5 Top Cryptocurrency Exchanges

Investing in cryptocurrencies has becoming increasingly popular but, as interest in digital currencies gains momentum, scams related to this exciting phenomenon are also on the rise.

This is why when it comes to trading, buying, or selling cryptocurrencies, doing so on an exchange with a reputable name is important. As Commodity.com describes, one of the best ways to avoid cryptocurrency exchange scams is to read broker and exchange reviews before opening an account.

With over 1,600 cryptocurrencies listed, according to data from Coinmarketcap.com, and nearly 200 crypto exchanges, it can certainly be overwhelming finding the right cryptocurrency exchange for new investors.

When it comes to making a decision, Commodity.com advises that with countless unregulated exchanges, investors should be “wary of too-good-to-be-true promotions and promises of quick riches.”

On that note, here the Investing News Network (INN) briefly profiles the five top cryptocurrency exchanges current as of May 23, 2018 and as listed by the CryptoCoinCharts.

1. Bitfinex

Bitfinex is first on the list of five top cryptocurrency exchanges, and is a centralized exchange. What a centralized exchange means is that it essentially handles the trading of cryptocurrencies like bitcoin to fiat or other currencies, but is not anonymous and may be subject to hackings.

Bitfinex was founded in 2012 and has been the largest bitcoin exchange platform since 2014, accounting for over 10 percent of the exchange’s trading.

Based in Hong-Kong, the exchange facilitates US-dollar based trading of top cryptocurrencies like bitcoin, ethereum, EOS, litecoin, Ripple and NEO, to name a few, and allows unfinanced and financed transactions.

An example of an unfinanced transaction is when a user deposits $100 into their account on the site and can then buy that amount’s worth of cryptocurrency in an unfinanced transaction. A financed transaction is allowed through Bitfinex’s platform-enabled peer-to-peer financing, which allows participants to use third party peer-to-peer financing from other users on the platform to trade digital currencies.

That being said, Bitfinex has faced a number of challenges over the last couple of years. In 2016, more than $72 million worth in bitcoin was stolen from the Hong Kong-based exchange, totaling 120,000 units of bitcoin at the time. By April 2017, it was reported that Bitfinex had repaid in full its affected users.

2. Binance

Second on the list of top cryptocurrency exchanges is Binance, another centralized exchange, and was founded only in 2017. The Binance platform is for only trading cryptocurrencies, not for any FIAT-related wire deposits. The exchange supports the trading of bitcoin, ethereum, litecoin and its own digital currency, Binance Coin (BNB).

While the exchange focuses primarily on the Chinese market and Chinese coins, it does support English and Chinese users and can process roughly 1.4 million orders per second.

Binance has risen to widespread popularity in its nine month life span, and was reportedly three times more profitable than social media mammoth Twitter (NASDAQ:TWTR) in Q1 2018.

In mid-May, Binance announced TrueUSD, which is a blockchain-based stablecoin attached to the value of the USD. “In the TrueUSD System, US dollars are held in the back accounts of multiple trust companies that have signed escrow agreements rather than in a bank account controlled by a single company,” Binance explains. TrueUSD was projected to begin listing on the Binance exchange on May 18, but Binance announced on May 17 that trading would begin on May 22.

3. Coinbase GDAX

Coinbase GDAX is the first exchange listed here that is based in the US and is also a centralized exchange. GDAX, or Global Digital Asset Exchange, is a product of Coinbase and supports the trading of bitcoin (BTC), bitcoin cash (BCH), ethereum (ETH), and litecoin (LTC) for fiat currencies.  Some examples of the pairs its users can buy and sell digital assets include: BTC-USD, BTC-EUR, BTC-GBP, BCH-USD, BCH-BTC, BCH-EUR, ETH-USD, ETH-BTC, ETH-EUR, and so on.

GDAX is backed by the New York Stock Exchange and primarily targets savvy traders that are “highly active.” According to Investorpedia, GDAX’s former name was Coinbase Exchange but was then changed to GDAX in 2016. The exchange currently operates in the US, Europe, United Kingdom, Canada, Australia and Singapore.

Coinbase was created in 2011 and has its primary operations in San Fransisco. Over the last seven years, Coinbase has accumulated over 20 million users to its platform

4. HitBTC

HitBTC is fourth on our top cryptocurrency exchanges list and was founded in 2013. Like the other exchanges listed above, HitBTC is also a centralized exchange and supports bitcoin, ethereum, litecoin, dogecoin, monero, the US dollar and the Euro in addition to over 300 other cryptocurrencies.

The exchange officially launched in 2014 with BTC/USD, BTC/EUR, BTC/LTC, and USD/EUR as the first trading instruments. Since then, the exchange has expanded to add more than 500 available instruments.

5. Bitstamp

Rounding out our list of five top cryptocurrency exchanges is Bitstamp, which is also centralized. Bitstamp’s exchange is located in the United Kingdom, and allows for the trading between USD and bitcoin. Much like the other exchanges on this list, Bitstamp allows companies and individuals to buy and sell bitcoin, litecoin, ethereum, ripple and bitcoin cash.

In addition to its headquarters in London, Bitstamp also has offices located in Luxembourg and California.

In March, rumors began swirling that the exchange was to allegedly be acquired by South Korean investors for a blockbuster $400 million deal, but by late April CEO of Nexon Korea, Lee Jung-hun denied allegations that his company was set to acquire Bitstamp. Since then, there has been no additional information pertaining to any potential acquisition being made of Bitstamp.

All told, cryptocurrencies are one of the hottest topics and areas of interest today, but interested investors should be sure to exercise due diligence and conduct their own research due to the volatility of of the space and to avoid possible scams. That said, investing in cryptocurrencies can certainly provide profitable returns; figuring out which of the many cryptocurrency exchanges is the best fit, however, is the first step.

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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.