Best Cryptocurrency Exchanges in 2022
There were limited ways to buy these digital assets at the onset of the cryptocurrency(crypto) craze. However, as time went by, crypto platforms caught up, spurred by the interest in crypto.
Currently, there are more than 500 crypto providers who support spot trading.
We explore the top crypto platforms, explain how to use them, what to consider before settling on a crypto exchange, and much more.
Top Cryptocurrency Exchanges in 2022
Choosing a crypto platform that’s a perfect fit can be a long and tedious task. We’ve compiled a list of top, beginner-friendly platforms to help you get started easily.
What Is a Cryptocurrency Exchange?
Like an e-commerce marketplace, the exchange allows you to buy cryptocurrency using fiat currencies such as the USD, EUR, and GBP. Other exchanges allow the purchase of cryptos using mainstream coins like Bitcoin or stable coins like Tether.
Since cryptos are virtual digital assets, a digital wallet is needed for storage. Most exchanges offer crypto wallets that are associated with your exchange account.
How Do I Use a Cryptocurrency Exchange?
After finding a suitable crypto platform, the next step is to open an account. Despite the user interface and features differences, many exchanges will generally have similar steps to buy cryptocurrencies. Here are the steps you will need to complete to buy cryptos.
Go to the official exchange website and sign up.
Confirm your email and proceed with Know Your Customer (KYC) and Anti Money Laundering verification. Provide proof of identity using your ID.
After ID verification, deposit funds to the exchange by linking your preferred payment method.
Using the ‘Buy’ section, search for the digital asset you wish to purchase. During the search, you can use ticker symbols, e.g., BTC for Bitcoin.
Enter the amount you want to spend. Confirm the transaction details and execute the purchase.
Locate your wallet and confirm the transaction as successful.
What Should I Look for in a Cryptocurrency Exchange?
As an investor, choosing the correct crypto exchange is critical. You have to consider various factors before buying or trading using an exchange.
Payment method accepted: Exchanges provide different forms of payment. Common methods include bank transfers, e-wallets, credit and debit cards. Methods such as gift cards may be hard to find.
Find an exchange that provides you with your preferred funding option. You’ll need to link your funding method and deposit fiat currencies to your account.
Not all coins are listed on exchanges. First, check whether the coin you wish to buy is available on an exchange.
Geographical restrictions: Exchanges don’t serve all countries globally. For instance, Coinbase serves about 100 countries. You’ll therefore need to check if the exchange is available in your jurisdiction.
Fees: Exchanges have different economic models, and their fees vary. Fees also depend on your payment option, with bank transfers having cheaper charges. Check the fee schedule on exchanges first so that fees do not suppress your final profits.
Design and ease of use: A good exchange will be easy to use and navigate. Core processes such as depositing, buying, and selling should be simple. You’ll need to focus on buying the crypto instead of figuring out how the site works.
Security features: Ensure to confirm the level of security of exchange before signing up. Some of the features you can look out for include 2-factor authentication(2FA), cold offline storage, and encryption.
Reputation: When starting, ensure you sign up to renowned exchanges. You’ll be sure of good services and a proper trading engine that will enable you to trade. Examples of reputable platforms include Coinbase and Binance.
Customer support: An exchange that offers good customer support will promptly help you where you are stuck.
Regulated exchanges: Use regulated crypto platforms that operate within the law's guidelines. This will ensure the protection of your funds, assets, and personal details.
Do I Have To Verify My Account on an Exchange?
Yes, you’ll have to verify your account when opening a new one on the exchange. Many jurisdictions and crypto providers have instituted KYC guidelines to verify the details of the customers. This is in line with AML regulations which are applicable globally.
Apart from money laundering, exchanges need to verify IDs to guarantee that their customers are not funding terrorism activities. In most cases, the exchange will ask for your ID (Passport, driving license, nation ID), a selfie of you holding your ID, and proof of address.
Are Cryptocurrency Exchanges Secure?
Crypto exchanges have varying levels of security. Since they operate online, exchanges are susceptible to malicious attacks. It's not recommended to hold more than a small number of cryptocurrencies at a time on an exchange.
Substantial amounts of any cryptocurrency should always be transferred to an external wallet that is safer. Take the following steps to enhance the safety of your account:
Use strong passwords
Never reuse passwords from other websites
Never access your exchange accounts on public wifi
Never share your private keys
Use an external crypto wallet
How Fast Are Transactions on Exchanges?
Transactions on exchanges are near-instant, especially for market orders. Once the order is fulfilled, the funds will appear in your account.
Transferring cryptocurrencies from one exchange varies from near-instantaneous to several hours, depending on the blockchain. For instance, You may have to wait more than 10 minutes for a Bitcoin transaction to finalize. However, Ethereum transactions are much faster, taking between 15 seconds to several minutes.
What Payment Methods Can I Use To Buy Cryptocurrency on Exchanges?
Most exchanges will accept bank transfers, credit, and debit cards as funding options. E-wallet options such as Neteller, Skrill, and Paypal are not widely adopted. Let’s look at the various funding options you can use on crypto exchanges.
Debit and credit card: These are widely accepted in most exchanges, especially Mastercard and VISA cards. Linking your card to your exchange account is easy. Fees for debit and credit card transfers are typically higher.
Bank transfer: This is a widely adopted form of funding accounts and is cheaper. Different countries have different modes of bank transfers to make it easy to transfer funds. For instance, Americans use ACH transfers while Europeans use SEPA.
Cryptocurrencies: You can buy one crypto using another. For instance, you can buy Bitcoin using Tether. This is only possible using crypto to crypto exchanges. This method of payment is also popular and cheap.
Paypal: Many people find it easy to use Paypal for online payments. However, Paypal is not as widely acceptable on exchanges as bank transfers.
Neteller and Skrill: Like Paypal, these e-wallets are available on some exchanges but are less common.
Do Exchanges Charge Fees for Buying and Selling Cryptocurrency?
Yes, exchanges charge fees. You can expect different types of fees, including transfer fees, transaction fees, and spot fees.
Transfer fees are charged when you deposit and withdraw funds from the exchange. These fees vary depending on the exchange. Transaction fees may come as fixed or dynamically tiered depending on the monthly trading activity of an account. On most exchanges, the fees reduce with higher amounts of transactions.
Always check the fee schedule on an exchange before engaging their service. Fees may range between 0.1 and 5% depending on the crypto provider, the funding option, and the amount you are spending. Bank transfers represent the cheapest way to purchase crypto because they are free or charged minimal fees.
Are There Fees for Transferring Coins in and Out of Exchanges?
Yes, there are fees when transferring cryptocurrencies. The charges are associated with a specific blockchain and are paid to miners in the blockchain.
Mining fees are incurred when cryptocurrency is transferred from one exchange or wallet to another. They are paid to the miners in a network and are no more than a couple of dollars.
Do I Need a Wallet To Use a Cryptocurrency Exchange?
No, the crypto exchange will usually provide a wallet associated with your account. However, we recommend transferring your assets to an external wallet for substantial amounts of cryptos. This is also prudent for inventors who don’t intend to trade their crypto assets soon.
Exchanges provide a single focus of attack for malicious hackers. If the exchange is hacked, you may lose all your crypto assets, and there may be no one to reimburse you for the losses. External wallets provide more security, especially cold wallets.
What Are the Other Platforms That I Can Use To Buy and Sell Cryptocurrency?
Apart from exchanges, you can use crypto brokers, Peer-to-peer marketplaces (P2P), and Contract for Differences (CFDs) trading platforms.
P2P platforms are non-custodial platforms that match buyers and sellers. Sellers indicate the crypto they are selling and the number and amounts. The buyer can browse and check for the best deal.
Brokerages help you buy and sell crypto and charge you a markup on the prices for their services. Some offer derivative products that you can use to trade crypto without owning the underlying asset.
Common examples of derivative products include margin trading, which allows users to leverage, and futures trading.
Please note that some countries have banned derivative products. This is because they are highly speculative, and crypto's volatility makes it a risky venture. Examples of countries that have banned crypto derivatives include the US and the UK. Check your country’s regulations to check whether crypto derivatives are allowed.
Should I Use a Cryptocurrency Exchange?
Cryptocurrency exchanges provide a convenient way to buy and sell cryptocurrency. Leading crypto exchanges include Binance, Coinbase, Paybis, and CEX.io.
Some of the features that make exchanges good on-ramp platforms to crypto investments include:
Integration to different forms of payment
You own the underlying crypto asset
A variety of cryptocurrencies
You can transfer your digital assets to an external wallet
Security features such as 2FA