Best Alternative to Coinbase for Buying and Selling Bitcoin
Get the most from your money with one of these great Bitcoin exchanges.
If you are looking for the best alternative to Coinbase for buying and selling bitcoin then you might be surprised at just how many other great cryptocurrency exchanges there are out there. But a word of caution, these exchanges are unregulated so you should take care to try to find the most reputable one so you can be sure your money is really in good hands. This guide will cover the best alternative exchanges where you can safely buy and sell bitcoin.
Bitcoin took the world by storm in 2017. Though not actually the best performing cryptocurrency of the year in terms of increase in value, it still managed to increase from around $800 at the beginning of the year to $20,000 by the beginning of December.
While prices have since dropped back from these highs, bitcoin remains one of the most promising investment opportunities and mediums of financial exchange today. The main problem that the bitcoin currency faces is the lack of merchants who will accept it. Fortunately, for the time being, people can still buy and sell bitcoin through currency exchanges like Coinbase.
As one of the most popular bitcoin exchanges on the planet, Coinbase allows people from a list of countries around the world to trade in bitcoin using their home country’s fiat currency. The process is simple; people use a payment method such as a credit card to exchange a fiat currency for bitcoin. Once they have set up a currency wallet they are free to buy and sell as many coins as they wish.
Before you rush for your wallet to start buying bitcoin here are a few risks related to using digital currency exchanges:
Bitcoin Exchanges: The Risks
• Cryptocurrencies like bitcoin are extremely volatile. The price can go down just as fast as it goes up. Traders risk losing their entire investment, so please invest cautiously. Do not invest money you cannot afford to lose.
• Bitcoin exchanges are completely unregulated. This means that you have very little in the way of legal backup should you need it. This can also mean that exchanges don’t put the interest of their customers first and may even take part in practices such as insider trading.
• Bitcoin exchanges are increasingly subject to attacks by hackers. In some cases, exchanges have been hacked and had vast amounts of bitcoins stolen. For example, Mt. Gox had 850,000 bitcoins stolen and only 200,000 were ever traced.
• Exchanges can and do go bust. Several bitcoin exchanges have gone under over the last few years. While Mt. Gox is the biggest profile bankruptcy, Seoul-based Youbit went bust just a few months ago. If an exchange goes bust then it is likely you will lose some if not all your money.
Why is Coinbase so popular?
Coinbase is the largest cryptocurrency exchange in the USA today. Ever heard the expression that there is safety in numbers? Well, when it comes to currency exchanges this is definitely true. As of August 2017, Coinbase was valued at over $1 billion and managed to raise $100 million in capital.
High trade volumes mean that Coinbase not only generates the revenue to help keep it out of any trouble but also gives it enough control over the value of bitcoin that it can actually help prevent a run on the price of bitcoin. Several times over the last year or so, Coinbase has actually suspended trade in bitcoin, something which has helped the price from crashing.
Another huge bonus to Coinbase is that it is headquartered in San Francisco, California. This means that the company is liable to U.S trade laws and therefore means that it is bound to act in an ethical way. Coinbase also allows its users to buy and sell other altcoins like Ethereum and Litecoin. Users can do this via their website or via the Coinbase app.
Finally, Coinbase has worked hard to establish a solid trustworthy reputation within the industry, even warning bitcoin investors to buy sensibly during a recent spike in prices. Coinbase is a company with an eye on the future and definitely is not a here today gone tomorrow kind of exchange.
Things that make a great Bitcoin exchange:
• Reputation: Word of mouth is the best advertising going. If an exchange is doing its job properly, its feedback and reviews should reflect this. If you are not sure try heading to forums like Reddit and posting a question. You will receive plenty of information that will definitely let you get a good idea of which exchange is best.
• Fees: Before you sign up to an exchange you should always check to see what their fees are. Some exchanges will be cheaper than others so you should check each one before you make a decision. Coinbase, for example, has higher fees than most others.
• Country restrictions: Most exchanges can only be used in a small number of countries. Coinbase can only be used in 32 countries at the present time, for example. Check to make sure that the exchange you want to use allows people in your country to do so.
• Exchange rate: Just like fiat currency exchanges, each bitcoin exchange offers its own rate. Spend some time to check the rates to find the best one. This could save you quite a bit of money as they differ by up to 10% in some cases.
• Payment Methods: If you are looking to buy bitcoin with money in your PayPal account then you will need to find a PayPal friendly exchange. While most accept Visa and Mastercard, the fees to use these are usually higher than a bank transfer for example. Check out the range of payment options available with each exchange before you join up.
• Good security: While it is possible for any site to be hacked, finding one with a strong eye on security is a must. The site should have a thorough verification process that requires some form of ID to verify your identification. Verification helps the exchange guard against fraud and other such illegal activities.
Top Alternative Bitcoin Exchanges to Coinbase
1. Bittrex
Bittrex is an exchange that is based in the U.S. As a result, it is required to abide by all U.S laws relating to currency exchange while the owners are also liable under U.S law for any illegal activities. This makes Bittrex a much safer option in an as yet unregulated industry.
The exchange currently supports over 190 currencies making it one of the world’s leading exchanges. Transactions are quick and reliable while its user interface is really simple and easy to use.
Pros:
• U.S Based Exchange
• Allows trading in numerous cryptocurrencies
• Reliable transactions
Cons:
• High trading fees of 0.25%
• No Margin trading
2. Kraken
Kraken is another U.S based exchange despite actually running its operations out of Canada. As the world’s largest exchange, in terms of euro volume and liquidity, it is a relatively safe option for traders. That said, due to Kraken’s prominence the site has been the subject of numerous cyber-attacks in recent years. Though these have so far only caused a disruption to its service, the increasing frequency of these attacks on the exchange is a concern.
The exchange supports Bitcoin, Ethereum, Ethereum Classic, Monero, ICONOMI, Augur REP tokens, Litecoin, Dogecoin, Zcash, Ripple and Stellar/Lumens. At the present time, users can buy and sell coins in US Dollars, Canadian Dollars, British Pounds, Euros and Japanese Yen.
Pros:
• Large U.S based Exchange
• Allows Margin Trading
• Good exchange rates
• Low transaction fees
• Global customer help support
Cons:
• The site has been subject to large-scale cyber-attacks.
• Limited number of fiat currencies accepted
3. Gemini
Based in New York, Gemini was founded by the first bitcoin billionaires, brothers Cameron and Tyler Winklevoss. It is a fully licensed bitcoin exchange that secures all deposits in an FDIC-insured bank. Gemini is arguably the most secure and trustworthy bitcoin exchange thanks to state of the art security measures that include cold storage of its digital currency deposits.
Despite being available for use in the U.S, Canada, UK, Hong Kong, Japan, South Korea and Japan, Gemini only allows for trade in three currencies: USD, Bitcoin and Ethereum. The exchange is really designed to appeal to traders thanks to its low transaction costs and free deposits and withdrawals.
Pros:
• Very secure exchange
• Fully compliant with U.S laws
• Low Fees
• No deposit/withdrawal fees
Cons:
• Limited currencies
• Only available in 7 countries
• No margin trading
4. CEX.io
CEX.io actually began life as a London based bitcoin miner back in 2013. Since then it has shifted its operations to the U.S and morphed into a full-blown cryptocurrency exchange. The exchange supports Bitcoin, Bitcoin Gold, Bitcoin Cash, Ether, Ripple, Dash, and Zcash at the current time.
Users can buy coins in USD, EUR, GBP and RUB and trade for a 0% to 0.2% commission depending on what kind of purchases they make. The user interface is really intuitive and so is easy to use even for beginners. The exchange allows margin trading for professional traders and also has a handy brokerage service which allows traders to buy and sell coins at the market rate.
Pros:
· U.S Based Site
• Supports the main cryptocurrencies
• Low Fees
• Good exchange rate
• Worldwide support
Cons:
• Higher deposit fees
5. Bitstamp
Bitstamp is a bitcoin exchange that is based in Luxembourg. Founded back in 2011, it is a well-respected and much-loved exchange due to its excellent customer service and a good reputation for security. It was one of the first to utilize cold storage and incorporates a number of other security features such as two-step authentication, custom software for protecting accounts, and a wallet protected by Multisig technology.
The exchange allows trade in US dollars and allows deposits to be made through the European Union’s Single Euro Payments Area. This helps speed up the process of transferring money between banks in the Eurozone area. Currencies currently supported include Bitcoin, XRP, Litecoin, Ethereum and Bitcoin Cash.
Pros:
• Well respected site
• Low transaction fees
• Good exchange rate
• Good security
• Worldwide support
Cons
• Limited number of fiat currencies accepted
• Limited number of payment methods
• High deposit fees
6. Poloniex
Poloniex is another large U.S based cryptocurrency exchange. It has a solid reputation within the Bitcoin trading community for its low fees and good security. Fees are typically 0% to 0.25% meaning the exchange is cheaper than many of its main competitors. There are no deposit or withdrawal fees making the exchange a good option for those people looking to use cryptocurrency as a viable alternative to fiat currencies.
Currently, Poloniex supports bitcoin and numerous other altcoins. A good user interface makes this exchange very user-friendly while its handy Chatbox feature allows its users to immediately get advice on whatever query or problem that they may have. Another really great feature is the site facilitates bitcoin lending which allows users to loan other users currency to trade with under the protection of the site.
Pros:
• Respected site
• Low transaction fees
• Good interface
• Margin trading accepted
• Chatbox
• Bitcoin lending feature
Cons:
• Poor customer support outside the Chatbox feature
• No fiat support
• No advanced technical analysis tools
7. Binance
Thanks to being partially funded by a highly successful ICO, Binance has been able to keep its transaction fees very low. It is a Hong Kong-based exchange that has managed to so far avoid recent Chinese crackdowns on cryptocurrency exchanges due to it being registered in a different country. This situation is a slight cause for alarm, however, as it could change rapidly in the future.
Like Poloniex, Binance does not support any fiat currencies meaning that users must buy bitcoin elsewhere first in order to trade on this exchange. For small-scale bitcoin investors this can be a real nuisance but for large-scale traders the exchange offsets this problem with low transaction costs. There is a flat rate fee of just 0.1% on all transactions, no matter what the volume.
The exchange supports all the other major altcoins and features a really great user interface that is loaded with great analysis tools and graphs.
Pros:
• Low transation fees
· Good rate of altcoins supported
· Good user interface
Cons:
• Need to buy bitcoin elsewhere to use this exchange
· Based in Hong Kong so subject to Chinese crackdowns
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