Just a decade ago, if you wanted cryptocurrency, you’d have to mine it yourself or seek sellers in different forums. Fast-forward, and you have multiple platforms that allow you to buy and sell cryptocurrencies and other digital assets without much hassle. These platforms are called crypto exchanges or cryptocurrency exchanges.
They’re like the stock market for cryptocurrencies. This market never sleeps. Prices can change in an instant.
Are you curious about which one is the best in 2024? We’ll reveal the top five cryptocurrency exchanges in this article after we cover the fundamentals and provide you with rich context to identify the best exchange.
A crypto exchange is a platform that lets investors and buyers sell or buy cryptocurrencies like Bitcoin or Ethereum. These exchanges are available on internet browsers or mobile applications with several investing and trading features.
A cryptocurrency exchange charges a fee to facilitate different cryptocurrency trading, including margin trading, future and option trading, and lending. The exchanges vary in terms of the level of security and fees they charge.
Before crypto exchanges, people mined cryptocurrencies or traded them on forums, where the process wasn’t as formalized as it is currently. When cryptocurrency exchanges arose, the process became more standardized.
However, trading cryptocurrencies on an exchange presents a not-small amount of risk. If the exchange fails or gets hacked, you might lose your assets. These exchanges might not be registered or properly regulated by the state or federal government.
Yes, but they’re subject to regulations. Crypto exchanges qualify as money service businesses (MSBs); they are required to register with the US Treasury and comply with the Bank Secrecy Act. The IRS views cryptocurrency as property and puts capital gain taxes on them.
Note: G2 does not provide legal advice. Please consult with your state’s treasury or other authorities to check if a crypto exchange is legal in your region.
On a cryptocurrency exchange, you can buy cryptocurrency with fiat currency like US dollars or convert those dollars into stablecoins like Tether (USDT). You can use stablecoins to purchase the cryptocurrencies that hold your interest.
Since Stablecoins are usually attached to fiat currencies, their value fluctuates with them. Crypto traders typically use the peer-to-peer (P2P) network to get USDT from a seller by transferring fiat currency directly into the seller’s account. This minimizes or eliminates transaction costs in most cases.
You can use USDT to buy any cryptocurrency in exchange. Bigger exchanges have a broader range of cryptocurrencies to offer.
If you want to sell, you can sell cryptocurrencies to get stablecoins of the same value and then convert stablecoins into cash through P2P. You can also directly sell crypto and get fiat currency in your account through exchanges. However, this might include a sizable transaction cost.
When you submit a buy or sell order, it’s added to the order book along with others. The exchange charges a fee for executing these trades, which is comparatively higher than what stock broking platforms charge in traditional markets.
You can use cryptocurrency exchanges 24/7, unlike stock exchanges, which are operational during set days and hours of the week.
A crypto broker intermediates between a cryptocurrency buyer or seller and the market. Some work independently, others work with firms with a fixed set of charges. They simplify the trading process while delivering personalized service.
On the other hand, a crypto exchange is an online platform where crypto buyers and sellers trade cryptocurrencies. These platforms allow you to sell digital assets at your prices and accept expenses at which you want to purchase cryptocurrencies.
These crypto exchanges charge a fee for trading services to buyers and sellers.
Typically, you’ll be working with one of three crypto exchanges: centralized exchange (CEX), decentralized exchange (DEX), and hybrid exchange.
CEXs run on one centralized server to facilitate matching buyers and sellers for trading. Usually, their interface is easy to use, making it simpler for new users to start crypto trading.
Although CEXs follow high governance standards, they’re vulnerable to attacks or security breaches. Some might also suffer from poor liquidity, which results in much slower transaction times with higher fees.
On the flip side, centralized exchanges seem more government-friendly since they comply with anti-money laundering (AML) laws and require users to provide their know-your-customer (KYC) details. However, exchanges also have less privacy because they may be required to share user details during regulatory scrutiny.
Decentralized crypto exchanges don’t rely on a central authority to facilitate trades. Instead, DEXs use smart contracts and blockchain technology to enable peer-to-peer trading. Smart contracts allow private transactions to go through self-executing bits of code on a blockchain.
As with most financial matters, some pros and cons apply to decentralized exchanges. They offer more privacy in transactions with a lower trading fee. However, no trusted intermediaries are there to resolve tricky conflicts. These exchanges might also face liquidity issues.
A hybrid exchange combines the best aspects of CEX and DEX in one exchange. Users trade cryptocurrencies and other assets on a centralized platform and benefit from increased security added through decentralized trading features.
These exchanges typically process transactions faster and at a much lower cost. They offer diverse currency pairs and more control over funds.
Cryptocurrency exchanges let you trade for other assets and traditional currencies. They offer features like order execution, secure storage solutions, and real-time market data to help traders discover price and market liquidity.
To be included in the top crypto exchanges list, a platform must:
These are the leading crypto exchanges from G2’s Spring 2024 Grid® Report. Some reviews may have been edited for clarity.
OKX allows users to trade various digital assets through a variety of trading options, including spot and derivatives trading. The platform supports staking and lending so users earn passive income from their holdings.
“I have used many exchanges, such as Binance, Gate.io, FTX, and Remitano. But for me, OKX is still the best. It offers fast order execution and an easy-to-use interface.”
- OKX Review, Sơn Q.
“I think mobile websites could be simpler than they are now. OKX doesn’t have options to directly withdraw funds to the bank in my country .”
- OKX Review, Onur A.
Binance is well-known for its low trading fees and high liquidity, making it a preferred choice for many traders. The platform also features advanced trading tools and ensure robust security with multi-tier and multi-cluster system architecture.
“The main and key feature of Binance is easy deposit and withdrawal options. It takes a few minutes to get your money through a very secure transaction process. Also, it is very easy to trade in different digital currencies with many different trade methods and options.”
- Binance Review, Sayed S.
“The presence of some scammers in the P2P feature. I think it needs more strictness from the Binance administration.”
- Binance Review, Salim A.
Gate.io supports various digital assets and offers spot trading, margin trading, and other trading options. The platform offers an extensive selection of coins and tokens that cater to many users' trading preferences.
“Both Gate.io's website and application are very easy to navigate and have several options for trading and exchanging cryptocurrencies, including P2P trading.
I additionally like that Gate.io allows me to receive notifications through the application about new cryptocurrencies being introduced to the platform; I usually receive a notification around ten minutes before. The application also alerts me of any news or updates surrounding cryptocurrencies on the platform.”
- Gate.io Review, Callum B.
“Their customer care service is the only part they lack badly. There is no live support or calling option, which results in very high response time, specifically in emergency cases it affects the most.”
- Gate.io Review, Archit S.
eToro stands out for its social trading feature that users can follow to copy the trades of experienced investors. It offers educational resources to help users improve their trading skills with a demo account for practice.
“I love eToro for its social vibe, connecting me with traders from different backgrounds. The cool part? Copying from pros who use their own money..”
- eToro Review, Leonidas L.
“It's not for expert traders. It's more simple. Another problem is that it doesn't support wire transfers to Colombian banks to get your money back, so you only have to receive the money through Paypal or your credit/debit card.”
- eToro Review, Ricardo José Ochoa R.
Coinbase Exchange supports many digital currencies and offers various trading pairs. It’s highly secure and employs strong encryption and insurance for digital assets stored on its servers. You can easily access it via mobile app and trade on the go.
“Easy user interface, secure wallet system, and language support.”
- Coinbase Exchange Review, Sefa O.
“I don't like that they haven't had many options for staking and earning interest on crypto. They have a few, but I have had to use other platforms for that.”
- Coinbase Exchange Review, David C.
Ideally, when choosing an exchange, you should consider security, controls, transaction fees, liquidity, and various cryptocurrencies. You’ll still face the market's ups and downs, but with proper effort and curiosity, you’ll find the best exchange to fulfill your key requirements.
Interested in starting crypto trading? Check out the best cryptocurrency wallets and understand how they interact with blockchain platforms.
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