How does one define "best cryptocurrency trading platform"?
There are many factors that are relevant when comparing the best cryptocurrency trading platforms. This article shall make it easy for you to understand what is important, what makes an exchange the one of the best cryptocurrency trading platforms and what option there are for you to check out.
These factors may be liquidity, KYC (whether you need to submit your ID documents to the exchange), security and regulatory concerns, support, easy of use and how much you pay in fees per trade.
KYC may be important for some people since submitting ID documents to a company may raise privacy concern and factually doesn`t really prevent money laundering acc. to this study.
What are spot and futures exchanges?
What are spot and futures exchanges? In simple terms, a spot exchange lets you buy and sell the “real” asset, while a futures exchange lets you trade certificates on the future price of an assets.
In more detail a spot exchange is an exchange that always trades an asset at today`s price. Once you press buy or sell on a spot exchange you realize this asset at today`s price. A futures/derivatives exchange, however, let`s users trade instruments that are based on the future price of an asset. For example, there might be an instrument/contract called “quarterly” futures. This means that at the end of the given quarter that contract is going to be closed and replaced with another contract for the next quarter. All positions you and others have in that quarterly contract are closed when the contract expires and you have to take the profit/loss at the end of the contract.
To make it easier most exchanges, including those covered in “best cryptocurrency trading platforms”, offer perpetual contracts. This means that the contract has no expiration date. Another aspect to derivatives or margin trading trading is that you can trade with leverage.
What is leverage?
Leverage means that you can trade with more than you have in your balances. What you would normally consider “buying” is called “going long” or “longing” and sell is called “short selling” or “shorting”.
Who does that work?
Well, when you go long (e.g. with 10X leverage – meaning you trade with 10x your balance) you borrow 10 times your money. When the price goes up by 10% and let`s say you initially opened a 1 BTC x 10 LONG position, you wouldn`t make 0.1 BTC but 1 BTC – resulting in a 100% gain.
It works similarly when going SHORT. You sell your coins (plus, the coins you might have borrowed by using leverage) at the current price and when the price of the coin goes down, you buy it back lower and take the profit you made through that.
What are funding rates?
When you are using leverage – no matter which side of the trade you take – you are subject to funding rates. Funding rates are an instrument of the exchange to balance LONGs and SHORTs. In simple terms since you are basically borrowing money and if there are more open positions on your side of the trade (either LONG or SHORT), then you have to pay the other side of the trade a funding rate to balance both sides.
Of course all of this is taken care by the exchanges and you don`t have to worry about the details. On most exchanges, including all exchanges covered in “The best cryptocurrency trading platforms” you simply press buy or sell and choose your leverage – the rest is automatically taken care by them.
What are the risks?
Borrowing money and paying a little fee sounds too good to be true? Well, you are right. Because when the price goes the other way of your trade you are also losing money at the same velocity as you would gain money when the trade works out. Plus, since you are borrowing money you also have to pay it back. In order that you can never lose more than you have in your balance there is the concept of liquidations.
What are Liquidations?
Liquidations are an instrument for the exchange to ensure that all positions are never going below -100% – meaning there is never the chance for you to lose more than you have in your balance. When using leverage you are given a liquidation price. How this price is calculated is always a bit different from exchange to exchange because of the differences in fees, etc.
As a rule of thumb you can think of the example mentioned above. Going 10X long Bitcoin with a 1 BTC (X10) position. When Bitcoin was 10,000$ when you opened the position and rises to 11,000$ you can lock in a 100% profit of 1 BTC. However, if the price goes down to 9,000$ you are at -100% which means your position is liquidated and therefore lost forever. To counter that, stop-loss orders seem to be a great instrument to prevent these drastic outcomes.
The article “Best cryptocurrency trading platforms” features specifically derivative exchanges.
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Signing up via the link below will save you 10% on all trading fees on Delta.Exchange.
Delta.Exchange is a futures exchange offering both swaps and derivatives serving over 20,000 users. The exchange is based in Saint Vincent and the Grenadines and was founded in 2018. Their main focus besides Bitcoin is on altcoins. There are only a hand full of derivatives exchanges offering such a wide range of altcoins including LINK, BNB, LEO, ATOM, REN, WAVES, MATIC, EOS and many more.
Retail investors enjoy a great, clean user interface and enough liquidity to support average trade amounts. Larger institutional investors or trading desks may want to consider other exchanges in terms of liquidity.
As one of the best cryptocurrency trading platforms, Delta claims to have enterprise-grade security of your assets and the exchange. According to official sources, all assets stored with the exchange are kept in a cold wallet, meaning that all funds can not be accessed over the internet which limits the attack surface dramatically. Only once a day Delta opens a slot where users can withdraw funds.
Delta offers a great way to share your trades & positions on social media without revealing your position size or balances. All in all, Delta seems to be among the best cryptocurrency futures exchanges for an average retail investor.
No KYC required, except one of the following criteria applies:
> 2 BTC per day in withdrawals, Cumulative deposits exceeding 5 BTC, "suspicious" trading or withdrawal/deposit activity
Delta offers enough liquidity for most usecases. Retail investors and traders enjoy enough liquidity for their trades. Companies and institutions may want to consider other options.
At Delta you have 3 ways to get support. 1) via their help center, 2) via the official support forms and 3) via their active Telegram community with admins being online 24/7
Delta is comparably easy to use. There is a little understand necessary to use the exchange. The interface is similar to what you know from other exchanges.
Delta has 3 different fee tiers.
There is a maker fee (Limit Orders) -0.025%, a taker fee of 0.075% (Market Orders) and a settlement fee of 0.075%
This GIF walks you through the user interface of one of the best cryptocurrency trading platforms – Delta.Exchange and shows how to update an open position in their exchange.
Delta.Exchange is backed by a range of well-known VCs including Aave, Kyber Network and Coinfund. Delta aims to differentiate themselves by offering unique advanced products such as options on bitcoin and leading altcoins like Ethereum and Chainlink or interest rate swap contracts.
This screenshot gives an overview of the main trading interface. There are many different customization options – so best is you check it out youtself – here.
FTX also has its own token – FTX Token (FTT). It is a discount token similar to Binance Coin (BNB). It was created to finance the further development of FTX and at the same time to bind customers even more to their exchange. For example with 5,000$ worth of FTT you may recieve a 5% discount in trading fees.
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Signing up via the link below will save you 5% on all trading fees on ByBit.
ByBit.com – among the best cryptocurrency trading platforms – is a spot & futures exchange.
Bybit was founded in 2018 and is based in British Virgin Islands. Bybit`s headquarters are located in the crypto-hub, Singapore, with other offices in Hong Kong and Taiwan. The CEO is Ben Zhou, who previously worked in the Forex trading division at XM.
Acc. to ByBit they have more than 1.2 million users and regularly outperform competitors in user ratings with their excellent support
As one of the best cryptocurrency trading platforms, ByBit offers “spot” markets for Bitcoin and many other cryptocurrencies. The exchange allows you to exchange BTC, ETH, XRP, EOS and USDT via their swap feature on the assets page.
ByBit claims to keep all of its customers’ funds in cold wallets and thus meet the highest security standards. However, in general, as with other crypto exchanges, you are also recommended to only store credit with ByBit for as long as you use it for active trading. At other times, your personal hardware wallet is the safest place to store Bitcoin and Co.
ByBit is leading many rating as one of the best cryptocurrency trading platforms and is recognized as an established player in this field making it one of the cryptocurrency trading platforms.
There is no KYC on ByBit.
ByBit is among the most liquid derivative exchanges out there. Especially, since the regulatory troubles of Bitmex, it is likely that ByBit scraps liquidity from the large futures exchange.
ByBit leads with outstanding support. Their live-chat is reachable 24/7, the Telegram community is very active and helps out on general topics and specific issues are perfectly addressed by their live-chat or eMail support team.
ByBit`s user interface is trimmed down to exactly what is necessary. Together with their mobile app, you are covered for all usecases making it one of the best cryptocurrency trading platforms.
There is a flat 0.075 % taker fee (Market orders) and a 0.025 % maker fee (Limit orders) . This sets ByBit on top with others of the best cryptocurrency futures exchanges.
Trading derivatives often requires you to act quickly to limit losses or realize gains. Bybit.com takes this into account with mobile apps. The Bybit app is available free of charge for Android devices as well as for Apple’s iPhone and iPad. Learn more on ByBit.com.
ByBit also allows fiat deposits via their partner Banxa, however there are no fiat withdrawals. For depositing fiat there is an identification required with their banking partner.
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Signing up via the link below will save you 10% on all trading fees on Deribit for the first 6 months.
Deribit.com – among the best cryptocurrency trading platforms – is a Bitcoin & Ethereum -only futures exchange based in Panama with its headquarters in the Netherlands. Deribit is not only one of the best cryptocurrency trading platforms but also one of the oldest (futures) exchanges out there, being founded in 2014.
Deribit is an exchange that targets, besides retail users, also larger players and corporations making it one of the only derivative exchanges offering corporate accounts. (For which especially block orders – larger quantities – are especially interesting) There are also other pro-tools like position builder and a more complex and professional UI, however users are given the choice to choose between the normal interface and the pro-tools making it a good fit for everyone.
One unique thing about Deribit is that they are not only offering physically stteled contracts but also cash (USD) settled contracts, making you trade their contracts also with fiat and not only crypto. This may reduce your exposure to volatility.
Deribit is, among others, leading the race of professional oriented futures exchanges making it one of the best cryptocurrency trading platforms in the industry.
For unverified users there is a withdrawal limit of 1 BTC/day or 50 ETH. After verification there are no restrictions.
Deribit, one of the best cryptocurrency trading platforms, is among the most liquid derivative exchanges out there. Especially, their corporate products are especially interesting for larger players.
Deribit has surely great support for larger players and direct account managers. For normal retail investors there is a contact form and a blog. Definitely something that they could improve.
Deribit`s UI is definitely more targeted towards professionals, however, it is not impossible to enjoy a smooth experience with them. Pros will love it.
There is a flat 0.05 % taker fee (Market orders) and a 0.02 % maker fee (Limit orders) on futures markets. This sets Deribit on top with others of the best cryptocurrency futures exchanges.
Deribit, one of the best cryptocurrency trading platforms, claims to have <1ms execution time of trades on their exchange. It also offers options with up to 10X leverage besides their futures with up to 100X leverage. Like the industry standard suggests, 99& of the coins stored with Deribit are kept in cold wallets.
Deribit is not only oriented towards professionals but also integrated in various different pro-services such as Haasonline (cryptocurrency trading bot), FMZ Quant and Actant.
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Signing up via the button will help support this site and doesn`t cost you anything.
PrimeXBT.com – among the best cryptocurrency trading platforms – enables its users to trade all kinds of asset classes. Ranging from crypto, forex, commodities to stocks. All without KYC and with crypto.
As one of the best cryptocurrency trading platforms PrimeXBT is suitable for both beginners and professional traders. The, in popularity rising, exchange offers also demo accounts where users can try out their trading ideas and get their hands dirty without spending actual money.
PrimeXBT seems to be unregulated right now, however customer reviews indicate that there are no issues so far and most crypto exchanges are unregulated – including most of the exchanges on the list “The best cryptocurrency trading platforms”. Experts always advise to only store the absolute minimum on exchanges.
All in all, the broad variety of asset classes and the easy user interface makes PrimeXBT probably one of the best crypto trading platforms out there.
By default there is no KYC. However, when there are suspicious activities with your account PrimeXBT may ask for identification.
PrimeXBT works with 12+ liquidity providers and therefore ensures enough liquidity for retail investors. If you are trading large sizes consider using OTC desks or block orders.
PrimeXBT has for normal retail investors a contact form and a blog. Additionally there is a live chat available on the website.
PrimeXBT´s UI has improved over time and right now featuring a clean and easy to use UI.
Prime XBT has a flat 0.05% fee for Cryptocurrencies, 0.001% for Forex, and 0.01% for Indices and Commodities.
Disclaimer: Liquidary is not a financial advisor. Non of the content in the article “Best cryptocurrency trading platforms” shall be considered as financial advice. Always do your own research and talk to your financial advisor before making any decision. Liquidary is not accountable for any action you might take.