What are crypto exchanges?
A crypto exchange is a marketplace where you can buy and sell cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH) or Dogecoin (DOGE). Cryptocurrency exchanges work a lot like other trading platforms.
If you're interested in buying cryptocurrency, you need to open an account with a crypto exchange. You'll be able to purchase crypto with fiat currency (think USD) via your bank account with a wire transfer or ACH, credit card or debit card.
Crypto exchanges provide you with accounts where you'll keep your digital currency, allowing you to buy, sell, stake and speculate in the crypto market and NFT space as well as purchase digital assets. Users can also deposit their own crypto assets to trade for others, which is known as crypto-to-crypto spot trading.
Where the crypto is kept
The digital currency you purchase will then be kept in a crypto wallet. You'll need to pick one that supports the different cryptocurrencies you choose to purchase. Note that dedicated crypto and bitcoin exchanges will allow you to withdraw your crypto funds and transfer them to another wallet of your choice but others, especially those that focus on other assets like stocks and ETFs --- including Robinhood and eToro --- only let you purchase the crypto but not transfer it out of their web wallets.
Leading crypto exchanges typically hold user funds in cold storage to ensure the safety of assets. Most crypto trading platforms are known as centralized exchanges, which function as a brokerage, but there are also decentralized options.
Crypto exchange platform fees
You pay two types of fees when you buy and sell crypto: exchange fees and network fees.
Exchange fees include trading fees (also called transaction fees or maker/taker fees), which indicate whether a crypto order provides liquidity to the market, deposit fees (usually charged via credit card or Paypal), account fees, usually charged monthly, and withdrawal fees, charged when withdrawing crypto or fiat currencies.
Network fees are paid to miners, who process and secure transactions on the blockchain. Users on decentralized exchanges generally have to pay the network fees themselves, as there is no third party between them and the miners.
Every crypto exchange has its own registration and setup process. The process generally starts by asking for personal information, and while some may let you open an account without verifying your identity, others will require you undergo an extensive KYC process to comply with government regulations.
Choosing the best cryptocurrency exchange for you
Determining the best cryptocurrency exchanges can be intimidating and will depend on the currencies you're looking to purchase. Some features to consider are trading volumes and trading pairs, availability of educational content, mobile apps with a user-friendly interface, two-factor authentication and quality customer support, as well as liquidity aggregation, or specific altcoins and stablecoins you would like to purchase.
Best crypto exchanges
Best crypto exchanges for Stacks
To mint an NFT on Gamma.io, the leading NFT marketplace on Stacks, you'll need to first set up a wallet and fund it with $STX. $STX is currently available for purchase on exchanges such as OKCoin, KuCoin, and Gate.io. For many exchanges, you'll have to go through a KYC process in order to purchase crypto. Alternatively, you can purchase Bitcoin via peer-to-peer services like Bisq, then exchange-trade your $BTC for $STX via KuCoin.
Popular crypto exchanges
Gemini was one of the first major exchanges and remains one of the largest by assets in the charts. It supports most major cryptocurrencies, has decent support and engagement, and if you qualify, pays competitive interest rates on assets. It also supports recurring buys and dynamic price alerts, allows you to download account statements, and enables crypto withdrawals to only go to approved addresses.
Crypto.com has a wide selection cryptocurrencies, with over 250. The exchange is ranked first in the Cybersecurity Ranking and CERtification Platform's top 100 exchanges by cybersecurity rating. It employs various techniques to keep its users' cryptos secure on its trading platform, including cold storage, regulated custodian bank accounts for fiat currencies, and multi-factor authentication. It has also successfully completed several hack tests, and over the years, has proved to be resistant to hackers. Other features include non-custodial DeFi wallet, margin trading and crypto loans.
Kraken offers a good selection of coins and tokens to invest in, and also allows margin trading and crypto staking, and has low fees. It is one of the few platforms to allow you to trade DOGE coins and other riskier tokens. Note that fewer coins will be offered to US customers than international ones, as US states have various regulations (as an example, New York residents are not eligible to stake ADA, ETH, XTM or ATOM).
Coinbase is a user-friendly crypto exchange, that is well suited for beginners despite its complex fee structure. It has a wide selection of cryptocurrencies, provides lots of educational resources and has strong security features. Users can currently purchase over 30 cryptocurrencies including Bitcoin, Ether and Litecoin (LTC). Features include user-controlled storage, stablecoins, staking, trading tools, Coinbase Earn rewards and Coinbase Pro advanced account for advanced crypto traders. Crypto investors who store their assets in the account can also earn APY.
Binance isn't as easy to use as other exchanges, but when it comes to cryptocurrency trading, it is one of the most robust platforms. On Binance, you can purchase cryptos such as Cardano (ADA) and Neo or Binance's own stablecoin, BNB, and over 350 other currencies. Some other features include crypto savings accounts, loans, margin trading and liquidity swaps. Binance.com and Binance.us don't offer the same cryptocurrencies, with .com having more choice.
Bisq is the decentralized exchange that best follows the ethos of Bitcoin and facilitates peer-to-peer trading by maintaining an open-source platform that is completely decentralized without limiting currency support. The project is open-source and is funded by personal savings and donations from its community of users. No third parties or personal information are required to trade on the platform. Decentralized exchanges don't typically support as many digital assets (including altcoins like ADA, XRP and DOGE) and fiat currencies. Both parties have complete control over their funds during the trading process, and the security of the decentralized platform is enhanced by security features such as multisignature and a security deposit system.
Cash.app is one of the easiest platforms to buy Bitcoin on. You can lock prices immediately and withdraw quickly, as well as make and receive mobile payments. The downside is that there is no insurance coverage from the FDIC unlike Coinbase and no other cryptos are available, so you can only trade Bitcoin.