In recent years, cryptocurrencies have emerged as a viable asset class for many investors. The market provides an alternative to those wishing to diversify their portfolios from the traditional asset class. Cryptocurrency exchanges services provide a platform for these people to trade in cryptocurrencies. On these services, investors can buy BTC, ETH, and other cryptocoins and begin to trade. This process isn’t too dissimilar to what goes on in the forex market where investors trade fiat currency pairs.
There are a host of exchange and trading platforms on the internet. Each one of them tries to offer something different in order to gain more clients. The focus of this article will be on cryptocurrency exchanges that support crypto-to-crypto transactions. Before going into the subject matter, it is important to examine what crypto-to-crypto transactions are.
These are trade transactions that involve the direct exchange of one cryptocurrency for another. Fiat currencies like USD, JPY, and GBP do not play any role in facilitating these transactions. There are 3 basic forms of cryptocurrency-to-cryptocurrency transactions.
This involves trading Bitcoin for Altcoin. Here, the individual exchanges Bitcoins for Altcoins like Ether, Litecoin, and Ripple. Altcoin refers to all other cryptocurrencies apart from Bitcoin. It was coined from “Alternative to Bitcoin.”
This involves trading one Altcoin like Ether for Bitcoin. One popular application of this trading process if for people who invest in ICOs and obtain Altcoin tokens. If the ICO is successful and the token ends up becoming more valuable, the investor can exchange them for Bitcoin.
This involves exchanging one Altcoin for another Altcoin. By keeping an eye on the current market prices and making useful future predictions, traders can make profits exchanging Altcoins.
Th below Exchange platforms support many different Altcoins in addition to the usual suspects like BTC, ETH, and LTC.
Kraken was established by Jesse Powell in 2011. The exchange service has its head office in San Francisco in the United States.
The Kraken crypto exchange service supports as many as 15 different cryptocurrencies. Users can purchase cryptocoins from the platform using fiat currency like USD, JPY, CAD, and GBP. Deposits and withdrawals can be made via wire and SEPA transfers.
Compared to most of the major players in the exchange market, Kraken offers some of the lowest fees. All withdrawals made via SEPA transfer attract a fee of €0.90. For other transactions on the platform, the fees depend on the amount involved. Higher value amounts get charged lower fees. Generally, the range of the fees on the platform is between 0 percent and 0,26 percent.
There are different tiered account options on the platform. Each tier has its own deposit/withdrawal limits as well as account verification requirement. The Kraken security protocols include PGP email encryption and 2-factor authentication.
Bittrex, founded by expert security engineer; Bill Shihara is a crypto exchange platform based out of Seattle in the United States. The platform has been offering crypto exchange services since 2014.
The platform is known for featuring a comprehensive cryptocurrency listing. There are hundreds of coins and tokens on offer for trading. There are also more than 400 BTC currency pairs.
Bittrex only supports cryptocurrency payment methods. However, traders who run enhanced verified accounts can purchase BTC, ETH, and USDT via wire transfers. These purchase orders must be in excess of $10,000.
There are no hidden fees on the platform. Bittrex charges a flat fee of 0.25 percent on all trades irrespective of the value. The security features on the exchange service include cold storage for coins and 2-factor authentication protocols.
Binance is a major player in the Asian cryptocurrency market. The platform hosts a great percentage of the Asian BTC and ETH trade volume. Based in China, the platform was established in 2017.
The platform operates with a focus on the Chinese cryptocurrency trading market. Users from around the world may still use the service. The Binance platform also has its own cryptocoin called BNB which can be traded on the platform.
There are a host of cryptocurrencies that can be traded on the platform. New coins are also added regularly. Most of the coins on offer can be traded against BTC and ETH. Trading fees are pegged at 0.1 percent on all trades. Binance does not support payment via fiat money. All payments and withdrawals are in cryptocurrencies.
Bitfinex is reputed as being the largest Bitcoin exchange service on the market dwarfing the trading volumes of services like Kraken and Coinbase. The platform is based in Hong Kong and has been offering cryptocurrency exchange services since 2014.
It provides support for all the major Altcoins as well as BTC. Users can trade these Altcoins in exchange for US Dollars or Bitcoins. Despite some setbacks in the past on account of hacking and lost BTCs, the service has managed to weather all the storms. It continues to be a leading player in the crypto exchange market.
Bitfinex is a favorite of many seasoned traders. This is due to the availability of advanced tools such as TWAP, stop & limit orders, as well as fill/kill. There are also a number of market chart features that allow pro-traders to make useful analysis on the platform.
Account verification is required on the platform. The verification required photo ID authentication. The process takes between 15 to 20 business days. Apart from the website version, Bitfinex also has a mobile app for on-the-go trading. This app is compatible with both iOS and Android platforms.
Bitstamp is the brain child of Damijan Merlak and Nejc Kodrič; one a Bitcoin mining enthusiast and the other a computer salesman. The platform was founded in 2011 and is today one of the most trusted crypto exchange service in Western Europe.
The platform originally functioned as a Bitcoin only exchange service. However, by the start of 2017, LTC and XRP were added to the list of supported crypto coins. In August, Bitstamp went a step further by including ETH as part of their exchange service catalog.
The Bitstamp exchange platform operates via web and mobile applications. The mobile app is available for download on the iOS and Android app stores respectively. The fees charged on the platform depend on the nature of the transaction. All cryptocurrency transactions have no fees attached to them. The same applies to deposits made via SEPA. However, withdrawals via SEPA attract a €0.90 fee.
The payment methods supported by the platform include debit/credit cards as well as SEPA transfers. In terms of security, the platform requires account verification. Other security features include 2-factor authentication and cold wallet storage.
It is important to carry out as much research as possible when joining an exchange platform. Just like any other asset class, there are risks involved in the crypto exchange market. Many of these services provide wallet functions. It is a good idea to never hodl your coins on these online wallets. Only move coins there when you want to trade or exchange them for other coins. Cold storage of coins is always the safer option.