According to one recent estimate, there are currently around 1,500 cryptocurrency exchanges up and running globally, which means you’re going to have to take a while to research them and narrow down your options.
To get started, it helps to know what to look for in an exchange platform, and so we’ve come up with a basic list of criteria you’ll need to pay attention to. One of the most important things for every user should be the exchange’s security features and its trustworthiness, as you’ll want to ensure your funds don’t just suddenly disappear.
In addition, you’ll need to consider the liquidity available on an exchange platform, its fees and costs, the tokens it supports, acceptable payment methods, its user interface, user reviews, and, finally, what kinds of trading features it offers.
So, let’s review this list and try to understand what you’re looking for in a crypto exchange.
Security
Although crypto exchanges aren’t banks, that doesn’t mean they don’t deal with significant sums of value. Some of the world’s biggest crypto platforms – such as Binance and Coinbase, hold billions of dollars worth of cryptocurrencies, and this puts them firmly in the crosshairs of some of the world’s most sophisticated and determined hackers.
This is why crypto exchange platforms need to implement iron-clad security measures as a matter of course. At a minimum, users need to look for exchanges with two-factor authentication or 2FA, which provides an additional layer of security for user accounts. With 2FA, you cannot log in just by entering your email and password alone – you’ll also be required to enter a security code delivered via SMS or some other means. This ensures that even if your email is hacked, your funds on the exchange cannot be withdrawn.
You’ll also want to look at how the exchange protects its funds. The industry standard for most exchanges is to use cold storage, which means that the bulk of their crypto is not held in so-called hot wallets with internet access, but rather disconnected wallets.
You should also look to see if the exchange advertises compliance with any regulations, as this suggests a higher standard in terms of security practices.
When it comes to security, one of the most highly regarded exchanges is Binance, which implements both platform-based measures like cold storage and data encryption, together with user-level controls like 2FA IP and wallet address whitelisting.
Another platform noted for its strong security is VALR, which is among the most regulated of crypto platforms in terms of KYC, AML, and CTF rules. It’s notable for implementing its own AML & CTF Compliance Program, underscoring its commitment to detecting and preventing illicit financial activities.
User-Friendly Interface
Strong security is always nice to have, but it can be a bit pointless if the platform’s UI is so confusing that you don’t even know where to get started in buying any crypto assets. Financial asset trading can be notoriously complex, and some exchanges are so enthusiastic about adding more trading features that they quickly become very confusing to anyone but professional traders.
As a rule, a minimalist approach that keeps the dashboard as straightforward as possible is always best. At the same time, you’ll also want your platform of choice to provide access to educational resources, so you can learn the ins and outs of its more advanced features and functionality.
One of the best platforms in this regard is StormGain, a European-based exchange platform that’s designed to be as accessible as possible. It begins with only requiring users to enter their email address to sign up, and it boasts a simple, easy-to-understand design that makes for an intuitive trading experience.
KuCoin is another strong contender in terms of simplicity, with a sleek yet minimalist interface presented to users, although with a few clicks, users can go much deeper when they get comfortable, thanks to an array of options for customizing price charts.
Supported Tokens
If you’re looking to buy or trade anything beyond the top tokens, you’ll want to find an exchange platform with extensive token support. As a start, it’s a good idea to confirm that the better-known cryptocurrencies, like Bitcoin, Ethereum, and XRP are all present, along with a good selection of lesser-known altcoins.
You’ll also want to confirm that it lists the top stablecoins, such as USDT and USDC, which are invaluable for traders wanting to quickly exit a position without going through the hassle of converting their funds to fiat. After that, you’ll also need to look at the available trading pairs – the more pairs on offer, the more you’ll save, as you won’t have to constantly be buying stablecoins, BTC, or ETH in order to trade one lesser-known asset for another.
Traders who’re looking for all kinds of obscure digital assets would do well to consider a platform such as MEXC, which stands apart from all other major exchange platforms with more than 2,900 token listings. That’s far more than anyone else, with even Binance, the world’s biggest exchange by trading volume, only counting just over 500 tokens.
Platform and Transaction Fees
While fees may not be so important if you’re only intending to buy crypto now and again to hold it for the long term, they’re a big concern for everyone else. All the more so if you plan on trading crypto on a day-to-day basis.
In general, there are three kinds of fees, including standard transaction fees applied to every trade (generally a percentage of the translation), withdrawal fees that are charged every time you withdraw your crypto to your wallet, and deposit fees.
It’s hard to beat VALR in terms of its low fees, due to its commitment to fair and transparent pricing. Its deposit fees vary based on the payment method, but they can be incredibly low, with just 0.13% charged on USD and EUR wire transfers, and free deposits for any crypto sent to a VARL wallet. While withdrawal fees for crypto are variable, VALR beats many other platforms on the vast majority of popular digital assets, and it offers up to 30 Free withdrawals per month when withdrawing fiat.
In addition, its transaction fees are super low too, with just a 0.01% maker and taker fee applied to all fiat to crypto swaps, and 0% maker fees on all other traders. For takers, it charges between 0.01% and 0.005% for all other trades, such as futures and crypto-to-crypto spot pairs.
Another extremely competitive exchange in terms of fees is Kraken, which charges a 0.16% maker fee and a 0.26% taker fee. There’s also Bybit, which has no maker fee and a taker fee of just 0.075%.
Payment Methods
If convenience is a priority, then it’s essential to look at the supported payment methods offered by an exchange – both for deposits and withdrawals.
Ideally, you’ll want to find an exchange that supports basic bank transfers to your domestic bank, so you can deposit funds with your card or your banking app. Alternatively, those that support popular payment methods like PayPal, Google Pay, and Apple Pay can also be extremely convenient. Also, check to see if they support a basic wire transfer.
As another consideration, you’ll need to check which fiat currencies the exchange supports. While most exchanges are happy to accept USD, it may be much harder to find one that supports your local currency, and if it doesn’t, that could mean paying a higher exchange rate as your funds would have to be exchanged to USD first of all.
Fortunately, many countries have local exchanges that support their fiat currencies. For instance, VALR in South Africa offers support for the South African rand, WazirX accepts rupees, Pintu allows Indonesian rupiah deposits, while Bitkub in Thailand supports transactions in baht.
Liquidity & Volume
If you’re planning on trading large amounts of less common crypto tokens, you’ll have to find an exchange that has the desired liquidity so as to keep slippage to a minimum.
To do this, you’ll have to study metrics on websites like Coinmarketcap and CoinGecko to see what kind of transaction volumes an exchange handles each day, as those that have more activity generally have higher amounts of liquidity available. You can also consider its orderbook depth – the deeper it is, the better the buying and selling opportunities for traders.
Binance, Coinbase, KuCoin, Kraken, Gate.io, and Bybit are among the top exchanges in terms of daily trade volume, and as such, they generally offer deep liquidity for all but the most obscure tokens, making them a great choice for many traders.
Customer Support & Reputation
A good customer support team combined with solid user reviews suggests that an exchange is dependable and secure.
One of the most important things to do when choosing an exchange is to see what kind of support methods it offers, such as live chat, email, telephone, and so on. The ability to talk to a human instantly can be a major help when problems arise, and a significant source of frustration if it’s lacking.
Most users agree that Coinbase, the number one U.S.-based exchange, stands apart from the crowd with its extensive customer support options, which extend to phone support during business hours, 24/7 live chat, and various social media channels that are also always-on. It also offers an extensive help center with hundreds of articles for solving common issues.
Gemini is well regarded by high-volume traders as they can obtain priority support services from its specialist staff, around the clock, while Binance is a good option for those needing support in their local language.
Advanced Trading Features
Once you’re ready to progress from basic token swaps, buying, selling and hodling, you’ll do well to consider an exchange that offers more advanced trading features, such as futures, perpetuals and margin trading, as well as DeFi features.
Margin trading is a great way to amplify your trading profits by using leverage, and many exchanges offer this. For instance, Coinbase, Kucoin, and VALR provide up to 5x leverage, while specialist platforms like BTCC and MEXC offer up to 500x and 300x leverage, respectively.
Another way to maximize profits is through futures trading, and some of the best platforms in this regard include Binance, PrimeXBT, and OKX.
Finally, to maximize your crypto earnings, you’ll likely want to consider delving into DeFi services that allow you to stake your crypto tokens or lend them out in order to earn interest. DeFi was once rather inaccessible, requiring users to get to know the world of decentralized Web3 applications, but these days a number of exchange platforms provide simplified access to such services.
Almost all of the big crypto platforms offer basic staking services for a range of popular proof-of-stake cryptocurrencies like ETH, SOL, and XTZ, and some go even further. For instance, on VALR, it’s possible to engage in liquid restaking with Solana, where those who stake SOL receive alternative tokens for each one they deposit, enabling them to maintain liquidity.
VALR also offers access to various lending pools, allowing users to earn interest on a range of popular crypto tokens.
Choosing the Right Exchange
Now that you’re aware of the most important factors to consider when choosing an exchange, you’ll likely have to work out which ones you should prioritize. At the end of the day, there are dozens of great crypto exchange platforms out there.
Choosing the one that best fits your needs is essentially a balancing act that involves weighing the need for security with the specific features you require, whether that’s advanced trading features, responsive customer support, low fees, an easy-to-use interface, and an exhaustive list of tokens
First and foremost, understand what your priorities are and find an exchange that can meet them, then be sure to check what kinds of security measures it has in place, and decide whether or not these will meet your expectations. By taking the time to consider what differentiates each crypto exchange, you’ll be able to find a platform that’s more than able to cater to your needs.
