The world of cryptocurrency can be a little confusing – mainly if you are a beginner.
While the concept and technology are fledgling itself, it is easy to get confused with all of the jargon, technicalities, and the vast amount of online platforms on offer to help you buy, sell, trade, and store your currency.
Here’s what we are going to cover in the guide to the best cryptocurrency trading platforms
- What Is Cryptocurrency?
- What Is Cryptocurrency Trading?
- The Best Cryptocurrency Trading Platforms:
– eToro
– Bitfinex
– AvaTrade
– Kraken
– IQ Option
– Poloniex - Which Tools Do You Need for Cryptocurrency Trading?
What Is Cryptocurrency?
Now, unless you have been living in a cave for the last couple of years, it is highly likely that you have heard of the word “cryptocurrency”- whether you know what one is, or what to do with one is an entirely different story.
So, for those of you that are not entirely sure, we thought it best to give you a little overview.
In short, a cryptocurrency is a digital, virtual, or alternative currency which uses cryptography for security.
In other words, a cryptocurrency is impossible to counterfeit due to this fact, and one of its most enduring allures is the fact that it is organic; it is not issued or controlled by a central authority which means it is theoretically immune to any governmental interference, manipulation, restriction, or regulation.
The first cryptocurrency was created back in 2009 and remains as the most well-known to date – Bitcoin was launched by an anonymous individual or group known only by the pseudonym Satoshi Nakamoto.
As a result of Bitcoins popularity, many similar currencies have been launched such as Ethereum, Litecoin, Dash, zCash, and Monero.
Cryptocurrencies make it easy for individuals and companies to transfer funds between two parties, particularly if a cross-border transaction is required.
Transfers are instant, secure, and one can avoid the often-hefty fees that are charged by banks for facilitating these type of operations.
The backbone of the cryptocurrency is blockchain technology which is an online, public, ledger that provides users of the currency with a full record of every transaction ever made.
It contains a comprehensive data structure which provides a limited threat to hackers and is replicated on all computers that are using the applicable currency.
What Is Cryptocurrency Trading?
Have you ever heard of Forex?
Forex is the trading of one currency against another, with the hope of making gains based on fluctuations of the value in world markets. Cryptocurrency trading is a similar concept.
Instead of trading say Euros for Dollars, you would trade an altcoin or cryptocurrency for USD or another fiat currency.
Cryptocurrency trading is the best alternative way to get involved with the world of cryptocurrency, and it doesn’t require expensive mining hardware or investing in cloud mining.
This brings a whole range of risks with it – all you have to do is purchase some coins, find an exchange or platform to trade and get going.
Trading in cryptocurrency is preferable to trading in Forex for lots of reasons – mainly it is quicker and easier to get started.
When trading Forex, you often need to open an account which takes days or weeks due to various procedures and processes that are required by law.
As virtual currencies are decentralised and not regulated by any government or authority, you can easily circumvent these issues and be up and running within a minutes or hours.
It is also easy to get out of crypto-trading as all you have to do is transfer your coins out of the exchange and back into your wallet meaning you don’t have to deal with any Forex brokers pressuring you and hard selling you to stay in the game.
Another advantage of cryptocurrency trading is the low spreads.
The spread is the difference between the ask and bid price of the market maker. A smaller range means that when you are exchanging, you make very little loss whereas with Forex after you exchange you have already incurred a loss of at least 0.0018% which when dealing with significant monetary sums, is not an insignificant amount.
When trading with crypto’s you also have the option to use leverage margin trading methods where you can trade an amount which you don’t have in the capital at that moment in time.
The usual leveraged ratio on cryptocurrency exchanges is 1:10 which means for each amount you have, you can buy with ten times that. While the risk is higher, the profit you can make from such trading is also significantly increased.
Getting started trading with cryptocurrencies is a quick and straightforward process, the most difficult of which is finding the best platform for you.
With so many options to choose from, it can be a little overwhelming knowing which one to choose- especially for beginners.
So, if you have made up your mind to dip your toes into the exciting world of cryptocurrency, let us read on to check out our pick of the best in the market.
The Best Cryptocurrency Trading Platforms
As we have mentioned, not all platforms are created equal and depending on your level of experience, the amounts you want to trade, and your reasons for doing so – there are plenty of options to suit you.
eToro
- Futures: Yes
- Hacked: Never
- Margin trading: Yes
- Security: Good
- Tradable coins: BTC, ETH, DASH, ETC, LTC, XRP
- Deposit fees: None
- Withdrawal fees: Yes
eToro markets itself as social trading and multi-asset brokerage. With registered offices in Cyprus, Israel, and The UK, it has a global reach and is fully regulated in all of those markets.
Founded back in 2006 in Tel Aviv as RetailFX, the eToro OpenBook social investment platform along with its copy trading feature were released in 2010. It allows traders to view, follow and replicate the actions of the networks top traders.
eToro also gives an opportunity for individuals to trade in stock CFDs, Forex, and cryptocurrencies and has over 4 million active accounts.
Read more in our eToro Review.
Bitfinex
- Futures: No
- Hacked: 2016
- Margin trading: Yes
- Security: Good
- Tradable coins: BTC, ETH, ETC, ZEC, XRM, LTC
- Deposit fees: No
- Trading fees: 0-0.2%
- Withdrawal fees: No
Bitfinex is one of the most well-known names on the market.
Offering a full-featured, spot trading platform for all of the prominent cryptocurrencies such as Bitcoin, Ethereum, Litecoin, Bcash, Iota, Ripple, ETP, NEO, OmiseGO, Dash, Zcash, Monero, Aventus, Eidoo, and Ethereum Classic.
The platform also offers leveraged margin trading through its unique peer-to-peer funding market.
They also pride themselves on the most liquid order book in the world, allowing the secure exchange of all the significant cryptocurrencies, with minimal risk of slippage.
With margin trading with a leverage of up to 3.3x, a fully customisable user interface, and extremely efficient and high levels of security, Bitfinex is one of the most respected platforms on the market.
Read more in our Bitfinex Review.
Binance
- Derivatives: No
- Futures: None
- Hacked: Never
- Margin trading: No
- Security: Excellent
- Tradable coins: BTC, ETH, ETC, XEC, XRP, BNB, ARK, AST, BNT, BQX, BTG, CTR, DASH, DNT, ENG, ENJ, EOS, XRM, LTC
- Deposit fees: None
- Trading fees: 0.05% to 0.1%
- Withdrawal fees: None
Binance boasts some of the best security you’ll find on a cryptocurrency trading platform.
The downside is this makes trading on Binance a bit slower than other platforms, but it’s reassuring to feel like you’re being protected, even if it can be a touch frustrating at times.
Regarding trading on Binance, the exchange is split into “basic” and “advanced” tabs, but even the basic tab isn’t the place for beginners to start their crypto trading adventure.
You won’t find any user guides to point you in the right direction, and the navigation isn’t exactly intuitive, even once you know what the figures and graphs are telling you.
In fact, usability, in general, isn’t a strong point for Binance. If you want the best security and an extensive range of tradable coins, this could be the one for you.
Binance is currently the most popular cryptocurrency trading platform within the crypto community, which is a statement on its own.
For more information, visit our Binance Review.
CEX.io
- Derivatives: No
- Futures: None
- Hacked: 2013
- Margin trading: Yes
- Security: Good
- Tradable coins: BTC, ETC, LTC
- Deposit fees: Yes
- Trading fees: 0.1-7%
- Withdrawal fees: Yes
CEX was one of the first Bitcoin trading platforms to hit the scene, back in 2013.
Sadly, it didn’t take long for the platform to get hacked, but the real concern is the volume of negative user feedback.
You’ll find complaints all over the web from people who say they’ve never received their fund withdrawals from CEX.
We managed to get a withdrawal released without any issues, and we’re not the only ones, that much is clear. But the sheer number of people screaming scam in regards to CEX makes us hesitant to recommend it.
Read more in our CEX.io Review.
Kraken
- Derivatives: No
- Futures: None
- Hacked: Never
- Margin trading: Yes
- Security: Excellent
- Tradable coins: BTC, ETH, ETC, DOGE, LTC, ZEC, REP, FCT, XRP, XRM, DASH, DAO, ICM, XLM
- Deposit fees: In some cases
- Trading fees: 0.0 – 0.26%
- Withdrawal fees: Yes
With a focus on Bitcoin trading, Kraken positions itself as a trading exchange for serious and professional traders.
Their focus is on security, healthy banking relationships, a fast and efficient trading engine, advanced order types, and profits that can be multiplied with Bitcoin margin trading to leverage long Bitcoin positions or short Bitcoin positions.
With 24/7/365 support, full legal compliance, high liquidity with low fees, and encrypted cold storage on offer for all clients, Kraken is a trendy choice.
Read more in our Kraken Review.
IQ Option
- Derivatives: Yes
- Futures: None
- Hacked: Never
- Margin trading: Yes
- Security: Excellent
- Tradable coins: BTC, BCH, BCG, Dash, ETH, ETC, LTC, DOGE, XRM, OmiseGo, XRP, ZEC
- Deposit fees: No
- Withdrawal fees: Yes
While not one of the biggest or the most popular platforms, IQ Option is one of the fastest growing.
Offering trading between all of the most popular commodities, as well as up to x 25 leverage, IQ Option also provides a multi-chart layout, technical analysis, and historical quotes across multiple platforms such as mobile, desktop, and tablet running on all operating systems.
IQ Option also offers excellent support such as volatility alerts market updates, stock screeners, calendars, and newsletters.
Read more in our IQ Option Review.
Poloniex
- Derivatives: No
- Futures: None
- Hacked: 2014
- Margin trading: Yes
- Security: Medium
- Tradable coins: BTC, ETH, LTC, XRP, XMR, DOGE, Dash, DGB, ZEC – over 70 currencies.
- Deposit fees: Yes
- Withdrawal fees: Yes
A US-based digital asset exchange, Poloniex offers maximum security and some great advanced trading features.
Priding themselves on top-notch security, they offer offline cold storage for client deposits and only keep a bit online to facilitate active trading.
Activity on the site is monitored 24/7 and auditors are on hand to shut down any suspicious activity.
They also do not operate on fractional reserves, and any funds that are uploaded are only used to fuel your trades, through your account.
However, comparing to modern cryptocurrency trading platforms, Poloniex is not the greatest option. It needs a substantial update (especially interface) to continue competing.
Read more in our Poloniex Review.
AvaTrade
- Derivatives: Yes
- Futures: None
- Hacked: Never
- Margin trading: Yes
- Security: Strong
- Tradable coins: BTC, BCH, LTC, ETH, Dash, XRP, NEO, XMR
- Deposit fees: No
- Withdrawal fees: Yes
AvaTrade is perhaps one of the most recognised names in the trading world.
A regulated Forex broker with a dedication to providing their clients with tailor-made trading solutions regardless of the trader’s previous knowledge or experience.
You can sign up quickly with a simple click of a button and be up and trading within minutes.
The site also provides a vast amount of literature for those that are not so familiar with trading and you can also choose from over 250 trading instruments ranging from fiat currency, cryptocurrency, CFDs, and bonds.
Which Tools Do You Need for Cryptocurrency Trading?
So now you have a clearer idea of what is involved in cryptocurrency trading, what other tools do you need to get started?
#1 Choose Your Coin
Firstly, you will need some coins – you need to think carefully and do your research on which type of currency is the best for you.
Will you go for Bitcoin or Ethereum? Litecoin or Monero? Not every coin is created equally and finding the one that suits you is key to your success.
Read more in our guide on How To Choose Cryptocurrency To Invest.
#2 Invest In Cryptocurrency Wallet
Next, you need to get yourself a cryptocurrency wallet.
You can choose from mobile, desktop, software, paper, or cold storage– and again each is suited to a different kind of trader, depending on how much you intend on buying, what you will be doing with it, and what your concerns regarding security are.
Read more in our guide to The Best Cryptocurrency Wallets.
#3 Pick Cryptocurrency Exchange
Once you have these two things, you need to pick your exchange of choice based on the information provided above.
Make sure it trades the coin you chose and that it has robust security features.
Read more in our guide to The Best Cryptocurrency Exchanges.
So, How Do I Start?
Remember that as with any trading, there is no guarantee that you will win, or make a return. Every kind of trading carries some risk; if it did not, everyone would be millionaires.
The key to increasing your chances of making a profit is keeping your eye on the markets.
Do your research, stay up to date with world affairs, and financial news, keep your eyes out for significant fluctuations in currency values and remember that nothing in life is predictable.
Another bit of good advice would be not to gamble more than you can afford – don’t use your mortgage repayments or the kid’s college fund to bet to invest in cryptocurrency trading- only put in what you can afford to lose.
Cryptocurrency trading is an exciting thing – and something that doesn’t show any sign of slowing down.
Even though it is risky if you use the best cryptocurrency trading platforms, you should feel more secure.
Our top choice is eToro due to its robust security features and stellar reputation. The platform is also planning to include a cryptocurrency exchange and wallet for its services, making it a perfect crypto all-rounder.
If you want to give it a go, read our How To Get Started With eToro, and if you need more generic information, check The Beginner’s Guide To Cryptocurrency Trading.
