Cryptocurrencies are the latest craze to sweep the finance world, with Bitcoin (ticker: BTC) dominating the headlines while Dogecoin (DOGE) nails the punchlines.
As the number of cryptocurrencies on the market continues to expand, investors have more options than ever before to exchange their hard-earned cash for decentralized digital money. But how do you go about trading your favorite cryptocurrency?
The internet is filled with horror stories of hackers swindling traders of their gains from poorly protected cryptocurrency exchanges, making it all the more essential to carefully choose a secure crypto trading platform before you make your investment. That said, which of the many cryptocurrency exchanges is the best choice for you?
There are myriad factors that will influence your decision: security measures, ease of use, trading fees and the number of coins available for trading all play a part in helping you determine the top crypto exchange for you. To help you find the cryptocurrency trading platform that meets your needs, here are five options to choose from that will suit a variety of cryptocurrency investors:
It should come as no surprise that Coinbase, one of the most popular crypto exchanges in the world, tops this list. Crypto traders have been using Coinbase since 2012, and the crypto exchange has only gotten better with age.
A user-friendly interface, straightforward onboarding process and a free $5 in Bitcoin just for opening an account make Coinbase an excellent place for new traders to get started. Daniel R. Hill, a certified financial planner and president of Hill Wealth Strategies in Richmond, Virginia, says Coinbase is the best site for beginners because you’re “able to see all of the coins in one place, (it has a) simple user interface and (you) can easily purchase a variety of crypto.”
Advanced users will enjoy Coinbase Pro, which provides more powerful tools for power users looking to dive into cryptocurrency trading.
With hundreds of digital currencies and altcoins supported on Coinbase, users have a good range of options to choose from, though the list is by no means extensive. In addition, users will want to watch out for high trading fees tacked onto their trades, part of a labyrinthine fee structure across the Coinbase site.
Coinbase is more expensive than other cryptocurrency trading sites and only has a few payment options, Hill says.
Another popular crypto trading site, Binance has only been around for the last four years but has quickly taken the crypto market by storm.
Based out of Hong Kong, Binance is an international exchange that supports more than 500 different cryptocurrencies. The website is very intuitive and straightforward, allowing users to switch between a basic and advanced version of the site at will as they progress in their crypto trading careers. While new cryptocurrency traders will find Binance simple to use, ultimately it might be best for crypto day traders — low trading fees, strong charting tools and an easy-to-use mobile app allows for fast, simple cryptocurrency trading. With all these strong features, it’s not hard to understand why Binance has become one of the largest cryptocurrency exchanges in the world.
The sheer volume of cryptocurrencies available is why Hill says Binance may not be best suited to beginners. “Often, when investors are starting out and familiarizing themselves with the market, less is more,” he says. “That being said, Binance is the better choice for those familiar with cryptocurrency lingo and investing options.”
Note that Binance doesn’t allow you to exchange U.S. dollars for cryptocurrency, though it does accept credit and debit cards — there’s a U.S. site for American users, but it offers more limited options than the main site. In addition, Binance has been hit by cyberattacks in the past, most recently in 2019 — though the site does have an insurance fund to cover any losses. That said, Binance is a secure trading platform that offers several powerful tools for users who want to invest in different digital currencies on the blockchain.
[Read: The History of Bitcoin.]
You may not think of Robinhood when you think of cryptocurrency trading — and for good reason. The mobile app known for commission-free stock trading — and for prohibiting users from selling GameStop Corp. ( GME) and other “meme stocks” earlier this year — is a stock-first app, but in 2018 Robinhood began to roll out cryptocurrency trading as well. In the years since, the company has slowly built up the crypto side of its app, allowing users in select states to trade a mere seven cryptocurrencies, including Dogecoin.
While that’s a small pool to work from, it’s a beginner-friendly selection for users just starting their crypto journeys. With the company’s mobile-first mindset, Robinhood has built an incredibly easy-to-use app, and no fees for trading mean the barriers to entry are extremely low. As for security, “Robinhood utilizes cold wallets to store your cryptos, meaning that the majority of users’ funds are held safely offline,” says Edmund McCormack, founder and CEO of Dchained. “However, in the event that a hack were to take place, they are underwritten by Lloyd’s to cover any cybersecurity breaches.”
You should know that Robinhood doesn’t allow users to remove their coins and put them into a wallet of their choice. In fact, Robinhood doesn’t let users use their coinage for payments — it is strictly a trading app. Robinhood lacks the bells and whistles of its bigger, better-established competition, and advanced users would be better served elsewhere. But it has all the essentials for a cryptocurrency rookie, and it might just be the best crypto exchange for new traders.
Founded by the Winklevoss twins in 2014, Gemini has established itself as one of the most trusted names in crypto. The two stars of Gemini were Bitcoin and Ethereum (ETH), but today the exchange allows users to trade more than 40 different cryptocurrencies on its site, including Bitcoin Cash and Gemini dollars, a U.S. dollar-backed stablecoin. Gemini is predicated on legitimacy, and the site was founded with regulation compliance as a top priority. The company is a fiduciary, and the site is Federal Deposit Insurance Corp. insured. As you might imagine, this means security is paramount for Gemini.
Gemini is known for its safety, with most of the coinage on the exchange held in cold storage. Plus, according to McCormack, Gemini has “an extremely responsive customer service branch, usually getting back to email inquiries within a few hours.”
McCormack notes that “Gemini’s trading fees are a bit higher than Coinbase Pro but less than Coinbase itself.” Fees are charged on a sliding scale depending on the frequency of trading, encouraging power users to use the platform more often but leaving one-time buyers paying an above-average fee. The site itself is straightforward, though the mobile app isn’t as intuitive as some of the competition, and the site doesn’t accept debit or credit card payments to fund your trading. That said, if your primary concern is safety and security for your crypto, trading via Gemini is an excellent choice.
Kraken has proven itself to be a trusted, secure crypto exchange since its founding in 2011.
With 90 coins available for trading on the site, Kraken’s selection is smaller than some but it makes up for that with excellent features that experienced crypto traders love. While the site has basic features for newer traders, Kraken’s Pro site is where it truly shines. Advanced tools such as margin trading and crypto futures are sure to attract power users, while the ability to stake your coins will appeal to set-it and forget-it users. As for security measures, Kraken has its own in-house proprietary custody solution and doesn’t rely on any third-party service, according to a Kraken spokesperson. In fact, the company says 95% of all deposits on Kraken are kept in offline, air-gapped, geographically distributed cold storage. The only time assets are moved online is when you trade or withdraw them from the platform.
Kraken’s maker-taker fee schedule system is confusing at best, and it often leaves users holding the bag for larger fees than they’d find elsewhere unless they’re actively trading during a 30-day period. In addition, as CrossTower CEO Kapil Rathi points out, Kraken’s exchange has been known to go out during periods of high volatility. Kraken was singled out by the New York Attorney General’s office in 2018 for compliance issues. That aside, Kraken is one of the oldest and safest exchanges available, and it’s a great pick for anyone looking for advanced crypto features.
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Update 09/27/21: This story was published at an earlier date and has been updated with new information.