Despite a wildly volatile exchange rate (which saw bitcoin plummet below $5,000), cryptocurrencies like bitcoin seem like they’ll be around for a bit longer to say the least. In fact, the cryptocurrency “industry” has a market cap of over $122 billion, according to CoinMarketCap.
And while bitcoin had a disappointing drop right before Thanksgiving, tumbling 12% to around $4,915.06 on CoinDesk.com, cryptocurrencies have become increasingly popular – and exchanges are trying to keep up with it.
For those brave investors wishing to get into trading crypto, there are a ton of options for exchanges and wallets. But, what are the best cryptocurrency exchanges, and which one is right for you?
What Is a Cryptocurrency Exchange?
A cryptocurrency exchange is an exchange that allows investors to buy, sell and trade various cryptocurrencies often bought with fiat currencies – government legal tender like the U.S. dollar or the Euro.
Cryptocurrencies are in that grey space between currency and stock – and, given that investors have noticed crypto fluctuating in tandem with the stock market, many seem to argue it may be more of a security. Still, cryptocurrency exchanges perform essentially the same service as regular exchanges on the stock or bond market – they allow people to buy or sell cryptocurrencies.
There are a multitude of cryptocurrency exchanges that trade a variety of coins, including bitcoin, litecoin, ethereum and many, many more. While not all exchanges allow you to buy coins with U.S. dollars, those that do allow you to use your own cash to purchase coins or trade different coins – like buying bitcoin with litecoin and so on.
Cryptocurrency exchanges will often have a USD value for the coin you are looking to buy reflected in the exchange rate. Exchanges may also show the exchange rate between different coins.
How to Invest in Cryptocurrency
Given the somewhat ambiguous nature of cryptocurrency (is it currency? Is it a security? Is it all in our heads?), investing in cryptocurrency is something between a security and an actual form of currency. Because its value is so high (even though it has recently dipped, bitcoin is still worth a pretty penny), it is something of an investment.
In fact, there are short-term, medium-term and long-term investments you can make in cryptocurrencies like bitcoin and the like – all subject to market fluctuations. But once you’ve decided you want to go for it and start investing in cryptocurrency, you’re going to need a good cryptocurrency exchange.
Many exchanges allow you to invest in cryptocurrencies directly with USD.
The Best Cryptocurrency Exchanges
A good cryptocurrency exchange is essential to beginning (or continuing) your journey of investing in cryptocurrency. So, what are some of the best cryptocurrency exchanges, and what makes them stand out?
Touted by many as the “most beginner-friendly exchange,” Coinbase has a lot to offer.
Founded in 2012, the San Francisco startup was the first to earn a “unicorn” status for a crypto exchange with its $1 billion valuation.
The plus of Coinbase is that the service functions as an exchange, wallet and tool set for merchants. Currently, Coinbase trades in four different cryptocurrencies. Additionally, the exchange-slash-wallet accepts fiat and has a typical fee of 1.49% to 3.99% per purchase (for $1,000 of bitcoin, that would be about $14.90). However, you can’t short-sell or margin trade on Coinbase.
Still, for beginners wading into the crypto waters, Coinbase is an easy-to-use platform that allows you to either purchase coins (like bitcoin or litecoin) through their wallet or trade through their sister platform GDAX, which allows more advanced traders the opportunity to trade with each other at lower trading fees. Coinbase’s wallet is available on iPhone and Android interfaces as well, which certainly has helped its popularity.
Read more: https://www.thestreet.com/investing/bitcoin/best-7-cryptocurrency-exchanges-14777561