This article helps sift through this crowded cryptocurrency exchange space. Here’s a list of the top cryptocurrency exchanges grouped in tiers. From what people generally consider to be most respected to not recommended.
This article reviews the top best Bitcoin/cryptocurrency exchanges in 2019. The increasing popularity of cryptocurrencies and imminent bull run means that people are hurrying to cryptocurrency exchanges. But without carefully considering how they work.
Brief explainer on the tiers mentioned in this review:
- Tier 1 exchanges are those which I have personally used for a substantial amount of time.
- Tier 2 exchanges I only use from time to time, probably because they have some unique assets listed which other exchanges do not have. Personally I only leave assets on there for 1 to 2 months at most.
- Tier 3 exchanges I only use for 1 day if I really have to. I try not to leave assets on these exchanges.
- Tier 4 exchanges are those which I have experienced a lot of problems in the past.
The cryptocurrency exchanges in these tiers are not mentioned in any specific order.
Tier 1 Exchanges (Active Trading)
This is the leading cryptocurrency exchange in the United States and United Kingdom. They also have the licences and bank accounts to operate in those countries. Coinbase has reliable customer support, and features fiat deposits and withdrawals. This means that deposits and withdrawals in traditional currencies such as USD, EUR etc. are supported.
Coinbase is secure with no hack incidences. The exchange is the best option for those new to the cryptocurrency world.
However, the exchange offers limited cryptocurrencies to choose from. In addition, the availability to buy, sell, send and receive a particular cryptocurrency depends on your location.
In the case of US customers, there are no restrictions on transacting the following cryptocurrencies:
- Bitcoin (BTC);
- Ethereum (ETH);
- Litecoin (LTC);
- Bitcoin Cash (BCH);
- Ethereum Classic (ETC); and
- Ripple (XRP).
Most common forms of payment are accepted by Coinbase, for example credit and debit cards.
During a live AMA on 16 May 2019, Coinbase’s CEO Brian Armstrong confirmed that the Exchange will introduce its debt card to U.S. customers. Currently, the Coinbase Card- a Visa-based debit card allowing customers to make purchases online and in-store using crypto, is only available to customers in the U.K.
Check out our Coinbase review for an in-depth look at this exchange.
Kraken has a substantial presence in Europe, and listed cryptos have fiat pairs.
As with Coinbase, it is suited for entry-level crypto traders due to its limited array of tradable cryptocurrencies. Although it includes many more currencies compared to Coinbase such as Cardano and Elastos. Here is a full list of cryptocurrencies tradable on Kraken.
This is the leading virtual currency exchange in the world by adjusted volume. Unlike Coinbase and Kraken, Binance supports a wide range of altcoins (i.e. cryptocurrencies other than Bitcoin).
This attracts more people to transferring their Bitcoin, Bitcoin Cash, and Litecoin from other exchanges to Binance to explore the altcoin world.
Because of Binance’s popularity, lots of new coins aim to become listed on Binance and gain a lot of reputation when they do. Sometimes, the announcement of a Binance listing itself can send the prices up.
The popularity of Binance has made its CEO Zhao Changpeng (CZ) a personality in the cryptocurrency community. His words/actions have now have significant influence.
Check out my interview with CZ at Binance’s first ever conference in Singapore this year!
Binance was recently hacked and around US$40 million worth of cryptocurrency was stolen. Binance has promised to compensate anyone who has suffered losses out of their own funds.
We will have to see how Binance will overcome this incident and it shows that they, as with all exchanges, not 100% safe. Read more about the Binance hack.
These exchanges are reliable and offer reputable services. Bittrex I used extensively in the past because they listed lots of coins. However I eventually moved away from Bittrex because Binance overtook them in terms of coin selection.
Bittrex will be removing the following markets after 31 May 2019: BTC-COVAL, BTC-SALT AND BTC-XCP. And the following markets after 6 July 2019: BTC-LUN, BTC-NEOS, BTC-THC and BTC-TKS
I also used Poloniex extensively in the past. However in my experience, their Know Your Customer (KYC) process took a long time. In my case it took 3 months to complete. This was unacceptable especially when it was during the bull market.
Customer support on Poloniex isn’t terrible, so they still seem to be a good exchange.
However if you are a U.S. citizen, you may need to be aware of Poloniex geofencing assets for U.S. customers. On 29 May 2019, the markets for ARDR, BCN, DCR, GAME, GAS, LSK, NXT, OMNI and REP will be disabled for US customers.
Once the market has been geofenced, customers can still withdraw those tokens from their wallet so long as Poloniex supports it globally. However, customers will not longer be able to see their deposit address or generate a new deposit address.
OceanEX is licensed in Japan. This is a plus in terms of confidence.
They have more VeChain assets listed and are good with VeChain asset pairs.
However they are a bit lacking on other cryptocurrencies.
Click here if you want to learn more about VeChain and its ecosystem.
Tier 2 Exchanges (Seasonal Trading / specific coins)
KuCoin has unique assets and an extensive list of tradable coins, it has been plagued by poor Know-Your-Customer (KYC) procedures.
At first, it allowed traders to deposit and withdraw large amounts of Bitcoin i.e. 50 Bitcoin per day without providing personal details.
The lack of KYC procedures gives many people the impression that KuCoin is desperate for users on its exchange. Thus lowering its reputation amongst crypto exchange platforms.
They have since changed their KYC policies and now you can only withdraw up to 2 Bitcoin per day without a “Verified” account i.e. an account which has completed the KYC procedures.
Huobi and OKEx were the main titans of China. They had lots of Chinese users before the Chinese government cracked down on cryptocurrency trading in the country.
This was known as the “Golden Vacuum” since it obliterated a lot of Huobi and OKEx’s dominance. This destabilized the two exchanges giving way to others like KuCoin and Binance to take charge.
I still consider them as Tier 2 exchanges because they still hold onto some of their past customers and because they have the technology for the future.
There are rumours that the Chinese government allows these exchanges to operate but keeps tabs on their transactions.
BitMEX is mostly a margin trading exchange allowing enormous leverage (i.e. up to 50 times). Leverage trading is when you do not own the physical bitcoin but you own trading contracts.
Unfortunately, BitMEX does not operate in the United States and be careful not to login to your BitMEX account there, your account will get banned.
Although I have heard of some Americans that use VPNs (Virtual Private Networks) to mask the country of origin so as to bypass this restriction.
This is NOT recommended.
BitMEX has poor customer support. It took me 3 months of emails to unban my account when I accidentally logged into BitMEX in the United States.
Tier 3 Exchanges (Possible risks / issues)
Although Bitfinex is a reputable exchange, its recent struggle with the New York Attorney General for US$850 million loss of customer funds lowers its credibility. We will have to see how Bitfinex will overcome this struggle.
Apart from the case, it has a strong BTC/USD trading pair.
To stay up to date with what is happening at Bitfinex, click here.
I tried this exchange since I received a lot of requests from viewers.
However I am skeptical of exchanges that do “Transaction Mining”. Transaction Mining is where you gain credits or exchange tokens in return for trading.
This directly incentivises wash trading on the platform, which is where a trader simultaneously sells and buys the same assets.
This in turn creates misleading reports on the trading volumes on the exchange.
BitMax has announced on 18 May 2019 that for long-term stability of token economics, it will permanently lock up 3,000 million BTMX tokens from the pending mining portion on 20 May 2019.
The Exchange will in future announce the new release mechanism.
Tier 4 Exchanges (avoid these exchanges)
These three exchanges have very questionable practices.
For example, HitBTC does not have a real KYC policy. They do not seem to have much issue with you depositing large amounts of funds. However if you trade or want to withdraw a lot they will just ban or suspend your account until you communicate with them. This has happened to me personally and when I researched this I found that many others had the same experience.
Lately there has been a new wave of users complaining about having to provide excessive detail about the source of their funds.
There are also some users who have done their own investigations and concluded that the Exchange is insolvent.
The exchange has a troublesome withdrawal process.
Special mention: Cryptopia (now defunct)
The exchange announced on 14 May 2019 that it has gone into liquidation.
In their latest information to token holders on 27 May 2019, Cryptopia’s liquidators have applied to Court to preserve account information stored on various servers of an Arizonian company. This is crucial for Cryptopia to identify who owns which assets.
So far they cannot confirm any customers’ balances, and whether customers’ balance will be returned in crypto or fiat.
In conclusion, conducting a background check on a cryptocurrency platform before signing up is the best way to avoid losing your digital wealth. Following the above list is one huge step towards this goal.