How Do Bitcoin Stock Markets Work

How To Buy Bitcoin Stock

A Comprehensive Guide To Bitcoin Stock Markets

What Is A Bitcoin Stock Exchange?

To understand how a Bitcoin stock exchange works it is essential first to understand what it is and what it entails.  A Bitcoin Stock Exchange is a website where people can freely buy, sell or exchange Bitcoins with other virtual currencies or traditional fiat currencies such as the US dollar, Euro or the British Pound. On a Bitcoin stock exchange, one can access real-time prices and trade against thousands of other cryptoassets and commodities.

For those willing to trade professionally, and have full access to various trading tools, you are likely to use an exchange that necessitates users to verify their identity and open an account. However, for other trading platforms, an account isn’t required especially for those who trade Bitcoins occasionally. Cryptoassets have an inherent advantage in their liquidity and trading volume profile because they are natively digital.

Types Of Bitcoin Exchange Platforms

There are three types of exchange platforms, namely:

  1. Trading Platforms – These exchange platforms provide a link that connects sellers and buyers, enabling them to transact while charging a small fee for every transaction made.
  2. Direct Trading – This trading platform offers a direct person to person exchange platform, traders from different nationalities worldwide can trade Bitcoins with each other. Direct trading platforms lack a fixed market price; instead, the seller sets this/her own exchange rate.
  3. Brokers – This is a Bitcoin exchange platform where a broker sets the exchange price. Bitcoin exchange platforms operated by brokers are similar to foreign exchange platforms run by dealers

Factors To Look Out For Before Joining A Bitcoin Exchange Platform

Just like choosing online Bitcoin betting sites, before commencing bitcoin trading, it is imperative to undertake a background check first of potential trading platforms you wish to start trading in. Below we have prepared a list of essential factors worth checking out before making your first trade.

The Platform’s Reputation – This is one of the surest ways of determining whether an exchange is reliable. You can get tonnes of reviews from different individuals or communities on various websites. You can also get answers by posting questions about an exchange platform on different forums such as Reddit or Bitcoin Talk.

  • Charges incurred on the Platform– Majority of exchange platforms indicate their fees and other payment-related information on their website. Before joining, it is vital to countercheck the various fees the exchange charges for deposits, transactions and withdrawals to avoid any hidden costs. These fees vary depending on the exchange platform you choose.
  • Available Payment Options– Every exchange platform provides customers with various payment options. Whether you prefer transacting via PayPal, wire transfer or debit/credit card, you should choose an exchange that has the payment option that comfortably suits your needs.
  • Verification Requirements – Majority of trading platforms require a user to provide some ID verification to make deposits or withdrawals. This verification may take a couple of days to process; however, it is essential for protecting users from scams or any form of money laundering
  • Geographic Location – Some exchanges require users to transact from a specific country to access their functions fully. Before trading verify if the exchange platform you want to join allows you to access all its features from the country you currently live in.
  • The Platform’s Exchange Rate – The exchange rate varies depending on various exchange platforms. This exchange rate fluctuates and can vary by up to 10%; therefore, it is wise to shop around and seek the best market rates available.

The Best Bitcoin Exchange Platforms

There are various Bitcoin exchange platforms to choose from; however, it is important to note that not all exchanges are equal and each has their advantages and limitations,

We have prepared a nonconclusive list of suitable and reputable Bitcoin stock exchange platforms you can trust.

1. Gemini

Gemini Exchange

Website: gemini.com

CEO:Cameron Winklevoss, Tyler Winklevoss
Headquarters:New York, New York
Founders:Cameron Winklevoss, Tyler Winklevoss
Founded:2014
Customer service:+1 (866) 240-5113

Owned by the Winklevoss Twins, Gemini boasts low fees and one of the cleanest user interfaces out of all the exchanges. The dashboard makes it easy for investors to view a snapshot of their holdings upon login. The platform allows you to purchase and sell Bitcoin, Ethereum, Litecoin, Zcash, and (soon) Bitcoin Cash with real-time market limit buy and sell orders. With Gemini, you have the computing power of Forex trading software with a simple, easy to use interface.

Transferring funds into Gemini is as simple as linking your bank account. Bank transfers and bank wires are completely free, although your bank may charge you a fee to wire money into your Gemini account.  In order to get started, you will need to be verified and accepted onto the platform. Apply now.

Pros: Ability to set real-time market limit orders. Great interface.

Cons: Exclusive to United States citizens.

2. Coinbase

coinbase logo

Website: coinbase.com

CEO:Brian Armstrong
Headquarters:San Francisco, CA
Founders:Brian Armstrong, Fred Ehrsam
Founded:2012
Customer service:+1 (888) 908-7930

Coinbase is one of the most well-known Bitcoin exchanges in the marketplace. For beginners and investors alike, Coinbase is a great platform to get your foot into the door with Cryptocurrency trading. The user interface is both colorful and accessible and there is even a mobile app available for Android and iOS. The platform incorporates both a marketplace alongside a constantly updating price ticker. Currently, users are able to purchase Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ethereum Classic and 0x.

Users can fund their accounts directly using bank transfers, credit card, debit card and even bank wire (Credit cards have a 3.75% fee applied). While bank transfers typically take a few days to complete, credit card and debit card transactions are nearly instant. Customers have the ability to withdraw or sell using PayPal.

You will need to upload a government-issued ID in order to prove your identity before being able to buy bitcoins. Sign up for this wallet and get $10 worth of Bitcoin deposit into your new wallet for free.

Pros: User-friendly interface. Established reputation.

Cons: Not available worldwide. Support takes time to respond.

3. KrakenKraken bitcoin exchange

Website: kraken.com

CEO:Jesse Powell
Headquarters:San Francisco, California
Founders:Jesse Powell
Founded:2011
Customer service:Knowledge Base

Kraken was founded in 2011 and is the largest Bitcoin exchange regarding total volume and liquidity; it is also an associate of the first ever cryptocurrency bank. With Kraken, it is possible to buy and sell Bitcoins and trade them with fiat currencies such as US Dollars, British Pounds, Canadian Dollars and the Japanese Yen.

You can also trade your Bitcoins with other virtual currencies such as Ethereum, ICONOMI, Litecoin, Monero, Ethereusm Classic, Zcash, Ripple, and Stellar Lumens. Kraken is also the best choice for professionals since it offers margin trading and other pro trading options.

Advantages: Respectable reputation, supported globally, has a myriad of useful features, reliable customer support, best exchange rates, and affordable transaction fees.

Limitations: Few payment methods, sophisticated UI, and complicated to use especially for beginners.

4. Bitsquare

Bisq - BitSquare

Website: bitsquare.io

CEO:Manfred Karrer
Headquarters:European Union
Founders:Manfred Karrer
Founded:2014
Customer service:Documentation

Bitsquare is a peer to peer exchange that allows users to buy and sell Bitcoins and exchange them for other altcoins and fiat currencies. Bitsquare is a decentralized exchange platform that can be accessed instantly and does not require any registration.

Bitsquare also doesn’t hold either customer’s funds or trader’s personal information. This exchange platform is highly secure and has an arbitrator system in case of trade disputes. If you value your security as a trader, then Bitsquare is the perfect Bitcoin trading platform especially if love remaining anonymous.

Advantages: Respectable reputation, supported globally, reliable customer support, high level of security, no registration required, and perfect for advanced traders.

Limitations: Few payment methods, unsatisfactory customer support, and not suitable for beginners.

5. Binance

Binance Logo

Website: binance.com

CEO:Changpeng Zhao
Headquarters:Taiwan
Founders:Changpeng Zhao
Founded:2017
Customer service:Knowledge Base

The Binance exchange is one of the best exchanges for experienced traders who want a premier cryptocurrency marketplace to view real-time prices. The platform has options for both beginner and advanced traders. With over 166+ cryptocurrencies available, traders have a myriad of options for performing real-time trades. The Trust Wallet is owned by Binance, which also provides users with an iOS or Android app to enjoy the platform anywhere.

For traders who specifically want to conduct crypto-to-crypto trading, the best available choice is Binance. The platform is extremely popular mainly due to its low trading fees. Although it is relatively new, it is growing rapidly and has a wide selection of altcoins.

On the Binance platform, trades have a general 0.1% trading fee.

Pros: High volume exchange. A large number of cryptocurrency pairs. Supported globally.

Cons: Few payment options.

6. Poloniex

Poloniex Logo

Website: poloniex.com

CEO:Tristan D’Agosta
Headquarters:Wilmington, Delaware
Founders:Tristan D’Agosta, Dominick Petrovski
Founded:2014
Customer service:Support Resources

Poloniex is ideal for those seeking a cryptocurrency trading platform with a large array of technical analysis tools. They offer a secure trading environment which provides advanced charts and data analysis tools for its customers. Those familiar with ForEx and stock trading will feel at home with the tools Poloniex offers. The margin trading feature gives traders the ability to set buy, sell and stop market limit orders. For those who want to view market prices, charts and buy cryptocurrency instantly on the go, Paxful has both an iPhone and Android app.

With over 100+ trading pairs, investors can trade among any cryptocurrency of their choosing. In order to encourage robust liquidity and tighter spreads, Poloniex employs a volume-tiered, maker-taker fee schedule. In order to provide the utmost security, Poloniex has a strict verification process for new users and tiered verification for those who want to increase their limits.

Pros: 100+ trading pairs. A multifunctional user interface for experienced traders.

Cons: Can be complicated for beginners and those new to market trading.

7. Bitstamp

Bitstamp

Website: bitstamp.net

CEO:Nejc Kodrič
Headquarters:London, United Kingdom; Luxembourg
Founders:Nejc Kodrič, Damijan Merlak
Founded:2011
Customer service:+1 (646) 568-9784

Bitstamp is a Bitcoin marketplace based in the European Union and has been around since 2011. Bitstamp is one of the pioneers of Bitcoin exchanges and comprises a vast loyal customer following. Bitstamp is the most trusted and popular Bitcoin exchange platform mostly due to its reliability and safety. It guarantees its customer’s maximum security by using a two-step authentication system and other features such as multi-signature technology for customers wallet and also an insured cold storage.

Bitstamp also offers clients 24/7 support and a multilanguage interface that can be used by everyone around the world. Setting up an account is relatively easy and free, and after making your first deposit, you can start trading immediately.

Advantages: Respectable reputation, supported globally, reliable customer support, high-level security, and affordable transaction fees.

Limitations: Few payment methods, and high deposit fees.

8. Changelly

Changelly Exchange Logo

Website: changelly.com

CEO:Konstantin Gladych
Headquarters:Malta
Founders:Konstantin Gladych, Ilya Bere
Founded:2013
Customer service:Frequently Asked Questions

Changelly is an instant cryptocurrency exchange which supplies the best live rates on the market for every pair. The interface is colorful and simple to manage, and transactions are performed instantly. The Changelly robot is integrated from the trading platforms of Poloniex and Bittrex. Since the platform is purely a cryptocurrency exchange, in order to complete a transaction on Changelly, you will need to provide both a sender and recipient address. Changelly is a great option next to Shapeshift as a seamless cryptocurrency exchange.

Changelly charges a low commission fee of 0.5% and offers the best available rate at the moment the transaction is completed. Read our full review here.

Pros: Fast and simple to exchange cryptocurrency between one another.

Cons: Slightly higher fees than most exchanges.

9. Coinmama

Coinmama Logo

Website: coinmama.com

CEO:Asaph Schulman
Headquarters:Slovakia
Founders:Asaph Schulman, Nimrod Gruber, Martin Koelbaek, Guy Ben-Yossef, Yaki Oliel
Founded:2013
Customer service:Knowledge Base

Coinmama specializes in selling Bitcoin and Ethereum for Visa and MasterCard credit card and debit card purchases and is one of the most popular exchanges in the world. The platform is supported in over 180+ countries and operates in most U.S. States (see restrictions here). Getting started with verification on Coinmama only takes between 5 and 15 minutes, and is a terrific way for beginners to buy Bitcoin, Ethereum, Litecoin, Ripple, Bitcoin Cash or Cardano quickly and securely. They also have a fast and responsive customer support team.

Credit card and debit card transactions incur a 5% processing fee added on after choosing a method of payment. SEPA bank transfers have a 0% fee.

Pros: Great for large transactions. Excellent leadership and customer support. Fast and secure transactions.

Cons: High fees when purchasing with a credit card or debit card.

10. CEX.IO

CEX.io logo

Website: cex.io

CEO:Oleksandr Lutskevych
Headquarters:London, UK
Founders:Oleksandr Lutskevych, Dmytro Kalynovskyi, Victoria Polyakova, Peter Ivanov
Founded:2013
Customer service:Knowledge Base

CEX.IO is a multifunctional cryptocurrency exchange that is trusted by millions of users worldwide and allows users to buy bitcoin with a credit card. The exchange is simple to get started on and boasts an easily navigable user interface. CEX.IO boasts multiple payment options, 24/7 customer support, and proven platform stability. There is also a mobile trading app for the CEX.IO exchange platform which is available on both iOS and Android.

The platform charges between a 0% to 0.25% fee on each transaction (fee schedule), while credit card purchases are charged a 2.99% commission.

Pros: Simple credit card purchases. Low fees. Clean user interface.

Cons: Long verification process.

Conclusion

The above list is non-conclusive, and there are other trading platforms available that have been reviewed in depth by other sites such as HitBTC and CampBx. With up to more than 60 trading platforms, there is a vast selection to choose from, however, a wise trader should do his/her homework before commencing a trade and weigh various features such as fees, trading features, liquidity, etc, to enjoy the full perks of trading Bitcoins.

P.S. If you want to sit back, relax and learn more about Bitcoin and other cryptocurrencies then you can view our full bitcoin documentary guide here.

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