February 19, 2021

Best Cryptocurrency Exchange

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Want to invest in crypto? The right platform can help you get started. Here are the best exchanges to safely buy bitcoin and other cryptos.

Bitcoin and cryptocurrencies are super-hot right now. But, it comes with its risks. Getting started can seem pretty daunting, especially if you're new.

The truth is, modern platforms make it easy to start trading. If you're considering getting in on this investment, the first question is where to trade crypto safely and securely.

Whether you're looking to test the waters or trade more seriously, here are the best, trustworthy platforms and exchanges to start your cryptocurrency journey.

We've chosen safe websites with unique features. Read on to find the right one for you.

10 Best Cryptocurrency Exchanges and Platforms
  1. Most Popular: Coinbase
  2. Good for New Traders: eToro
  3. Earn Interest on Coins: BlockFi
  4. All-in-One Platform: Gemini
  5. Stock + Crypto Investing: Robinhood
  6. No-Fee Trading: Webull
  7. Strong Security: Kraken
  8. Most Coins: Binance
  9. Crypto IRA: iTrustCapital
  10. Many Payment Options: Coinmama

1. Coinbase

Most popular; learning program to earn cryptos

Coinbase is one of the largest crypto exchanges with over 35 million users. It's a trading platform and crypto wallet to store your digital coins. It has a simple interface that makes it beginner-friendly.

Screenshot of Coinbase

However, Coinbase's trading fees could get high. Every trade has a flat-rate or variable fee, whichever is greater. Fees are:[1]

  • Transactions $200 or less: flat fees of $0.99 - $2.99
  • Payment with U.S. bank account: 1.49%
  • Payment with Coinbase USD Wallet: 1.49%
  • Payment with debit cards: 3.99%

It also charges a spread of 0.50% for crypto buys and sells. For cryptocurrency conversions, Coinbase charges a spread margin of up to 2%.

Coinbase supports over 45 different types of cryptocurrencies. The minimum trading amount is $2.

Why Coinbase is good for beginners: The simple user interface won't overwhelm newbies. It also has a learning program that lets you earn pieces of cryptos as you complete mini-lessons. You can earn up to $167 worth of crypto.

For more experienced crypto traders, Coinbase Pro is the advanced trading platform. It lets you place advanced order types and has lower trading fees.

2. eToro

Social trading; copy other top investors

eToro is one of the most popular exchanges globally. The really cool thing about this platform is the social trading. You can view other users' portfolios and discuss and learn together.

Screenshot of Etoro

The unique CopyTrader feature allows you to copy the actions of top-performing traders. When they make a trade, you automatically trade too. This is great for new traders who aren't sure what to do.

You also get a free $100,000 virtual portfolio to practice your strategy before committing real money.

eToro charges no trading commissions - only a spread when you buy and adjusted when you sell.[2] Each coin has a different spread. Bitcoin's 0.75% spread is one of the cheapest in the industry.

eToro supports the most popular 14 cryptocurrencies.

For investors who are performing well, you can apply to be part of the Popular Investor program. Then you get paid every time a user copies you!

3. BlockFi

Earn interest on your digital coins

BlockFi is a cryptocurrency exchange, savings account, and loan service all in one. The trading platform lets you trade with no trading fees.

Screenshot of Blockfi

The BlockFi Interest Account lets you earn up to 8.6% APY on any cryptos you're holding, which is way more than the average bank savings account. You'll start earning interest as soon as your trade is placed.

Another cool feature is that you can borrow against your cryptocurrency value. If you need funds, you can just take out a loan instead of having to sell your coins.

BlockFi currently supports BTC, ETH, LTC, USDC, USDT, GUSD, PAX, and PAXG.

4. Gemini

All-in-one crypto exchange and wallet

Gemini is an all-in-one platform to buy and sell, manage your crypto portfolio, store, and pay with your digital coins.

Screenshot of Gemini

It offers a basic platform for beginners, as well as an ActiveTrader platform for advanced investors.

Besides buying and selling crypto on the exchange, you can also negotiate trades off the exchange with another Gemini account. Gemini helps broker the exchange to mitigate risk.

There's a convenience fee of 0.50% per trade. Trading fees are:[3]

  • $10 or less: $0.99
  • Over $10 but less than $25: $1.49
  • Over 25 but less than $50: $1.99
  • Over 50 but less than $200: $2.99
  • Over $200: $1.49%

A cool feature is that you can pay with your digital coins at more than 30,000 popular retailers across the U.S., straight from the mobile app.

You can trade 26 different cryptocurrencies on Gemini. The first 10 withdrawals are free each month.

5. Robinhood

Stock & crypto investing app; no trading fees

Robinhood, the popular micro-investment app, also allows you to trade crypto with no trading fees. This is a big pro since crypto exchanges usually charge a fee.

Screenshot of Robinhood

One thing to note: Currently, Robinhood does not support coin withdrawals. You can buy and sell your coins, but you don't actually get access to your wallet. This feature is in the works for the future.

But Robinhood's simple app still makes it a good choice if you just want to try out investing in crypto.

There are 7 cryptocurrencies available for trading on Robinhood: Bitcoin, Bitcoin Cash, Bitcoin SV, Dogecoin, Ethereum, Ethereum Classic, and Litecoin.

6. Webull

No trading fees; buy and sell from $1

Webull is another brokerage with a crypto platform. There are no trading fees. You can buy and sell cryptocurrencies starting from $1.

Screenshot of Webull

So far, Webull offers Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.

Your trades are instantly settled, and you can trade 24/7, seven days a week. Just like Robinhood, you're not able to withdraw coins.

7. Kraken

Strong security; leveraged crypto trading

The Kraken platform is very feature-rich. For beginners, it's intuitive enough for simple trading after setting up an account.

Screenshot of Kraken

But where it really shines is the leveraged trading options for advanced traders. It offers up to 5x margin trading and futures investing up to 50x leverage. You can even short cryptos. Just beware that these are riskier strategies, but have higher reward potential.

Kraken fees range from 0% to 0.26%.[4] It supports over 50 different cryptocurrencies.

8. Binance

Most number of coins; low trade fees

Binance.US supports over 50 different cryptos. It's especially good if you want to trade altcoins and cryptocurrency pairs.

Screenshot of Binance

It offers basic and advanced platforms based on your experience. But newbies may find that even the basic platform is not as beginner-friendly.

Binance fees are much lower than some other crypto exchanges. It charges a standard 0.1% trading fee, and 0.5% instant buy and sell fee.[5]

Binance is the largest exchange in the world in terms of daily trading volume, but the global platform is no longer available to American users. Binance.US does not currently support users in CT, HI, ID, LA, NY, TX, VT, and WA.

9. iTrustCapital

Invest in cryptos in an IRA

iTrustCapital lets you trade and invest in cryptos for your retirement in an IRA account. This lets your gains grow tax-deferred or tax-free (depending on which type of IRA you choose).

Compared to other crypto IRAs, iTrustCapital's fees are transparent and a lot lower. There's a 1% trading fee for cryptos and $29.95 monthly account fee. The minimum opening deposit is $2,500.[6]

iTrustCapital supports Bitcoin, Ethereum, Litecoin, Bitcoin Cash, XRP, EOS, Chainlink, and Stellar.

You can transfer an existing IRA or rollover an employer retirement plan. If you already have a crypto IRA, you can even do an in-kind transfer without liquidating your cryptos.

10. Coinmama

Many payment options

Coinmama is aimed toward beginner crypto investors. The buying process is made simple. And there's a support team to help at any time.

The biggest pro about Coinmama is the many payment options. You can buy coins with bank transfer, credit card, debit card, or Apple pay.

However, the fees are expensive. The commission fee can be as high as 3.9%. And purchasing with a credit or debit card can even incur another 5% fee.[7]

Coinmama only supports 8 cryptos: Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Cardano, Ethereum Classic, Tezos, and Eos.

How Do Cryptocurrency Exchanges Work

A cryptocurrency exchange is a platform where users can buy, sell, and trade cryptocurrencies. Users can deposit fiat currencies (USD, EUR, CNY, etc.) from their banks, and use them to buy crypto.

They can also trade cryptocurrencies between one another, like from Bitcoin to Ethereum. Users can sell their cryptocurrencies and be paid in fiat, or withdraw them into crypto wallets.

Exchanges typically earn money by taking the difference between the bid and the asking price, a cost which is not normally visible to the user, and from fees, which vary widely from one exchange to another.

Types of Cryptocurrency Exchanges

Not all cryptocurrency exchanges work the same way. Here are the different types.

  • Centralized exchanges
    Centralized exchanges are regulated by a middleman that conducts the transactions. The exchange holds your coins and keep them safe (just like how a bank holds your money). These sites will require identity verification.

    This is the most common way to trade cryptos. These exchanges have high activity and liquidity.

    Examples of centralized exchanges include Coinbase, Gemini, and Kraken.

  • Decentralized exchange
    These exchanges are not regulated by any official authority, thus often called a "trustless environment." Users get full control of their coins. Users can directly trade coins with each other without a middleman. They focus more on anonymity.

    We don't have any of these exchanges on our list, as they're better suited for more experienced traders.

  • Brokerages
    You can now even trade crypto coins with some online stock brokerages (like Robinhood and Webull). This is a great option if you want to have your stock trading and crypto trading under one broker.

    But the downside is that they're not digital wallets and you usually cannot withdraw coins to use.

What to Look for in a Cryptocurrency Exchange

  • Security
    Make sure the site has strong security features to keep your money and information safe. See how your coins are stored. Cold storage means your coins are stored offline, which prevents hackers from being able to get to them.

  • Types of coins
    Do you already know what coins you want to trade/invest in? Make sure the platform you choose supports that currency. Popular crypto like Bitcoin, Ethereum, and Litecoin are available on just about all sites. But the smaller coins won't be available everywhere.

  • Fees
    Most crypto exchanges charge a fee per trade. If you plan to actively trade, you may want to pick a site with lower fees. If you're just buying and holding, it won't matter as much.

  • Ability to withdraw
    This is important if you want to be able to withdraw your coins and actually use them. If so, look for an exchange combined with crypto wallet. If you're investing through a broker (like Robinhood or Webull), you won't be able to withdraw into a coin wallet.

  • Ease of use
    Beginners will want to look for a platform with a simple user interface. More experienced investors will want a more advanced platform and extra features.

How to Invest in Bitcoin

Investing in Bitcoin for the first time may seem daunting, but the process is actually very simple.

The first step is to choose a cryptocurrency exchange. Beginners may want to go with an easy to use option like Coinbase, even if it's a little more expensive. Gemini and eToro are also good options for new investors.

Once you've signed up and verified your identity, a process that varies slightly between exchanges, you'll be able to fund your account with fiat currency. Then all that's left is to buy Bitcoin, which can usually be done via a simple 'buy' or 'order' button.

The Bitcoin will be transferred to your account, and you'll be a successful Bitcoin investor.

How to Deposit USD to Buy Bitcoin

When it comes to funding your account for Bitcoin purchases, you have a number of options. Not all of them are available on every exchange, and the fees they charge may vary.

  • ACH Transfer: Before you can transfer funds, you'll need to verify your bank account, which can be done through exchange apps or desktop websites. Once your account is connected, you can deposit USD to purchase Bitcoin. It may take 3-5 business days for your funds to become available.

  • Wire Transfer: The process for wire transfers is nearly the same as ACH transfers. You connect a bank account to your exchange, then select wire transfer to initiate a deposit. Funds wired before 1:00pm PT will be available the same day; funds wired afterwards will become available the next business day.

  • Debit or Credit Card: Some exchanges will allow you to deposit via debit or credit card. Those that do will request your card and personal information to initiate a deposit. It's worth noting that some banks may charge additional fees for credit card deposits.

Cryptocurrency Exchanges vs Cryptocurrency Wallets

If you've been learning about investing in crypto, chances are you've come across the terms 'cryptocurrency exchange' and 'cryptocurrency wallet,' and you may have wondered how they differ.

  • Exchanges are platforms to buy, sell, and trade cryptocurrency. They may offer a storage service to users who trade on them, but storage isn't their main function.

  • Wallets, on the other hand, typically offer storage only. Their whole purpose is keeping your crypto safe. And since there is no such thing as a crypto bank account, your only real choices are putting it in a wallet or leaving it on the exchange.

    While some exchanges are insured, unless you're using an interest account or staking, best practices dictate that users keep their crypto in a wallet they personally control, because exchanges are very appealing targets for hackers and thieves.

There are two main kinds of wallets: 'hot,' or digital wallets, and 'cold,' physical wallets.

  • Hot wallets are widely available online, and are connected to the internet. They generally accept more cryptocurrencies, but are less secure.

  • Cold wallets, which typically resemble USBs, are not connected to the internet, are more secure, but typically support fewer currencies.

Bottom Line

Investing in cryptocurrency may be all the rage right now, but make sure it's the right investment for you. Cryptos tend to be extremely volatile, so understand the risks.

To have a happy investment experience, pick the right platform for your needs. Don't only consider the fee. Pick a platform with features you want and an interface you're comfortable with.

References

  1. ^ Coinbase pricing and fees disclosures, Retrieved 2/1/2021
  2. ^ eToro Trading Fees, Retrieved 2/1/2021
  3. ^ Gemini Mobile Fee Schedule, Retrieved 2/1/2021
  4. ^ How trading fees work on Kraken, Retrieved 2/1/2021
  5. ^ Binance Fee Structure, Retrieved 2/1/2021
  6. ^ iTrustCapital Fees, Retrieved 2/1/2021
  7. ^ Coinmama Fees & Charges, Retrieved 2/1/2021

Anna G is a content manager at CreditDonkey, a personal finance comparison and reviews website. Write to Anna G at anna@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

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