Cryptocurrency exchanges are the websites or apps where you can buy and sell digital assets. They provide convenient and safe on-ramps to the cryptocurrency network. They also allow crypto buyers to sell their holdings for fiat such as U.S. dollars. From there, those dollars can be transferred to a bank.
There are many trusted exchanges today but due to the complexity and differences of the cryptocurrency market, many investors remain skeptical. This is in large part because your average stock broker doesn’t support cryptocurrencies. People have become accustomed to the traditional investment pathways and therefore crypto’s deviation is met with doubt.
Fortunately, much of this fear and uncertainty isn’t necessary. This is illustrated in the Coinbase IPO being valued at nearly 100 billion and staged to break records. Cryptocurrency has become a thriving market with massive growth. There are many established players with known CEOs that serve a very public role.
As you begin to research the top players among crypto exchanges, you find credibility and strength throughout. AUM or assets under management is easily auditable and many exchanges are now home to billions of dollars in digital assets. This shows the trust the community has placed in their ability to maintain profitable businesses and survive what has been a volatile crypto market.
Here’s our list of the best cryptocurrency exchanges:
#1 – Voyager
Voyager was one of the first companies to go public among crypto exchanges. They were listed on the Canadian Stock Exchange in February 2019 and this greatly increases their promise as a long-term contender with a high level of trust. With crypto regulation looming and becoming more likely, going public illustrates transparency and provides a higher ceiling for growth.
Voyager is also the only company in our list with commission free trading. They have no fees on buys or sells on the platform.
This fee-free concept is similar to what we see sweeping traditional stock brokers after free competitors like Robinhood forced their hand. It’s easy to foresee how Voyager could force similar action among exchanges in the cryptocurrency markets.
Smart Order Routing
You may have heard the saying before “if it’s free, you are the product.” This refers to companies like Facebook where using it is free but the data they collect from you has value which they use to earn ad revenue.
Voyager works a bit differently with ‘smart order routing.’ By connecting to over a dozen exchanges and market makers, Voyager routes your order through the best priced solution. In doing so, they offer investors unparalleled speed, liquidity and pricing from their app.
In a sense, Voyager is not an exchange itself. It connects you to a network of exchanges so that you can get the lowest price.
This is how Voyager is able to make money. Their system updates prices in real-time with the most up-to-date data from the exchanges. However, since crypto prices move incredibly quickly, that split second between the listed price and your click of the order button could result in slight differences. When this happens, Voyager pockets that difference.
There are virtually no other exchanges with smart order routing and some competing exchanges pocket the above mentioned difference while style charging a commission free. Voyager has been generous enough to transparently use this as their business model and create an honest and scalable platform that’s free.
Earn Interest on Assets
A review of the top interest bearing wallets such as BlockFi or Nexo will reveal the true shining star – Celsius. They support more coins, pay higher interest rates and have a token powered loyalty program. The CEL token has been one of the best performing digital assets since the company was created.
Most exchanges that offer interest require a lockup of your coins or cap the interest you can earn. Unsurprisingly, Voyager has chosen Celsius as their interest provider and that means they offer the best of both worlds.
Celsius enables Voyager to offer interest on assets while maintaining your ability to actively trade. There are no lockups on your coins and no limits on how much interest you can earn. When you maintain a minimum monthly balance for a given coin, you will earn interest while simultaneously being able to buy and sell.
Voyager has chosen not to take a cut from the interest. For most coins, you get the full amount you would earn at Celsius for your assets on Voyager. You can view the full list of interest rates as of April, 2021 here:
Thanks to Celsius and other interest paying APIs they support a wide range of digital assets. Many of these are top defi and other alt coins. Voyager helps guide new investors by clearly showing which coins have strong institutional demand and pay the highest interest rates.
Invest in the Voyager Token
I love when great companies choose to provide more value to their community. In the crypto world, this is best facilitated through the availability of a token.
Many crypto exchanges have unfortunately chosen not to go this route. As we see with companies like Coinbase, most of the value is being provided to their early investors. By going public they give these already wealthy investors the best return.
Voyager has chosen the moral high ground. They have a cryptocurrency of their own, the Voyager token, which has strong tokenomics due to the company’s loyalty program and the perks it offers. This is mainly in the form of earned interest but the company’s roadmap illustrates other opportunities are coming down the pipeline for token holders.
By investing in the Voyager token you can benefit from the value of the company regardless of your status as an investor. You don’t have to be wealthy or accredited. Buying their token is easy once you have an account.
#2 – Gemini
Founded by the Winklevoss twins, Gemini is a quality exchange with a not so great mobile app.
Fortunately, they have a web app as well which works much better. They have been forward thinkers with active trading tools, a credit card with 3% back in Bitcoin and a feature for cryptocurrency payments.
Gemini does have fees which are comparable to Kraken and Coinbase. Depending on the order amount you will pay anywhere from $0.99 to 1.49%. To pay less, their ‘ActiveTrader’ upgrade will lower the fees significantly. This is a significant disadvantage to Voyager which has no fees by default.
Gemini ranks #2 on our list because they are one of the few exchanges to bring safe interest to their platform with Gemini Earn. Interest bearing wallets are something we strongly support and believe will become more common in the industry.
Gemini Earn pays up to 7.4% APY with no lockups. However, the program does require that your assets are moved to a separate wallet specifically for earning interest. Should you want to redeem your crypto and its earned rewards there is a procedure for doing so. This makes assets using the earn feature not eligible for active trading.
Additionally, the redeem process is inconsistent and for some assets can take several days. If you wanted to sell an asset quickly this could block your ability to do so.
Gemini has trusted ownership but their fees and earnings redemption process is subpar.
#3 – Kraken
Kraken refers to itself as the most trusted crypto exchange and at close examination their superior security features may very well make them the safest.
Using geographically distributed cold storage, 95% of all cryptocurrency deposits are kept offline. This is backed by full reserves allowing users to withdraw at anytime. Similarly, Kraken goes to extreme lengths to protect their server hardware by placing their nodes in secure cages with constant surveillance, armed guards and video monitoring.
This is all pretty impressive. Should Kraken decide to partner with Celsius and offer industry leading interest they could easily secure our #2 spot. For now, Kraken provides staking rewards on assets that support it such as Polkadot, Cosmos, Ethereum etc.
Kraken also stands out when it comes to margin and leveraged trades. These are tools typically used by experienced traders and are not beginner friendly due to the increased risk.
Margin allows you to take out loans up to $500,000 in value and use that money to invest. This enables trading at higher dollar amounts than what you have in your account balance.
Leveraged trading allows you to go long or short on a cryptocurrency with leverage up to 5x. For instance, if Bitcoin increases by 5% and you’re leveraged 5x long, you could earn as much as 25%.
Margin and leveraged trades are not to take lightly. Your cryptocurrency portfolio can be liquidated if the market doesn’t perform well and your trades start losing money. However, for professional day traders these are needed resources and Kraken is among the best.
Keep in mind, Kraken does charge commission on trades at 1.7% plus an additional $0.10 for online bank transfers. Signing up for Kraken Pro can significantly lower these fees to rates that are competitive with the paid accounts on Gemini and Coinbase.
#4 – Coinbase
As one of the first to simplify the buying and selling of cryptocurrencies, Coinbase is the biggest and most popular exchange.
Coinbase provided a trusted means to manage a crypto portfolio, setup recurring buys and store funds with vault protection. Similar to Kraken, 98% of digital assets are stored offline in a safe cold storage solution. With their early arrival to the space and emphasis on security including insurance coverage, Coinbase has captured a large share of the market.
As cryptocurrencies were growing into what they are today, Coinbase was there for the new investor. They offered tips, tutorials and market updates that helped beginners better understand what blockchain was and why it was worth investing in.
This secures Coinbase’s place on any top exchange list for as long as they remain in the industry. They played a truly important role in the early days of cryptocurrencies.
If you’re considering Coinbase keep in mind they do have fees. They charge a $0.99 fee on transactions of $10 or less up to $2.99 for transactions of $200 or less. For anything over $200 the fee is 1.49% of the transaction. Should you upgrade to Coinbase Pro, the fees are comparable to paid accounts on Gemini and Kraken.
#5 – Binance
You may have heard the Binance horror stories and are wondering why we would include them in the list? While it’s true that there are many customer service complaints against Binance, they do provide access to a large number of coins with some of the lowest transaction fees behind Voyager.
If you don’t plan on keeping assets on-site for long, Binance can be a convenient place to buy and transfer to another wallet.
Customers typically have problems with Binance when there’s an account issue such as a security concern. This could be a deposit from a bank account that is not in your name or a withdrawal overdraft. These scenarios have been known to trigger Binance’s security features which can lead to a locked account or funds.
Getting this resolved has proved to be difficult for many. Their customer support is lacking. Email and support tickets are the only available means of contact and Binance has been known to close tickets irresponsibly, take long periods of time to respond and make it difficult for customers to resolve their issues. If we believed this was intentional we would not recommend them but it’s the reason Binance is last on our list and should be used at your own risk.
Some of these security constraints are due to KYC or ‘Know Your Customer’ laws and the intense regulation coming down on crypto exchanges. However, we believe when you’re in the business of handling money, support should be a top priority. This is specially true for a company reporting as much profit as Binance.
Where the exchange does shine is its low trading fees. They charge a flat 0.1% spot trading fee and for customers in a hurry they charge 0.5% for instant buys/sells. This makes them lower priced than most competing exchanges.
A Note on Other Wallets
The best place to store crypto long-term is somewhere you can’t sell it. If someone were to take control of your account on one of these exchanges, they would have the ability to sell your crypto or transfer it to another exchange. This could happen in a number of minutes.
Wallets like Celsius allow you to buy crypto, store it and earn interest without the ability to sell into fiat like U.S. dollars. If you wanted to sell an asset you would need to first transfer it to one of the exchanges above.
This makes Celsius a safer wallet for large holdings. In the event your account gets hacked there are security measures in place such as HODL mode where any outgoing transfers require a 24 hour process that notifies you of the move. Additionally, you have to whitelist withdrawal addresses. If you need to change a withdrawal address there is another 24 hour wait to do so. All of these measures help protect the customer and make your funds more secure.
Thank you for reading our review of the best cryptocurrency exchanges. If you know of another top exchange that you believe should be featured be sure to reach out.