In the world of cryptocurrency trading, selecting the right exchange is crucial. There are five top features that you should expect from a crypto exchange, and we’re going to look at the biggest crypto exchanges in the world and how they compete in these five areas. By the end of this blog, you’ll be better equipped to make a decision about which exchange is best for you.
1. Trustworthiness: The Number One Priority
The first thing to consider when choosing a crypto exchange is trustworthiness. For example, Coinbase is a publicly listed company that trades on the stock market, meaning it has the world’s biggest lawyers and accountants auditing the company. This reduces the chances of any suspicious activity.
For private exchanges, it’s harder to know what happens behind the scenes. However, after incidents like the FTX collapse, the industry now uses proof of reserves. This is a system where exchanges cryptographically prove that they own certain wallets and assets, ensuring customer funds are safe and haven’t been lent, sold, or moved.
Although proof of reserves is not foolproof—it doesn’t prevent an exchange from going bankrupt—it does offer a layer of security. If an exchange isn’t providing proof of reserves, consider it a red flag.
2. Fiat Currency On and Off Ramps
A critical feature of any crypto exchange is the ability to deposit and withdraw fiat currency (traditional money).
Payment Methods for Deposits
- Card Payments: Popular but costly, with fees ranging from 1.8% to 3%, depending on your country and the card provider. You may also incur another 2% fee when withdrawing.
- Bank Transfers: Often free, especially when using wire, Swift, or SEPA transfers. In some countries, you may face challenges with bank support, so it’s essential to check the options available.
- PayPal: Currently, only Coinbase supports PayPal withdrawals.
- Peer-to-Peer (P2P) Payments: Useful in regions with limited banking support. P2P transactions involve sending money to a third-party money transmitter, with the exchange acting as an escrow.
Recommended Setup
Many users prefer having multiple exchanges: one for fiat on and off ramps (e.g., Coinbase or Crypto.com) and another for low-fee crypto trading.
3. Trading Fees: Keep Costs Low
Low trading fees are essential for maximizing your profits. Here’s how the top exchanges compare:
Top Exchanges for Low Trading Fees
- Binance
- OKX
- Bybit
These exchanges offer professional setups, deep liquidity, and tight spreads, making them ideal for active traders.
Trading Fee Breakdown
- Standard fees: 0.1% per trade on Binance, OKX, and Bybit.
- Discounts:
- Binance: Holding and paying with BNB reduces fees to 0.075%.
- OKX: Holding OKB tokens offers similar discounts.
In contrast, Coinbase, Crypto.com, and Kraken charge higher fees, often hidden in the spread.
4. User Interface and Trading Experience
A good trading interface is critical for executing trades efficiently.
Best Trading Interfaces
- Binance, Bybit, and OKX provide industry-standard interfaces with customizable layouts and TradingView charting software.
Alternatives
- Coinbase (Advanced Trade) and Crypto.com offer beginner-friendly interfaces but lack advanced features.
- Kraken strikes a balance between simplicity and professionalism, although its layout may not appeal to everyone.
5. Value-Added Features: Web3 Wallets
Web3 wallets are a growing trend in the crypto space, offering a mix of self-custody and exchange-linked convenience.
Top Web3 Wallet Providers
- OKX: Provides MPC (Multi-Party Computation) wallets where users control their keys but can recover them easily.
- Binance: Offers a similar MPC wallet integrated with its app.
- Bybit: Provides both custodial and non-custodial wallet options.
Other Wallet Options
- Coinbase Wallet (separate app) offers blockchain support but requires a seed phrase for recovery.
- Crypto.com and Kraken are developing their wallet solutions but currently lag behind Binance and OKX.
Conclusion
Unlike traditional brokerage accounts, crypto exchanges don’t charge custody or account fees, making it easy to open multiple accounts. Each exchange has its strengths, and the best setup often involves using multiple platforms to optimize for fiat access, trading fees, and extra features.
If you’re ready to start, check the links below for deposit bonuses and tutorial videos to guide you through the setup process.
