You may wonder why I am writting about a subject like this one despite always repeating that « The abrupt truth about Bitcoin is that, if its value was not sharply growing as it does, a lot less people would care about it. » 1. In short : yes, definetely yes, right now, most people trade Bitcoins and cryptocurrencies out of speculation.
However, unlike stock exchange trading, it doesn’t impact the real economy and does not destroy jobs. At least not yet. So until it does, I also played this card, mostly to earn a certain financial freedom allowing me to launch Coinboard project and some others that I will explain all in good time.
That being said, I started trading in August 2017 and had to struggle with most mistakes that crypto-traders do when they begin. These mistakes include getting ripped off by some exchanges because of their extortionate fees. So here is a bit of experience sharing.
Note for impatient persons
Click here to jump straight to the conclusion ;)
Coinbase: the best UX, but really high fees
Most traders you will met, who started trading in 2017 and are from a Western country, will tell you that they bought their first Bitcoins, Ethereums or Litecoins on Coinbase. Why ? Because the design is really friendly and makes you feel deservedly safe.
1.49% 2, this is 6x to 30x higher than most exchanges !
Moreover, the buy prices on Coinbase are higher than the average one. So in fact, you pay your coins way more than on many other exchanges.
First, the website is down almost every week,
Google search is filled with complains.
Secondly, you will have many issues with orders that
There are more than 1,300 different cryptocurrencies in existence,
but only 4 available on Coinbase...
|UX||★★★☆||The UX is very well designed. The only dark side is that it's not a real exchange where you can see serious charts and current buy and sell orders. But that's why it has so much success despite the crazy fees, even a 5 years old kid could use it.|
What about GDAX ?
GDAX is a subsidiary of Coinbase, with (really) lower fees. However, the coins prices on this marketplace are often the highest among main exchanges ones. So the low fees are worthless if you have to pay a “premium” for any coin you buy. This is without saying that only 3 coins are available on GDAX. This is why I didn’t even add it to this comparison.
The strengh of GDAX lays upon its Bitcoins volumes. Indeed, this is interesting for big traders managing millions of dollars worth of Bitcoins because they can set up huge Bitcoins buy and sell orders without the risk of influencing the exchange market.
Kraken: the serious one
Kraken is the second exchange I regularly used to get rid of Coinbase fees. I chose this one because it’s a serious one. How do I knew that ? Because this exchange was the one being appointed by the bankruptcy trustee to assist in processing Mt. Gox claims, and we are talking about 127,000 investors. Moreover, Kraken is also based in San Francisco and has been around for 6+ years, so that’s another seal of trust.
|Fees Cost||★★★☆||0.16-0.26% 3, this is the average fee applied by many market places.|
I had only some issues from time to time with the website but that's ok.
However, setting up a trade order often require multiple refreshes and retries.</a>.
Only 17 different cryptocurrencies.
That's better than Coinbase but still really low.
|UX||★☆☆☆||The UX is really not friendly. Passing regular orders is painful because it's hard to get all the required information on in real time the same page. The same goes with depositing, withdrawing and especially following you transfers in progress.|
Despite the bad UX, they are the only ones I trust to play with my fiat, even with really big amounts. That’s why they are my favorite exchange to transfer my money from and to my bank account, so that I can buy or sell to enter or leave the crypto-world. In 6 months, I never had any issue.
However, for the everyday trades between cryptocurrencies, the fees are too high in my opinion and the number of different cryptocurrencies available is still too low.
Bittrex: the number 1, but not for long
When I started trading, Bittrex was the perfect exchange that most Western crypto-traders were talking about (as Poloniex was before Bittrex). Why ? Because it was the best equilibrium between reasonable fees, high-enough volumes and many different cryptocurrencies available.
0.25% 4, this is a little high.
They also take a bit exagerated commissions on certain cryptocurrencies transfers, like Neo (when it's supposed to be free).
|Availability||★★★☆||Bittrex availability is really good, I only had some issues from time to time.|
|Crypto-Assets||★★★☆||~ 200 different cryptocurrencies.|
|UX||★★★☆||This is not beautiful but this is efficient. You will easily find all the information you need when you need it. Helpful messages appear exactly when you may need them, which is of great help when trying to grasp with how it works.|
Binance: the new, fast growing, big player
At first I discovered Binance just because it provided some cryptocurrencies that were not available on Bittrex. To be sincere, I didn’t trust them much and their ranking among exchanges was quite low. Now I know that it’s just because I was among their early adopters (there are now the 3rd/4th biggest exchange, worldwide). So I played only with 10% of my assets there, discovering the joy of really low fees which allow you to margin-trade and safely often buy or sell without worring a bit about the commissions. What a relief ! And little by little I used less and less Bittrex to finally holding and trading 100% of my exchange assets (cold-stored wallets put aside) on Binance.
What I loved about them apart from their low fees ? The transparency. They tell you everything about what is planned to happen, their figures or when they had an issue. They are also really good at quickly answering regular concerns via a short news when required.
And last but not least : they included all the Bitcoin and Ethereum forks, which is a really nice-to-have practice. These forsk give you basically “free money” so that you can sell them immediatly to earn more Bitcoins (or keep them if you believe in the project).
0.05-0.1% 5, this is **really** low !
I hold BNBs most of the time to get the lowest fees (0.05%).
|Availability||★★★★||Even during the craziest times, the website always hold while Coinbase, Kraken or Bitfinex fail.|
|Crypto-Assets||★★★☆||~ 90 different cryptocurrencies. That's the only weak point in front of Bittrex, but they have multiple exclusivities and are adding new coin almost everyday and should catch up.|
|UX||★★☆☆||This is quite a "dirty" design but it's really usable. I just hope they will match GDAX / Bitfinex UX quality in the future.|
Binance is by far an almost-perfect exchange (put aside the so-so UX) and the constantly-openend tab on my browser. I have been trading daily for months on it and they earned my trust through their rock-solid availability, transparency, low fees and amazing community.
I would not be surprised if they become the biggest exchange at some point during the next months.
My empirical advice can be summed up in three bullets :
- Buy your first Bitcoins / Litecoins on Kraken,
wiring your fiat currency via a bank transfer.
- Transfer these crypto-currencies to Binance
and trade between crypto-currencies on Binance.
- When you want to cash your earnings in fiat, transfer your Bitcoins / Litecoins to Kraken
, sell them there and ask for a wire to your bank account.
Litecoin transactions (thus “transfers”) fees are way lower than Bitcoin ones, and they are also way faster. I then recommand using Litecoins rather than Bitcoins to transfer your funds between Kraken and Binance. You could also use Ethereums for that but the transfers are really slow.