Choosing the right cryptocurrency exchange in 2021 can be complicated. If you want to trade cryptocurrency, invest in altcoins, or exchange cryptocurrency for fiat currency, then you’re going to need a reliable, trustworthy cryptocurrency exchange — but there are a few critical factors that you should consider before getting started.
If you’re interested in crypto margin trading, for example, you’ll likely be interested in robust, advanced trading features. Inversely, if you’re only focused on trading cryptocurrency for fiat currency (like USD), then you may find that a simple, streamlined, user-friendly crypto exchange is the best option.
This article will break down the top 5 cryptocurrency exchanges, providing guidance on the best, most secure exchanges for various trading preferences, geographic locations, and fee structures.
What To Consider When Choosing a Crypto Exchange
Before signing up with a cryptocurrency exchange and getting started, there are a few important factors that must be considered. The best cryptocurrency exchange for your needs will vary depending on your geographic location, the amount of crypto you want to trade, and the way in which you want to trade.
All cryptocurrency exchanges are fundamentally similar with regards to funding and trading. Users of cryptocurrency exchanges create an account, complete identity verification, fund their account with fiat currency or cryptocurrency, then proceed to trade and withdraw.
The key points of difference to consider when assessing cryptocurrency exchanges are:
Identification requirements: Reputable cryptocurrency exchanges are required to comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. When creating an account, crypto exchange users must provide identity documentation such as photo ID or proof of address. Geographic limitations: Some exchanges are available only in certain countries. US-based crypto traders, for example, may not be able to access certain exchanges due to US cryptocurrency regulation. If you’re in the US and are looking for a comprehensive guide to the best crypto exchanges for US-based traders, see our United States-specific crypto exchange guide here. Trade limits: Some exchanges may set limits or create tiered account levels depending on identity verification. Trading fees: Crypto exchanges charge fees to make money. Some exchanges charge a flat percentage of all trades, while others offer a “maker/taker“ model that offers different fees depending on the type or trade orders users make. Fiat currency support: Some crypto exchanges don’t support fiat currency, such as USD, EUR, or GBP and deal only in cryptocurrency. If you want to exchange cryptocurrency for USD, for example, you’ll need an exchange that supports fiat currency. Deposit & withdrawal methods: Exchanges that support fiat currency will offer multiple options for deposit and withdrawal, such as credit card, bank transfers, or wire transfer. Trading pairs: If you want to trade a specific cryptocurrency, it’s important to check whether the exchange you are considering currently lists it. Hacks and security: Hacks occur frequently in the cryptocurrency ecosystem. It’s important to select an exchange with a strong security track record. Reliable exchanges offer security features such as two-factor authentication. What are the Best Crypto Exchanges ?
The following 5 cryptocurrency exchanges are the best options online today, and are broken down by ease of use, fee structure, trading functionality, security, and trading pairs.
1. Coinbase: Best Crypto Exchange for New Crypto Traders
Coinbase is one of the most popular cryptocurrency exchanges, and is an ideal entry point for new traders or cryptocurrency investors new to the crypto ecosystem. Coinbase offers crypto traders and investors two options — Coinbase and Coinbase Pro.
Coinbase is primarily focused on making cryptocurrency purchases simple and easy to understand, and doesn’t flood users with complicated trading interfaces. The standard Coinbase platform functions as a simple brokerage and wallet, allowing users to buy or sell cryptocurrency for fiat currency or instantly exchange between different cryptocurrencies.
Coinbase Pro is a more complex trading tool aimed at users that want to access a more robust trading experience and provides the more complicated trading UI expected of a cryptocurrency exchange.
ID requirements: Coinbase requires a valid government-issued photo ID along with a selfie image for Coinbase ID verification Geographic limitations: Coinbase is available in over 100 countries, including the United States. Coinbase limits the available specific currency pairs, such as USDC, to certain countries. Trade limits: Coinbase doesn’t limit the amount of cryptocurrency that can be traded, but does place a daily withdrawal limit of $25,000 on most accounts. This can be increased by providing additional ID details. Trading fees: Coinbase and Coinbase Pro generally of 0.5% on most cryptocurrency purchases and sales. Specific regions incur charges a spread — debit card purchases in Canada and Australia, for example, incur an additional 3.99 percent fee. additional fees Fiat currency support: Coinbase supported fiat currencies include GBP, EUR, AUD, SG, CAD, and USD. Deposit & withdrawal methods: Coinbase deposit and withdrawal methods include Bank transfer (ACH), debit and credit card, wire transfers, SEPA and SWIFT transfers, and Payal. Supported cryptocurrencies: Coinbase supports 39+ cryptocurrencies, including BTC, ETH, BSV, BCH, EOS, and DASH, along with altcoins such as LINK, LOOM, and XRP. It’s important to note that Coinbase doesn’t list Tether (USDT) — instead, Coinbase lists the USDC USD-pegged stablecoin. Hacks and security: Coinbase has, notably, never suffered from a successful hack. The Coinbase platform is highly secure and offers a variety of robust 2FA security options. Coinbase also from sending cryptocurrency to verified scam cryptocurrency addresses. actively prevents users 2. Binance: Best Crypto Exchange for Altcoins & Pro Traders
Binance is one of the most widely-used cryptocurrency exchanges online, and is arguably one of the most feature-rich options available. Launched in 2017, Binance began as a crypto-only exchange focused on listing an extremely broad spectrum of cryptocurrencies, but added fiat currency support in 2019-2020.
The rich feature set offered by Binance makes it popular with traders seeking low-cap altcoins, margin trading, or more complex features such as exposure to liquidity pools or crypto-backed loans. The powerful, customizable trading UI offered by Binance makes it ideal for professional traders, while robust API access allows algorithmic traders to execute trades through third-party systems.
Binance can be somewhat daunting for new traders, but provides three separate trading UI options — basic, classic, and advanced, ensuring that all levels of experience are catered to.
ID requirements: Binance allows users to make unverified accounts without ID, but these accounts are limited to small withdrawal amounts and can trade, deposit, and withdraw only in cryptocurrency. Verification is based on a tiered system, with basic verification demanding photo ID and a selfie in order to unlock higher limits and fiat currency functionality. Geographic limitations: Unverified Binance accounts can be accessed from any country. Verified Binance accounts are available for over 100 countries, but it’s important to note that Binance international is not available to US-based traders. Instead, US-based traders must use Binance’s US trading platform, Binance.us Trade limits: Unverified Binance accounts are limited to 2 BTC of trades or withdrawals in a 24-hour period. Verified accounts are limited to 100 BTC in trades or withdrawals in a 24-hour period. Trading fees: Binance has a relatively based on a maker/taker model. Casual Binance users are subject to a 0.075% maker/taker fee, which can be discounted by holding BNB — Binance’s native cryptocurrency token. complex fee schedule Fiat currency support: Binance supports 15 major fiat currencies, including USD, EUR, GBP, CAD, AUD. Deposit & withdrawal methods: Binance offers an extremely broad range of deposit and withdrawal methods, including SEPA, bank transfer, wire transfer, Simplex, Banxa, and credit or debit card. Supported cryptocurrencies: Binance lists over 180 different cryptocurrencies across almost 600 trading pairs, making it one of the most comprehensive cryptocurrency exchanges online with regards to token listings. Hacks and security: As one of the most popular cryptocurrency exchanges online Binance experienced multiple hacks, including a that saw $40 million worth of cryptocurrency stolen from the exchange. Binance now incorporates multiple security features for users, as well as a “ 2019 hack ” fund that functions as an emergency insurance fund that compensates users in the event of a hack. SAFU 3. Crypto.com: Best Crypto Exchange for Ease of Use & Crypto Debit Cards
Crypto.com is focused primarily on accelerating cryptocurrency adoption, bridging the gap between fiat currency and cryptocurrency. Rather than delivering a “traditional” cryptocurrency exchange experience, Crypto.com is heavily aimed towards smartphone users and aims to make cryptocurrency trading as simple as traditional banking.
The biggest advantage offered by Crypto.com is the ease with which the platform integrates cryptocurrency into everyday life. Crypto.com offers users cryptocurrency-funded debit cards, which are available in a variety of tiers.
Crypto.com makes a spot exchange available to traders that offers impressive liquidity and competitive fee structures. Using Crypto.com, it’s possible to purchase, invest, or trade cryptocurrency, then spend crypto directly in everyday life using a Crypto.com debit card — a rare offering in the current regulatory environment.
ID requirements: Crypto.com adheres to a strict compliance process, which means Crypto.com verification requires government-issued photo ID, a selfie, and proof of address documentation. Geographic limitations: Crypto.com is available to traders in the EU, USA, Australian the UK, and specific Asian countries, but only makes Crypto.com Visa cards available to . select countries Trade limits: Crypto.com limits start at $5,000 USD in crypto purchases per week, which can be increased by purchasing and staking the Crypto.com MCO token. Trading fees: Crypto.com operates on a maker/taker fee model, with maker fees starting at 0.1% and taker fees starting at 0.16%. Trade fees are progressively lowered depending on trade volume. Debit or credit card purchases incur a fee of up to 3%. Fiat currency support: Crypto.com’s strict regulatory compliance allows it to support an extremely broad range of fiat currencies, which include: AUD, BGN, CAD, CHF, CZK, DKK, EUR, GBP, HKD, HRK, HUF, ILS, JPY, NOK, NZD, PLN, RON, SEK, SGD, USD, and ZAR. Deposit & withdrawal methods: Crypto.com offers deposits via bank transfer or credit/debit card, alongside bank transfer, SEPA, or wire transfer withdrawals to bank accounts. Supported cryptocurrencies: Crypto.com lists over 45 cryptocurrencies, but specific cryptocurrencies, such as STX, BNT, REN, SOL, and WTC are not available to users based in the United States. Hacks and security: Crypto.com has an excellent security track record and has never experienced a hack. The Crypto.com app and spot exchange both offer robust security features, 2FA, and asset insurance for up to $100 million in cold storage digital assets. 4. Bittrex: Best Crypto Exchange for Security
Bittrex is one of the longest-running cryptocurrency exchanges online, and was founded in Seattle in 2013 by three ex-Microsoft employees. Bittrex holds a reputation as the most secure cryptocurrency exchanges online, and hasn’t experienced a hack or lost customer funds since launch.
Bittrex, like Binance, was founded primarily as a crypto-only exchange, but offers USD fiat support for specific US states and several international countries for identity verified users. A major draw of Bittrex is the diverse range of cryptocurrencies listed by the platform, with a focus on promising new tokens and projects.
ID requirements: All Bittrex accounts must be verified with government-issued photo ID and a selfie photo. Geographic limitations: Bittrex is one of the most accessible crypto exchanges online, and is available to traders around the world apart from traders located in North Korea, Iran, Crimea, Syria, and Cuba. The high level of accessibility in the United States makes Bittrex popular with US-based traders. Trade limits: Basic verified accounts are limited to $3,000 per day, with ID verified accounts with 2FA enabled able to access up to 100 BTC per day. Bittrex also enforces aimed at minimizing market manipulation. several trading rules Trading fees: Bittrex keeps trading fees simple, offering a flat trading fee of 0.20% for both makers and takers. 30-day trading volume in excess of $50,000 USD and above unlocks discounted fees. Fiat currency support: Bittrex supports USD fiat currency only. Deposit & withdrawal methods: Bittrex deposits and withdrawals are executed via wide transfer or debit card transactions in specific US states. It’s important to note that Bittrex USD services are not available in the USA for users based in NV, NE, NY, CT, or VT. Supported cryptocurrencies: Bittrex lists hundreds of trading pairs, as well as leveraged options that allow traders to invest in 3x long or short tokens. Hacks and security: To date, Bittrex has never experienced a hack and makes robust security features such as 2FA mandatory for all users. 5 Uphold: Best Crypto Exchange for Diverse Investments
Uphold takes a different approach to cryptocurrency trading when compared to a “traditional” crypto exchange such as Binance or Coinbase. Rather than focus solely on cryptocurrency, Uphold provides multi-commodity functionality that allows users to invest in and trade crypto, precious metals, and fiat currencies.
The Uphold platform is centered on the Uphold smartphone app, and boasts commission-free trading. Notably, Uphold offers 0% fees on credit and debit card deposits, which makes it a highly attractive option for investors that want to quickly purchase crypto with a card without paying exorbitant fees.
The Uphold trade UI is not as complex as platforms aimed at professional traders, but the simple, streamlined interface makes it possible to quickly exchange fiat currency for 30 different cryptocurrencies and 4 precious metals, making it a suitable solution for retail or casual investors.
ID requirements: Uphold requires government-issued photo ID, a selfie image, and address validation Geographic limitations: Uphold is somewhat geographically limited, and provides debit/credit card funding to traders based in the UK, US, and EU. Individuals in can make Uphold accounts, but are limited in funding and withdrawal options. many other countries Trade limits: Uphold typically limits trade amounts depending on the type of asset traded, with many users placed on an initial limit of $500 per day that can be increased on application. Trading fees: Uphold boasts a completely commission-free service, but it’s important to note that crypto withdrawals, bank withdrawals, and SWIFT transactions incur a fee. SEPA and US bank withdrawals are free, however. Fiat currency support: Uphold supports 27 different fiat currencies, including GBP, USD, AUD, CAD, and EUR, with bank connectivity in 35 countries. Deposit & withdrawal methods: Uphold supports credit/debit card, bank transfer (ACH), wire transfers, SEPA, FPS, and SWIFT deposits and withdrawals. Supported cryptocurrencies: Uphold lists 30 cryptocurrencies, including BTC, ETH, XRP, LINK, DAI, USDC, TUSD, and BAT. Hacks and security: Uphold has never experienced a hack, and boasts constant vulnerability scanning. 24/7 monitoring, and third-party auditing. Uphold also maintains a that provides detailed insights into the current status of reserve assets alongside an insurance policy for user capital. transparency page Key Takeaways
Choosing the right cryptocurrency exchange for your needs depends entirely on your personal requirements. If you’re a professional trader and require robust trade interface functionality, Binance or Bittrex will provide you with the tools you need. New crypto investors or casual investors, however, may benefit from the simple and streamlined trade interface offered by Coinbase or Uphold.
When trading cryptocurrency on a cryptocurrency exchange, it’s important to keep in mind that exchange wallets are “hot” wallets and are thus not a secure option for long-term crypto storage. If you’re trading cryptocurrency, it’s best to store your crypto on a dedicated hardware wallet and move it onto an exchange only when required for trading.
Crypto Exchanges and Tax Reporting
One element to keep in mind as you buy, sell, and trade various crypto assets is the
. Most governments around the world treat crypto as an investment—meaning capital gains and losses associated with your investing activity need to get reported on your yearly taxes. tax implications of crypto
Because of the transferable nature of cryptocurrency, crypto exchanges often do not have the ability to provide users with gains and losses tax forms. This creates a problem for millions of cryptocurrency investors all over the world, as reporting crypto related income without proper documentation is extremely difficult.
We wrote about the crypto exchange tax reporting problem extensively in our blog post:
. The Crypto Exchange Tax Problem Cryptocurrency Tax Software
To solve the crypto exchange tax reporting problem, cryptocurrency tax software platforms like
have become prevalent. CoinLedger
Today, hundreds of thousands of crypto investors can simply import their trading history from any of the exchanges they use directly into their CoinLedger account. Once historical trades are imported, the software generates all
based on the users trade data with the click of a button. necessary crypto tax forms
You can take your tax reports to your accountant or simply import them into your preferred tax filing software such as
or TurboTax . TaxAct
You can learn more about
. how CoinLedger works here