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:
- 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.
- 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.
- 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.
|CEO:||Cameron Winklevoss, Tyler Winklevoss|
|Headquarters:||New York, New York|
|Founders:||Cameron Winklevoss, Tyler Winklevoss|
|Customer service:||+1 (866) 240-5113|
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.
|Headquarters:||San Francisco, CA|
|Founders:||Brian Armstrong, Fred Ehrsam|
|Customer service:||+1 (888) 908-7930|
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.
|Headquarters:||San Francisco, California|
|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.
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.
|Customer service:||Knowledge Base|
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.
|Founders:||Tristan D’Agosta, Dominick Petrovski|
|Customer service:||Support Resources|
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.
|Headquarters:||London, United Kingdom; Luxembourg|
|Founders:||Nejc Kodrič, Damijan Merlak|
|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.
|Founders:||Konstantin Gladych, Ilya Bere|
|Customer service:||Frequently Asked Questions|
Pros: Fast and simple to exchange cryptocurrency between one another.
Cons: Slightly higher fees than most exchanges.
|Founders:||Asaph Schulman, Nimrod Gruber, Martin Koelbaek, Guy Ben-Yossef, Yaki Oliel|
|Customer service:||Knowledge Base|
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.
|Founders:||Oleksandr Lutskevych, Dmytro Kalynovskyi, Victoria Polyakova, Peter Ivanov|
|Customer service:||Knowledge Base|
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.
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.