Cryptocurrency is attracting a lot of attention from investors right now. And with good reason. Last year, Bitcoin enjoyed an astronomical 1,400% growth!
Professional traders already see dollar signs with several 0000’s after it. And the Bitcoin explosion in the past 12 months has even alerted casual investors to the crypto market.
Don’t jump the gun just yet though.
Investing in cryptocurrencies requires due diligence in a couple of areas. You obviously need to choose wisely when backing a digital token.
Not all of them will be successful. Investors also have to be careful when choosing the best cryptocurrency exchange to buy and sell in 2018.
Needless to say, where there is money to be made, there is a scam in the making. Cryptocurrency exchanges are no exception, and several illegitimate online businesses are lurking on the dark side of the internet.
In this article, we take a look at the best cryptocurrency exchanges to buy and sell in 2018. The advice we offer is based on professional experience and considerable research into digital currency exchanges that offer the best value and service for customers.
What’s a Cryptocurrency Exchange?
Cryptocurrency is a digital currency that can be used for trading or investing over the internet. Cryptocurrency exchanges enable you to buy digital tokens or convert cryptocurrencies already in your investment portfolio into traditional currencies.
Although digital tokens are controversial, (banks don’t like it) the concept is designed to fit the architecture of the internet and the growing trend of online shopping. Blockchain technology also eliminates hacking.
The likelihood is that cryptocurrency will be the future of eCommerce – and may even replace fiat currency.
What’s more, cryptocurrency is peer-to-peer regulated and essentially controlled and guaranteed by users, not banks or governments – which is why the banks don’t like it!
However, financial regulations are a priority, and the leading cryptocurrency exchanges are laying the foundations that will set industry standards.
Before investors can open an account with a cryptocurrency exchange, you are obligated to verify your ID and own a bank account in a country which has not declared digital currency illegal.
Furthermore, by funnelling cryptocurrencies through legitimate and trustworthy exchanges, transactions are confirmed by the network of computers on that currency’s network. This makes regulating transactions easier and quicker.
How To Choose The Best Cryptocurrency Exchange?
Before you decide to use a cryptocurrency exchange, research your options and perform due diligence.
There are some cryptocurrency exchanges that do not always act in the best interest of their stakeholders.
For example, in 2011 Mt. Gox claimed the company’s computers were supposedly hacked and more than $450 million worth of investment stolen.
According to the blockchain community, the technology prevents accounts from being hacked. You can make your own conclusions.
However, Poloniex falls into the proverbial category of “too big to fail” and survived the tides. The company is still a major player in the blockchain sphere, and we have seen them recommended by other commentators in the cryptocurrency community.
Poloniex doesn’t appear on our list, however. The backhanded slap in the face of their stakeholders is challenging to accept.
The cryptocurrency exchanges we recommend have to meet the conditions of our trust test.
Qualities to look for in cryptocurrency exchanges:
Cryptocurrency exchange’s reputation is a vital consideration. Look for user reviews across the multitude of industry forums and post questions on reliable websites that provide advice about blockchain and investing in ICO’s.
Cryptocurrency exchanges charge fees for making deposits, transactions and withdrawals. The cost of the fees differs quite dramatically.
#3 Verification Process
ID verification requirements are a necessity to regulate cryptocurrencies. Register with a company that requests verification, but also make sure the exchange will accept investors from your country. Financial regulatory bodies are starting to block investors in certain countries and on specific coins.
#4 Accepted Currency and Payment Methods
Payment methods can also differ from one exchange to the next. Some don’t allow you to buy coins with traditional currencies for example. Other won’t accept credit cards, whereas others accept wire transfers or PayPal. The payment method you choose can impact in transaction fees or remuneration given the volatility of the market.
#5 Exchange Rates
Exchange rates impact the number of your earnings, so it’s worth shopping around for the most reasonable prices.
The Best Cryptocurrency Exchanges of 2018
Based in China, Binance broke into the top five best cryptocurrency exchanges after attracting 3 million customers in just five months.
With such a high surge in trading volumes over a short period, Binance is clearly trusted by professional traders and are expected to be a leader in the crypto community.
Okay, you could argue that Binance’s meteoric rise was due to its incredible give-away competition prizes; a Porsche Panamera, Lamborghini Huracan RWD Coupe and a 2018 Maserati 3.0T Levante Classic will turn anybody’s head.
But the company also has significant trade factors that make them an attractive proposition:
- quick transactions
- low-interest rates
- excellent user ratings
- token based model
- trader-friendly exchanges
- easy-to-use website
The company’s infrastructure comfortably handles 20 million logins simultaneously plus 1.4 million trades per second.
Furthermore, Binance has installed a “Launchpad” feature which allows ICO’s to go straight to market. This reinforces their credibility as cryptocurrency exchange platform and sets industry standards.
The one solitary downside is that Binance is a crypto-only exchange and does not accept fiat currency deposits.
This digital exchange outfit is, therefore, no use to newcomers but arguably the best option once cryptocurrency is part of your investment portfolio.
Another plus with reviewers is the company’s competitive referral system and their excellent 24/7 customer support team which is available in multiple languages.
What’s more, if you purchase the company’s very own digital currency – $BNB – Binance offers a free discount to pay exchange fees.
Founded in 2012, Bitfinex is a cryptocurrency exchange operating out of Hong Kong and despite being hacked in 2016 continues to be one of the top three cryptocurrency exchanges in 2018 (at the time of writing at least).
Bitfinex survived the hacking scandal because they have the world’s most advanced business model for cryptocurrency exchanges.
The company also trades the most Bitcoins against the US dollar and facilitates the trading of many other altcoins. In our view, they have to prove their reputation, which is why we have included them on our list.
The core features of Bitfinex are exchange trading, margin trading and margin funding. This gives investors more options to deposit, trade and withdraw digital currency either in cryptocurrencies or traditional currencies.
Margin trading allows investors to trade with up to 3.3 times the leverage of your initial investment.
Additional funding is secured through a peer-to-peer financing platform. Investors that provide funding to other users also earn interest on digital assets.
In the latter part of 2017, Bitfinex discontinued its services to US investors attempting to purchase EOS and SAN tokens. The reason for this is because U.S. Securities and Exchange Commission (SEC) argue the Ethereum ICO is considered a security.
Subsequently, banks in the States are declining transactions in correlation with Bitfinex. Read our Bitfinex review for more details.
Based in Vienna, Austria, BitPanda is one of the most trusted cryptocurrency exchanges in Europe.
Founded in late 2014, the company (formerly known as Coinimal) is a major player in the buying and selling of Bitcoin, Bitcoin Cash, Ethereum, Litecoin and Dash.
Patrons can sell digital tokens through BitPanda from anywhere in the world, but investors have to be based in Europe in order to buy cryptocurrencies from BitPanda.
The company has multiple payment options and low fees for buying crypto with a credit card.
One of the principal features of BitPanda is the level of security the company offers.
Some investors may consider the ID verification as a negative aspect, but the reason for the company’s security measures is to protect investments from scams and money laundering that can damage the reputation and survival of the company.
The ID verification process includes providing a phone number, email and government issued ID.
Applicants that want the higher transaction limits are also asked to go through a video chat verification with a member of staff. The process reinforces the credibility of the company and protects future trading.
By all accounts, BitPanda has an A1 customer service that is flexible, helpful and reliable.
As a matter of fact, the overall service provided by the company earned them the best Fintech startup award in Austria.
In our BitPanda review, we are covering the exchange in more detail.
For investors looking to sell Bitcoins, CEX.io is arguably one of the best options available right now.
Established in London, England in 2013, CEX.io was the first company to mine Bitcoin. Today the company operates solely as a Bitcoin, Dash and Ethereum exchange.
Currently, the exchange is one of the best regarding accepted currencies as customers can fund their account with USD, EUR, GBP, RUB and BTC.
The company has already established a solid reputation in the blockchain community.
To further enhance their credibility as a legitimate and trusted Bitcoin exchange, the company is registered with FinCEN and applies Anti-Money Laundering (AML) and Know Your Customer (KYC) policies.
Customers, therefore, have to go through an ID verification process to purchase or sell Bitcoins through the exchange. The security solutions involve secure data encryption and requesting applicants to execute a two-factor authentication process.
Furthermore, CEX.io has developed a reliable anti-DDoS attack system to eliminate the possibility of hacker attacks. This attention to security solutions provides an extra layer of protection to safeguard your personal and payment details and underscores the company’s reliability as a leading cryptocurrency exchange.
Another plus for customers is that CEX.io freeze trade prices for two minutes once you enter into a transaction.
This function safeguards the execution of your order and ensures you will not come out with worse conditions than you agree to. Given the potential liquidity problems associated with Bitcoin, this is a major plus for stakeholders.
There is a risk you could miss out on better prices of course. Or so you would think, but CEX.io have that covered too.
Their sophisticated system informs you of a spike in the exchange rate and gives you the option to take advantage of favourable prices.
In essence, the amount you agree on with CEX.io may sometimes be more considerable, but never less.
The number of cryptocurrency exchanges and the digital currency has exploded over the last couple of years.
And now more online merchants are gradually beginning to accept cryptocurrencies, the widespread acceptance among consumers will cement digital currency as a viable tool for online shopping.
2018 could prove to be a crucial year for the evolution of cryptocurrency creeping into the online sphere.
If you are thinking of investing in digital tokens, make sure you do plenty of research to identify legitimate currencies and act fast while the price is still low.
Treat cryptocurrencies as you would with any investment. If you’re still not sure about the ins and outs investments, check our Guide to Sucessfully Invest in Altcoins and ICOs.
Approach buying and selling with due diligence and accept you may lose money before you make gains. In our view, the four best cryptocurrency exchanges to buy and sell in 2018, are the companies discussed in this article.
However, new players and bad press can change the crypto landscape dramatically, so before making a decision, check the current status of cryptocurrency exchanges and find out what other stakeholders are saying on cryptocurrency forums.
For more information and reviews, vie our Cryptocurrency Exchanges page.