How To Choose A Crypto Exchange
When you are spoilt for choice, how do you know which crypto exchange to use?
C2CX is an overseas Chinese digital assets exchange launched in December 2016, building on C2CX’s highly successful proprietary trading platform. It can be found on the web at http://www.c2cx.com or on Google Play.
Spoilt for Choice
Once upon a time, it was tough to find a place to buy and sell cryptocurrencies. There were few choices, the sites had basically no customer service, and many of them had periodic software outages. In other words, there were no real ‘good’ choices. Come 2018, that is a distant memory. These days there are literally hundreds of choices, most with reliable software, and some even with customer service.
There are so many in fact that it can be hard to choose.
Does the market need 100+ exchanges, and if so, how is a user to choose? Moreover, why should I consider an overseas exchange over a domestic one?
US/European vs. Asian Exchanges
If you’re a US-based trader, why not stick with US exchanges like Coinbase or Bittrex? Likewise, if you’re a trader based in, say, Barcelona, why go to Asia to trade, instead of sticking with one of the European exchanges?
Moreover, until recently it wasn’t very easy to get funds there. It’s a lot easier now, but back in 2017 to get to an Asian exchange like Binance or C2CX, a US trader typically had to first go to a domestic intermediary like Coinbase, pay 1.49% to convert their dollars into bitcoins or ether, then send those coins on to Asia.
And yet, starting in mid-2017 both European and American traders began to flock to Asian exchanges, and in particular, the overseas Chinese exchanges, helping these exchanges to retain their dominance of the global cryptocurrency trading market despite the Chinese government’s restrictions on their domestic market.
So why was it worth the effort?
Here are some of the main reasons:
- Trading record privacy
- Access to a far broader range of products and coins
- Lower trading fees
- Better liquidity
- Customer service
US and European exchanges are typically subject to extensive reporting requirements vis-à-vis their local tax authorities, a fact which can potentially create substantial paperwork for their customers. In addition, listing requirements in the US and Europe have traditionally been relatively restrictive, which meant both fewer and later offerings. Those who wanted to “get in early” had to go abroad. Moreover, presumably due to regulatory uncertainty, there are just not that many US and European exchanges.
By contrast, thanks to competition, Asian exchanges offered — and still offer today — far more choice, plain and simple.
The Chinese Overseas Exchanges
In a later article we’ll explore the genesis of the Chinese crypto industry in more detail, but for now suffice it to say that despite the Chinese government’s 2017 ban on domestic exchanges, in terms of both volume and innovation Chinese exchanges continue to dominate the world’s crypto markets. In fact, it’s probably reasonable to conclude that the restrictions imposed in September 2017 essentially forced the Chinese crypto industry to broaden its scope, thereby bringing the advantages of the super competitive Chinese market to the entire world.
Though BTC China is no more, the remaining market leaders Huobi and OKCoin (now OKEx) have been around since 2013. In 2016 and 2017 they were followed by several new entrants, including C2CX (December 2016), Binance and Kucoin (2H2017). Many others have since sprung up in 2018, including Coinbene, TopBTC, Hotbit, LBank, Digifinex and so on. The list is long and the volume numbers are not always very plausible.
Nonetheless, it cannot be denied that so much competition has been a good thing. Moreover, the vast amount of experience built up during China’s crypto boom, in combination with the accumulated reserves, have had the attractive side effect that virtually none have been forced to close down.
At the same time, the existence of so many competitors meant that customer service was a must. Whereas in the United States leading exchanges like Poloniex have typically expected customers to wait 6 months or more for answers to their support tickets, Chinese exchanges rarely need more than several hours, and sometimes even answer their phones. Of course, this is a generalization and not always true, but it’s also a natural result of competition.
C2CX 1.0 was an exchange focused exclusively on the Chinese market; so what does the now international C2CX 2.0 bring to the table? Moreover, why should I consider using a boutique exchange like C2CX that does not report a billion dollars per day in trading volume?
First of all, it depends what you are looking for. If you simply want access to as many altcoins as possible, exchanges like Binance or Huobi are probably good choices. They have long lists of altcoins. If on the other hand:
- your focus is on trading the major cryptocurrencies, or
- you’re looking for managed products with a lower risk profile, or
- you want to get interest on your deposits, or
- you prefer a bit more selectivity in terms of altcoins,
then C2CX might be a better choice.
For traders fitting this profile, C2CX’s combination of high liquidity with low fees, responsive customer service, managed products and a simple account verification process can be a key part of a winning trading strategy.
C2CX trades are free to makers (traders who place orders which do not execute immediately) and cost only 0.1–0.15% for most pairs if you are a taker. Liquidity is amongst the best in the market.
Moreover, now you can move US dollars in and out at almost no charge. Deposits are free; withdrawals cost 0.1%. C2CX trades three stablecoins: Paxos (PAX) and USD Tether (USDT), both pegged to the US dollar at 1:1, as well as Dragoncoin (LONG/DRG), which is pegged to the Chinese Yuan at 1:100.
According to Coinmarketcap statistics, not including C2CX’s dragoncoin trading pairs at the end of November 2018 C2CX was ranked approximately number 69 worldwide in terms of volume.
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