March 21

Compare Cryptocurrency Exchanges – The 9 Things A Good Cryptocurrency Exchange Must Have

This article is accurate as of Mar 2021.

You are now more familiar with the case for cryptocurrency and the technology behind it. Therefore, you have decided to start investing in cryptocurrency. Where do you start? How do you begin?

Just in case you haven’t read about cryptocurrency and the comparison of cryptocurrency with fiat money, click here to find out.
And if you’d like to know the 3 main types of blockchains and their uses, click here to learn about them.

For stock trading and investing, you begin by selecting the right broker for you. Though you can use a broker to trade and invest in cryptocurrencies, I’d advise you to find the most suitable cryptocurrency exchange to invest and trade cryptocurrencies.

Why?

Brokers allow you to buy and sell cryptocurrencies. Most brokers also provide leverage as the main cryptocurrencies can be pretty costly. That’s where the benefits end.

On the other hand, there are many more advantages and benefits of buying cryptocurrencies through good cryptocurrency exchanges.

When you buy a cryptocurrency from a cryptocurrency exchange, you own your cryptocurrency. You can choose to shift it to another exchange or wallet or account for enhanced security, to earn interest, make payments, and more.

A cryptocurrency exchange is very different from a stock exchange. A cryptocurrency exchange works like a bank. This “bank” is open 24/7, 365.

Are you now convinced that buying and selling your cryptocurrencies on an exchange is superior than through a regular broker?

In this article, I’ll share the links to the cryptocurrency exchanges we will be looking at. I highly advise you to bookmark them as there are crooks who replicate the original websites with a different URL to steal your username and password.

Let’s dive right into the 9 things the exchange you choose must have to maximize your investment returns.

#1 Number Of Cryptocurrencies

This is one of the most important criteria. With new and exciting cryptocurrencies launched every month, you want to be able to get your hands on some of them before they become popular.

In this category, Binance International is the undisputed king. It has more than 340 cryptocurrencies. Many new cryptocurrencies are also listed on Binance International.

Kraken (and its Pro version) comes in 2nd with 62 cryptocurrencies.

If you decide to open an account with Binance International, click on my referral link here.

#2 Method Of Funding

Most exchanges allow you to fund your cryptocurrency trading account or wallet via a bank transfer, credit or debit card. Funding via credit and debit card is the most convenient method. However, convenience comes with a price. How much?

From 3%.

Imagine you want to buy half a Bitcoin (yes, you’ve read it right. You can buy a fraction of a Bitcoin and the same applies to many other cryptocurrencies). Bitcoin costs $58,000 at this point of time. Half a Bitcoin will cost you $27,500. Your credit or debit card transaction fee will be a whopping $825!

Is there a cheaper way to fund your account? Yes, through a bank transfer.

You’ll need to log in to your online bank account and add the bank details of the exchange to your list of recipients. Tip: copy and paste the bank details of the exchange and double check. If there is a typo error, your funds could be lost forever.

Transferring funds to Tokenize Xchange and Gemini Singapore require one additional step. You need to send funds in via Xfers first. There’s instructions on the website of Tokenize Xchange and Gemini Singapore so you won’t get lost. Please note that a small fee will be charged by Xfers.

Here’s the link to Xfer’s website.

To open an account with Tokenize Xchange, click here.

To open an account with Gemini Singapore, click here.

#3 Spread

Bid/ask prices of Bitcoin taken from Coinhako’s website

I’m referring to the bid/ask spread. The spread is the difference in the buying and selling price.

Eg. Bitcoin costs $58,000 now. The exchange tells you that the buying price for Bitcoin is $58,050. At the same time, the exchange tells you that the selling price of Bitcoin is $57,950. The spread is $100 ($58,050 – $57,950).

A spread is necessary as that’s one of the few ways cryptocurrency exchanges make money. Think of money changers.

Understanding what a spread is, you’d want the spread to be as tight as possible. Some cryptocurrency exchanges have a very tight spread even on pricey cryptocurrencies such as Bitcoin and Ether.

Binance International, Kraken (and its Pro version), and Gemini Singapore offer tight spreads.

Here are my referral links to Binance International and Gemini Singapore.

#4 Trading Fee

Who likes to pay more? Trading fees become significant in the long run too, so you’ll have to trim the fees to be as profitable as you can.

Binance International, Kraken (and its Pro version), and Tokenize Xchange are winners.

Fees are as low as 0.012% – 0.1% for Binance International, 0% – 0.26% for Kraken (and its Pro version), and 0.1% – 0.8% with a minimum of SGD1 for Tokenize Xchange.

The referral link for Binance International can be found here, while the referral link for Tokenize Xchange can be found here.

#5 Interest Bearing Account

Remember that cryptocurrency exchanges are like banks? This means that some cryptocurrency exchanges pay you interest for storing your cryptocurrencies with them.

I sense your skepticism. How much interest can you get in today’s low interest rates environment?

Hold your breath.

Interest rates can be as high as 17%! Here’s the proof.

Taken from Kraken’s website

But before you rush to transfer your wealth into cryptocurrency exchanges, there are a couple of things you need to be aware of:

a) Your money in cryptocurrency exchanges is not insured

b) Regulation in the cryptocurrency space is light and new

This means that you ought to be prudent instead of transferring your life savings to earn 17%.

Blockfi, Gemini Singapore, Kraken (and its Pro version), and Tokenize Xchange offer high interest rates. Binance International offers interest too, but the rates are often lower than those mentioned earlier.

Interested to create an interest bearing account? Sign up using my referral link to Blockfi here, Gemini Singapore here, Tokenize Xchange here, and Binance International here.

#6 Customer Service & Support

As a beginner, you may need to reach out to the exchange’s customer service officer for support. Hence, this is one area which you must not overlook.

Kraken (and its Pro version) offer 24/7 live chat. This is impressive given that its competitors are offering chatbots or email support.

#7 Ease Of Use

Some cryptocurrency exchanges are built to be intuitive to new users. The design and layout of the exchange is elegant. These exchanges are Blockfi, Coinhako, Gemini Singapore, Kraken, and Tokenize Xchange have a clean design.

Binance International and Kraken Pro are more comprehensive cryptocurrency exchanges which require time for familiarization.

Sign up using my referral link to Blockfi here, Coinhako here, Gemini Singapore here, Tokenize Xchange here, and Binance International here.

#8 Trading Volume

Binance International is the largest cryptocurrency exchange in the world. This isn’t surprising as it carries more than 300 cryptocurrencies, blowing its competitors away.

This also means that the daily trading volume in Binance International is the highest.

So what’s all this about? It is about liquidity. You will be able to buy and sell your cryptocurrency at the price you want fast. Spreads are likely to be low too.

#9 Mobile App

As the cryptocurrency market is live 24/7, you’ll want to be able to respond to price changes fast. The fastest way to respond to the market is by using your phone.

All the cryptocurrency exchanges mentioned in this article (Binance International, Blockfi, Coinhako, Gemini Singapore, and Kraken) have mobile apps except for Tokenize Xchange.

Which Cryptocurrency Exchange Should You Use?

#1 Binance International has the most comprehensive cryptocurrency offering. There are many functions which you’ll need to spend some time navigating. Hence, it is best for investing in alternate and smaller cryptocurrency coins (cryptocurrency coins that aren’t Bitcoin, Ether, ADA or DOT).

#2 Binance International is the largest cryptocurrency exchange by volume too. This ensures that you’ll get your desired cryptocurrency fast.

#2 If you live in Singapore and would like to deposit SGD, choose Coinhako, Gemini Singapore or Tokenize Xchange.

#3 Want to earn the most interest on your cryptocurrencies? Check out Blockfi, Gemini Singapore, Kraken, and Tokenize Xchange.

Referral links to the exchanges can be found by clicking on the links here: Binance International, Blockfi, Coinhako, Gemini Singapore, and Tokenize Xchange.

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