any controversy, which provides users with some peace of mind. The user platform is easy to use, making it an excellent tool for those new to cryptocurrencies.
The company does carry insurance for protection against hacking or data breaches. In addition, your money is kept in FIC-insured bank accounts.
Redot
Redot is not a mega financial corporation; but instead, it is headed by a team of industry veterans. They provide a marketplace infrastructure, complete data services, and a wide array of technology solutions to include financial institution needs, investing (both direct and broker intermediated trading), and risk management.
The crypto exchange provides an easy-to-use and understand platform for institutional, professional, and retail investors to trade digital assets such as bitcoin with low commissions safely. The exchange offers trading and custody services for Ethereum (ETH), Bitcoin (BTC), USDA Coin (USDC), Ethereum 2 (ETH2), Tether, and more.
They offer connectivity using REST and FIX protocols along with model user UI and desktop. The Estonia-based crypto exchange is specifically designed to fulfill the needs of global customers who want to focus on Bitcoin and Ethereum.
The security provided by Redot is reassuring with monthly audits, withdrawal protection, deep cold storage, U2F, 2FA, and more. The company is fully regulated with both exchange and custody licenses issued from EU member country Estonia.
Best Crypto Exchanges to Stake Ethereum
With staking, your funds don’t just sit there. Instead, you can earn annual interest that varies between 5 to 20 percent.
Ethereum (ETH) remains one of the best to stake at an annual interest rate of about 7 percent. However, the rate can fluctuate depending on the number of validators. If you are going to run a node independently, you’ll need 32 ETH, which is roughly $64,000. However, two of the best crypto exchanges to stake are Gemini and Coinbase, which lets you stake with no minimum amount required for Ether.
You’ll have different options to pick between to stake Ethereum. Basically, you’ll need a dependable international connection and a specialized staking platform combined with either an Ethereum node or specialized hardware.
Staking Ethereum is exciting and can pay off well, but it is not without risks. Even if you earn 7 or 10 percent annual interest, you still might not make money if the crypto’s stake plummets.
Another thing to think about is staking lockout periods. Depending on the crypto, you might be able to take out your investment any time you want to, but others have a lock-up period for staking. If you stake Ether on Eth2, you will not be able to pull your investment until the Eth2 upgrade, which probably won’t go live until sometime in 2022.
Best Crypto Exchanges for Trading Crypto Derivatives
Initially, there were very few cryptocurrency markets, but that has changed. Now the options seem endless, and it’s hard to know which ones are the best crypto exchanges for trading crypto derivatives.
You’ll find a range of both traditional centralized exchanges coupled with fully decentralized alternatives. The diversity has increased the variety of assets substantially for trade on the exchanges. Derivative exchange platforms let you trade assets like futures, options, and perpetual contracts.
Bybit
One of the leading centralized exchanges is By bit, which was launched in 2008. The 24-hour volume can top $10 billion, so the trading pairs are very liquid. They offer multi-language support that is available 24/7. Without a doubt, by bit is one of the easiest-to-use exchanges for crypto derivatives.
DyDx
For a decentralized exchange, DyDx stands out. They offer on-chain perpetual contracts. In addition, they also have a visible order book that features L2 data and built-in interactive charting software.
DyDx is Ethereum-based. You connect your wallet, and you can effortlessly start trading.
With a plethora of cryptocurrency exchanges springing up, it’s hard to choose the best type for your needs. You’ll need to take a hard look at which particular institution fits your needs to achieve your ultimate goal.