5 Best Cryptocurrency Exchanges | Investing

In recent years, cryptocurrency has transformed from a niche, speculative market to a mainstream asset class. Even billionaires like Ray Dalio and Paul Tudor Jones allocate a small portion to crypto, underlining its growing significance. For many, cryptocurrencies serve as an inflation hedge, a speculative asset and a means to diversify portfolios.

However, compared to highly regulated and monitored stock exchanges, crypto exchanges are a virtual Wild West. The terrain is riddled with pitfalls – hacks, frauds and regulatory battles. In the wake of the FTX fraud, exchange security becomes even more important.

So whether you’re buying and holding or actively trading, picking the right crypto exchange is not to be taken lightly. To help you with that, here are five of the best crypto exchanges, for traders and investors alike:

Coinbase Global Inc. (ticker: COIN) is a behemoth in the crypto world, being one of the largest and most well-known exchanges, ranking as the second-most liquid exchange according to CoinMarketCap. Coinbase is as close as you can get to the New York Stock Exchange in the crypto world.

Prizing regulatory compliance, Coinbase operates even in strict jurisdictions, such as New York. Underscoring its adherence to regulations, it stands as the only publicly traded crypto exchange, accessible via the ticker COIN.

With its user-friendly and streamlined design, Coinbase is the best choice for the casual investor looking to dip their toes in crypto. Coinbase facilitates trading of mainstream tokens like Bitcoin (BTC) and Ethereum (ETH), as well as many more obscure altcoins like ApeCoin (APE) and Quant (QNT).

However, the stellar reputation and user experience come at a price. Coinbase’s fee structure leans to the steeper side, especially for smaller trades. Additionally, advanced traders might feel cramped by the basic trading platform and narrower list of offered tokens compared to competitors.

But there’s a light at the end of the tunnel for the most active traders. Coinbase became the first U.S.-regulated exchange greenlit to delve into crypto derivatives like perpetual futures – a favorite tool of sophisticated crypto traders.

With its stalwart status in the crypto industry and promising product launches, it’s little wonder Coinbase stands out as one of the best cryptocurrency exchanges.

Crypto.com is a dominant player in the crypto world, particularly for novices who prefer a Robinhood-esque mobile app. With a wide list of cryptocurrency offerings and an AAA security rating from Crypto Exchange Ranks (CER), a crypto security watchdog, the platform is a compelling choice for casual crypto investors.

One of the platform’s signature offerings is its prepaid Visa card. This unique feature allows users to garner rewards through “staking” – a mechanism where one commits their cryptocurrency to the platform to earn rewards. These rewards translate to up to 5% on purchases and other perks like Spotify and Netflix subscriptions as well as airport lounge access.

For those in the U.S., the scope is limited to the Crypto.com app. Through the app, users can purchase, store and stake their digital assets. While the company does offer a comprehensive exchange and more advanced trading tools, it’s currently exclusive to U.S. institutional clientele.

But, the company is not without its problems. Notably, it has faced scrutiny in the crypto community for its underwhelming customer service – a sentiment echoed on Twitter and Reddit. Furthermore, the company faced a security breach in 2022, resulting in the theft of 4,600 Ether tokens. While the company quickly reimbursed impacted customers, such events can shake investor confidence.

For those seeking a simplified platform with a broader coin offering than Coinbase, Crypto.com emerges as a potential option.

Since its inception in 2011, Kraken has established itself as a cornerstone in the cryptocurrency industry. Standing alongside Coinbase as one of the most regulation-compliant exchanges, it has earned a solid reputation, especially among seasoned traders.

Through Kraken Pro, its advanced trading platform, traders gain access to tools like candlestick charts, market depth, advanced order types, short selling and more. All of this comes with a competitively aggressive fee structure, making it one of the more attractive offerings for agile traders.

A standout achievement in Kraken’s 12-year history is its impeccable security record. Unlike many of its peers, Kraken has never been compromised by a hack. This accomplishment is underscored by its AAA rating from CER.

While Kraken may not offer as much to the casual “buy and hold” crypto investor as platforms like Coinbase do, U.S.-based day traders should consider Kraken as their exchange of choice.

Founded by the Winklevoss twins, Gemini is one of the only crypto exchanges that is available in all 50 U.S. states, including the regulatory minefields of New York and Hawaii, which require far more oversight. A key pillar of Gemini’s offerings is its commitment to security, marked by its provision of digital asset insurance on user funds.

The exchange’s diverse product range offers a glimpse into various corners of the crypto market. Between its primary crypto exchange, non-fungible token marketplace, staking program, and even a crypto-rewarding credit card, the platform aims to serve almost every crypto need.

A noteworthy distinction for Gemini is that it still offers staking to U.S. clientele, whereas rivals like Kraken and Crypto.com have paused their stateside staking programs. Gemini’s staking works similar to a certificate of deposit (CD) at a bank. Users accrue interest by temporarily securing their crypto assets with the exchange.

However, investors should be cognizant of Gemini’s fee structure, especially for smaller trades. For instance, a transaction ranging between $50 and $200 via the web interface incurs a $2.99 commission. But one can reduce fees by using Gemini’s ActiveTrader segment that offers more competitive fees.

Overall, Gemini is an excellent way for the crypto-curious to interact with multiple facets of the crypto ecosystem all within one exchange.

Binance.US is the American counterpart of the globally dominant Binance, the world’s largest cryptocurrency exchange. While the international exchange is the go-to for numerous professional traders, owing to its competitive fees, unparalleled liquidity and wide product listing, it remains off-limits for U.S. residents due to lack of U.S. government regulation. This very gap led to the creation of Binance.US.

A standout feature of Binance.US is its commission-free trading on Bitcoin, irrespective of the trade volume or size. This is particularly significant considering that many platforms levy steep fees for minimal crypto purchases, sometimes as high as 5% of the trade value.

Further enhancing its appeal, the exchange touts a staking program with market-leading rates, an advanced trading platform and a user-friendly app echoing the simplicity of Venmo for peer-to-peer crypto transactions.

But, there’s reason to be skeptical of Binance.US. The firm is entangled in legal confrontations with regulatory bodies like the Securities and Exchange Commission and Commodity Futures Trading Commission. Moreover, Changpeng Zhao, Binance’s CEO, often finds himself at the receiving end of critical scrutiny from legislative entities and voices within the crypto community.

The platform boasts impressive offerings, but investors should exercise caution with a cryptocurrency exchange under significant legal scrutiny, especially after the 2022 FTX fraud.