Crypto exchange is a brokerage business that allows clients to trade cryptocurrencies. They typically do it in forex-style pair trading, accepting orders for buy and sell. Sometimes they offer other crypto services, like buying, transferring cryptocurrency, staking, or liquidity pools, but some of them, do not allow withdrawals, so make sure that you always check all the services that a crypto exchange provides.
No single exchange provides all the solutions
Typically, to trade, you need to buy cryptocurrency. So, the first step is to exchange your fiat money (dollars, euros) for crypto. Then you need to deposit funds on the crypto exchange. Then comes the trading (watch out for the trading fees). After that, you will want to withdraw your funds (again, mind the fees) and maybe perform additional investment activities (staking, liquidity pool, savings, etc). No single exchange provides all the services. Those who provide some of the services can vastly differ from others in terms of fees. One exchange could be great for trading, but bad for staking. Some exchanges offer low trading fees, but exact harsh withdrawal conditions.
Do your homework
Therefore it is very important when looking for the most reliable cryptocurrency exchanges to do your own research. Is the crypto exchange real, do they offer transparency? Can you reach their support? Is there a legal address or another way to contact them? Do they have a social media presence? What are the customer reviews, what’s their reputation, do they run KYC (know your customer) protocols? How easy is it to register (you want to aim for higher security/more complex register and verification procedures)? Do they offer crypto buying and selling? What is the withdrawal procedure? What are the trading pairs offered? What kind of fees do they collect - do they have Maker and Taker fees, do they calculate fees based on the ask-bid spread?
Beware of the scammers
Make sure not to fall prey to scammers, as many fake exchanges will use celebrity endorsements, promises of extraordinary returns on investments. A common technique is to name fake crypto exchanges after legitimate financial trading platforms. Another scammer approach is to lure you in using typosquatting. They rely on accidental typos on domain names. For example, make sure you never misspell the URL of your crypto exchange, as a typo can take you to the fake website made to look like the real thing. You can always check with ScammerWatch.com for the latest news and updates.
Coinbase - Best for beginners
Coinbase is year after year quoted as the best for beginners. Not only do they feature an easy-to-use interface, but they have strong security and educational platform that rewards users for learning about crypto. They had extra high fees, now they changed it, and they will keep changing it, which can be an inconvenience. They use a maker/taker fees model of 0.5% per trade, but there are additional flat fees for deposit and withdrawal.
Binance - Best overall
Binance is the giant of the market. As such they offer one of the lowest fees in the industry. The basic trading fee is 0.1% but considering they have 10 VIP levels and different rates for various activities (spot trading, futures trading, etc), they get even lower if you are a maker with a large trade volume behind you. Binance offers a simplified trade platform for beginners as well as a myriad of options for advanced users. The biggest disadvantage is the fact that due to disputes with US regulators, Binance is available to US-based users only through the Binance.US platform which doesn’t offer as many options as the main platform.
KuCoin - Widest library of altcoins
KuCoin earned its place in the top list of reliable exchanges by offering more than 400 tradeable coins with starting fees of 0.1% for makers and takers. Fees can be lowered further not only by volumes of trade but also by paying with KuCoin’s proprietary stablecoin. KuCoin features automated and margin-based trading, staking, airdrop awards, and more interesting activities from the rich decentralized finance (DeFi) spectrum. They aren’t exactly beginner-friendly, especially because trading relies on stablecoins. If you want to deposit funds, it needs to be transferred from your wallet, with 3rd party and P2P options which are neither safe nor cheap.
Kraken - Oldie but goodie
High-security ratings seem to come with the territory of old, gritty, industry veterans, and Kraken is one of the oldest crypto exchanges operating in the US due to wikipedia. Reputation is the king in the world of crypto exchanges, and Kraken offers stability and tradition that shouts ‘reliable’. They offer a sweet range of coins, sophisticated trading features, but they could come across as too complex for beginners.
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