If we believe that digital currency is the future of financial services, we must acknowledge the role of cryptocurrency exchanges. These platforms allow users to trade in digital currencies in exchange for assets in conventional fiat money or other cryptocurrencies. They also help in maintaining a strong circulation of digital money. Here’s a look at the 5 largest cryptocurrency exchanges in the world and the opportunities they offer.
1. BitMEX
BitMEX or Bitcoin Mercantile Exchange is one of the largest Bitcoin trading platforms operating at present. It had the highest trading volume as of February 26, 2018, in BTC/USD. It accepts deposits only in Bitcoin, which can be used to trade in various altcoins. Fiat currency transactions are not allowed on this platform. The exchange provides margin trading, with leverage of up to 100X on Bitcoin, in on-the-spot and futures markets as well. This is probably the largest leverage offered on any platform on Bitcoin.
Apart from the specialised financial transactions, such as margin trading, it also boasts a robust security system. The exchange has multi-signature deposits and withdrawal schemes, along with Amazon web services, to protect its servers. The trading platform is written in KDB+, which is a database used by major banks for high frequency trading.
The exchange is one of the few with an in-built TradingView charting feature. No fee is charged for deposits and withdrawals, except a minimum network fee for withdrawing Bitcoin, based on blockchain load.
On the other hand, the user interface is highly complex, and is not suitable for amateur investors. The platform also doesn’t allow US-based traders, which is a hindrance.
2. OKEx
OKEx was established in 2017, after the Chinese Bitcoin giant, OKCoin.com ceased its futures trading activities to focus on trading in the world of digital assets. The platform specialises in BTC and LTC futures. It offers trading on margin, with up to 10X or 20X leverage. The trading fee is low, at 0.03% per transaction for open positions and no fee for closed positions. There are multiple cycles for easy hedging and arbitrage, and they maintain strong liquidity in BTC/USD and LTC/USD. The exchange is available for iOS, Android, Mac OS X and Windows platforms.
Security is an issue for this exchange. In October 2017, there were reports of hacking and funds being stolen. The team, however, clarified that they stopped the hackers in time.
3. Binance
Binance, launched in 2017, has a huge number of altcoins listed on its platform for trading. Currently, they have almost 242 trading pairs, including some of the newly launched coins. Its high transaction speed and availability in multiple languages are behind its popularity. It also offers its own crypto token, BNB, which gives discounts in trading fees. The trading fee is, however, not high to start with. The platform lets its community have a say in the introduction of any new coin. The verification process is simple and straightforward, and security is solid, with 2-factor authentication in place. There have been no reports of any hacking so far.
However, the website doesn’t provide much information about fund security and customer service. There is also no prospect of funding the accounts in fiat currencies. The website is originally in Chinese and can only be partially translated to English.
4. UpBit
This platform was launched by the famous messaging app developer of Korea, Kakao, in 2017. UpBit trades currencies via the Kakao stock platform, built on the Kakao talk messenger. Over 120 cryptocurrencies are listed on the platform, as well as the South Korean Won (KRW). The exchange provides high liquidity in most trading pairs. There is no fee for deposits, while withdrawal fees are very low.
The exchange is, however, intended only for Korean nationals. The platform doesn’t allow margin trading in cryptocurrencies. There is also a requirement of a certain minimum order size.
5. Huobi
Based in Beijing, China, this platform was launched in 2013. It boasts high trading volumes for a good number of trading pairs. Margin trading is available for both BTC and LTC, with 5X leverage and a low transaction fee of 0.1%. The flash trade function enables real-time trading and has features like order book, chart index and market chart incorporated. The UI is easy to use. Security is robust, with a 2-factor authentication, SMS and email notification, and PGP encryption for e-mails. They offer 24-hour support system, with a response time of 2 to 3 hours.
There is an elaborate fee schedule for transactions. The verification process is also quite lengthy, and the fact that the website is mostly in Chinese doesn’t help English speaking traders.
There are many players in the market and investors are spoilt for choice when it comes to platforms. The key to making a good choice is to first understand that there can be drawbacks in terms of security, technology issues and lagging customer services. The new entrants are focusing on providing solutions to these problems.
One such platform is Quifas, which is scheduled to launch its token sale on March 9, 2017. It has priced its QFS token at $0.40 and claims to be a next generation exchange with effective solutions to problems in the current platforms.
