The Best Place to Buy Crypto

Mikey Caloca / One37pm

Cryptocurrency is starting to hit mainstream headlines more frequently. Investing platforms, institutions and the government are all starting to consider what value should be attributed to cryptocurrency. Many investors are debating whether or not to allocate a portion of their investment portfolio to cryptocurrencies.

Cryptocurrency is one of the riskier asset classes to consider investing in, and there still is no clear picture as to which cryptocurrency is the right investment. As reported by Gemini in their 2021 The State of U.S. Crypto report, the average age of those invested in crypto is 38 years old. As of 2021, the average number of people invested in cryptocurrency is only 14% of the sample that was polled. However, in the rest of the group, 63% reported that they are curious about investing in cryptocurrency. Since the early days of Crypto, Bitcoin (BTC) has been the most popular conversation starter. In Gemini’s report, 95% of the overall group polled were familiar with Bitcoin, but only 23% knew about Ethereum (ETH). As for the rest of the top cryptocurrencies, even less was known by the majority of those who were part of Gemini’s research. A key takeaway from the report is that those who are crypto-curious prioritized understanding the space.

It is widely known that investing in crypto comes as a high-risk, high-reward investment. Both Bitcoin and Ethereum are volatile investments and are known to lose 80-95% of their value in less than a year.

What is a Crypto Exchange?

A cryptocurrency exchange is an application, platform, or business that allows customers to buy, trade, and sell cryptocurrency or digital currencies for various assets. In the past year, we have seen the rise of NFTs—which are most commonly purchased through the use of cryptocurrency. These exchanges allow users to convert fiat currency (money that is established as currency by a government regulation, i.e. the U.S. Dollar) for digital currencies. 

Buying crypto through a crypto exchange usually requires the user to register an account and provide debit, credit, or bank account information in order to acquire digital currency. Some of these exchanges require different forms of identification, along with processing fees, and several days to verify the account information you provide. Even for those who do not seek to invest in crypto immediately, it is good practice to have a crypto exchange account so that when you want to invest there are no 3-5 business day processing delays. 

What features are important to look at when deciding on an exchange?

When considering which crypto exchange to invest with, there are several factors to consider. One of these factors is what commission each exchange will take on the buying, selling, trading, and transferring of assets. Some exchanges charge a flat rate while others take a percentage of each transaction.

Another important factor to consider when selecting a crypto exchange is to look at whether or not the platform is centralized or decentralized. A decentralized platform allows the decision-making to be done by teams within the community, and the power is distributed among the individuals who participate in using the platform. Meanwhile, centralized exchanges make decisions based on the senior board or selected leaders of the company. Decentralization is an important component of the crypto world due to the fact that cryptocurrencies are built on the blockchain where information is shared and stored on a public ledger. This allows the individual to have control over their own digital assets and currency—when an exchange is centralized it limits the freedom the user has over their own money.

What's the difference between a crypto exchange and a crypto wallet?

Many crypto exchanges offer the user the ability to buy, trade, and sell cryptocurrencies, but they do not allow the user to have entire control of where they send their digital assets. Meanwhile, some crypto exchanges provide the user with a crypto wallet which enables the customer of the exchange to send their digital currency to other crypto wallets that are not exclusive to the exchange's application. One of the most common examples is Coinbase's wallet, which allows the user to transfer their purchased crypto to another wallet like Metamask.

For those curious about investing in crypto, here are some of the most popular exchanges to buy, trade, and sell cryptocurrencies.

1. Coinbase

One of the most popular exchanges for buying and selling cryptocurrency is Coinbase. Founded in 2012, the platform set out with the goal of providing ease of access to their users to securely send and receive Bitcoin. Since then, the company has grown to be one of the most widely used exchanges and offers a variety of currencies that span the broader crypto-economy. Recently, the company had its initial public offering (IPO) on the NASDAQ in Spring 2021. With over 68 million users across over 100 countries, the platform trades more than $462 Billion USD each quarter. 

Coinbase offers one of the easiest to use platforms and offers many crypto options. Along with their platform, Coinbase provides a custodial wallet that allows users to transfer their digital assets to other custodial and non-custodial accounts. This makes Coinbase one of the preferred platforms to acquire crypto assets, which can then be sent to purchase NFTs. 

Although Coinbase is accessible, it is not decentralized, unlike other options like Bisq, meaning they do not allow users to control complete custody of their crypto. This puts users at risk of a hack or unexpected freezing of assets. 

Trading Fee: The fee charged is between $0.99 and $2.99 depending on the dollar value.

2. Gemini

Founded in 2014 by Tyler and Cameron Winklevoss, Gemini offers more than 30 cryptocurrencies on their platform and has an easy-to-use interface that is popular for crypto trading. The company prides itself on the trust it is building with its customers and asking permission before forgiveness. The application can be used in all 50 of the United States and also boasts the ability for peer-to-peer and crypto-to-crypto trading. Their application allows you to send any of their approved digital assets to another crypto wallet via their own custodial service. Like Coinbase, Gemini is also a centralized application that limits the control you have over your assets, but provides the flexibility to acquire cryptocurrencies and then move them to a decentralized or non-custodial application. 

Trading Fee: The fee charged is between $0.99 for smaller transactions and up to 1.49% for anything larger than $200.

3. Binance

Binance was founded in 2017 and currently supports more than 100 cryptocurrencies. Some of their most popular currencies are Bitcoin, Ethereum, Litecoin, and its own BNB coin. Users in over 180 countries can trade on Binance, but only 43 states can use Binance.US, excluding Connecticut, Hawaii, New York, Texas, Vermont, Idaho, and Louisiana. The exchange is reported to be currently supporting more than 100 million users this year. Binance provides a variety of charting and indicators for those who are interested in trading cryptocurrencies. Similar to Coinbase and Gemini, the platform is not decentralized.

Trading Fee: 0.02% to 0.10% purchase and trading fees, 3% to 4.5% for debit card purchases, or $15 per U.S. wire transfer.

4. Bisq

Founded in 2014, Bisq is a peer-to-peer trading network that differentiates itself from other websites and apps that are centralized services. Bisq enables users to run their software on their own hardware, which allows the user to control their own assets. This network also allows users to be connected to others who are running the Bisq software to facilitate trades. The Bisq network is open-source and community-driven. 

Users may download the software on desktop and mobile devices. The user does not need to provide identification in order to use the software, unlike other platforms that follow Know Your Customer (KYC) regulations. The software is decentralized and has payment support for over 26 different options. On the downside, users will experience slow speeds on some of the payment methods and the transactional volume is low. 

Trading fee: Makers pay 0.10% and takers pay 0.70%.

5. Kraken

Created in 2011, Kraken is available in 47 US States and 176 countries. Their crypto exchange supports 40 different cryptocurrencies. As one of the largest crypto exchanges alongside Coinbase, Gemini, and Binance, the daily market activity allows for liquidity. In addition, the platform is notably safe to trade on as it has never experienced a hack. Users can use MasterCard, Wire Transfer, and Bank cards to acquire digital currencies. Kraken has a mobile app, and provides analytical tools which are helpful for traders. There is a daily maximum trading amount of $100,000.

Trading Fee: The fees vary from 0.16% to 0.10% for 30-day transactional volumes of between $0 and $500,000.

6. eToro

In 2007, eToro was founded as a trading platform for those looking to copy trade from the experts they follow. The platform allows users to trade stock, securities, forex, CFD, and crypto-assets. This allows beginners to trade with less experience in the assets they want to trade by copying a trade that is being done by a professional trader. 

The exchange supports 94 cryptocurrency trading pairs, and the eToro mobile wallet app is a custodian wallet that uses a multi-sig scheme for crypto users. The exchange provides a range of charting and technical indicators for trading. For those looking to get into cryptocurrencies but also stick to conventional trading, eToro provides a wider range of options. 

Trading fee: 0.75% for trading crypto. For fiat to crypto, the conversion fee is 5%. eToro charges 0.1% for crypto-to-crypto exchanging or conversion.

7. Robinhood

Founded in 2013, Robinhood began as a platform for the day-to-day retail trader and investor. Their commission-free model for trading allowed retail investors who could not afford the fees that other brokerages charged to start their trading and investing journeys without a barrier to entry. Robinhood has always put the smaller investor first and has offered many opportunities that benefit investors that are new to the stock market. Robinhood began letting users dabble in crypto investing by buying Bitcoin within their platform. This allowed users to get exposure to cryptocurrency but did not enable the users to do anything with their crypto except buying and selling it within their centralized app. 

In September, Robinhood announced that they would officially be entering the crypto market as a competitor with their fully integrated wallet application that will allow users to transfer cryptocurrencies in and out of their exchange—similar to Gemini and Coinbase. The wallet update for Robinhood currency has a waitlist sign-up, but once it is launched Robinhood will be making a big step by allowing investors to have a little more control over their cryptocurrency. 
Read more about Robinhood’s wallet announcement here.

8. Cash App

Square launched Cash App services in 2013, which is meant to compete with peer-to-peer payment services like Paypal’s Venmo and Google Pay. Like many other peer-to-peer payment apps, Cash App allows users to transfer money using their smartphones. Since their launch, they have expanded beyond peer-to-peer payments. Users are now able to receive direct deposit payments, ACH payments, invest in stocks commission-free, and buy cryptocurrencies. 

At the time of this article, Cash App’s crypto exchange allows users to buy and sell crypto within the app, and currently only supports Bitcoin. The max transactional limit for BTC users is $100,000. 

Cash App is easy to use for beginners looking to get exposed to purchasing crypto but until further updates by the app, there are a fair amount of limits to what users can achieve. 

Trading fee: Free for sending and receiving via banks, 3% fee charged on credit card payments, and 1.5% for bank instant deposits.

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