When you start exploring the cryptocurrency market, you’ll probably be overwhelmed with the amount of new information and data. Various platforms, charts and tools might not make much sense to you at first glance, but in reality, there is a clear logic behind it all. To develop an understanding of it all, simply start examining the main aspects of the crypto market, one step at a time.
In this article, we will try to explain how the crypto market operates and its primary mechanisms.
So let’s get started!
How does a cryptocurrency exchange work
A cryptocurrency exchange is a platform where you can check, compare prices and exchange one crypto coin to another. It also allows you to trade for other assets, such as conventional fiat currency, like USD, EUR, JPY.
From a technical point of view, the crypto exchange is an application or a web page where algorithms for accepting and withdrawing funds are implemented, as well as a built-in exchange of cryptocurrency and/or fiat currency.
There are currently more than 280 exchanges on the market, but many of them are not big or reliable enough to conduct safe and comfortable trading. The main differences between the various exchanges are the number of active users, trading volume, amount of traded cryptocurrency, deposit and withdrawal fees, and if there is a possibility of direct exchange for fiat currency.
List of crypto exchanges sorted by volume (2019)
There are 3 volume types in a cryptocurrency exchange:
Adjusted Volume – Volume from spot markets with a percentage fee type (excluding markets with no fees, transaction mining, and other trading incentives).
Reported Volume – Total volume directly from exchanges through their API without interference. It’s usually bigger than adjusted volume.
Reported Volume Liquidity – this definition shows a comparison between reported volume by exchanges and real liquidity based on order books.
The list of the best exchanges in 2019 will vary, depending on which parameter you choose.
We prefer to work with Reported volume Liquidity for a better understanding of the specifics of the order book on the crypto exchange.
Top cryptocurrency exchange 2019
HitBTC crypto exchange
HitBTC is one of the oldest exchanges, founded in 2013. Since its launch, the exchange has significantly progressed, becoming a solid and reliable company with offices in Hong Kong and Chile. With around 900 trading pairs available on the crypto exchange, it has the largest crypto coins selection on the market.
Binance Cryptocurrency Exchange
Binance is currently one of the biggest crypto exchanges based on daily trading volumes. It was one of the first companies that started the Initial Exchange Offer (IEO) instead of the standard model used for raising funds from Initial Coin Offerings (ICO). The launch of margin trading, the introduction of BNB token, the development of its own blockchain, the release of a decentralized exchange – all these features enable any user to apply both simple and complex trading strategies on the crypto market.
OKex Cryptocurrency exchange
OKex is an international version of the large-scale Chinese crypto exchange Okcoin, launched after the introduction of legislative restrictions on the crypto exchanges in China in 2017. The company was forced to transfer its servers and infrastructure to Hong Kong and restart the platform. Currently, more than 400 crypto coins are being traded on the exchange with the possibility of margin trading.
Bitfinex Cryptocurrency exchange
Bitfinex was one of the very first crypto exchanges available on the Internet, where it became possible to exchange Bitcoin, Ethereum and other crypto coins for fiat money. First, there was a restriction on the minimum deposit amount of 10,000 USD, but this limitation has been removed, and the crypto exchange is accessible for everyone. The list of crypto coins for exchange has over 100 supported positions of the most well-known and influential cryptocurrencies.
Kraken Cryptocurrency exchange
Kraken was founded in 2011 in San Francisco, US. A small amount of trading pairs is compensated by the high level of security and the absence of deposit and withdrawal fees. The minimalist interface, the availability of margin trading, and withdrawal to a bank account create all the right conditions for investing.
Bittrex Cryptocurrency exchange
A relatively new crypto exchange, with the main office in Seattle, US. Initially, it was just an exchange for USD to cryptocurrencies, but later it turned into a big exchange with an extensive list of crypto coins. Bittrex has a complex security system and built-in user verification. These measures allowed the exchange never to get hacked to this date.
Overall, there is no single parameter that allows you to choose a reliable and convenient crypto exchange. It all depends on your preferences, intentions and skills. The parameters that should be considered are the number of pairs traded, country of legal regulation, support of fiat money, history of the exchange, quality of support service.
How to start trading on the exchange
Registration is quite easy on most exchanges. Basically, you will need a valid email and phone number to create a backup password.
The account verification, on the other hand, is a slightly longer procedure. For convenient trading on the exchange, the user may be asked to undergo the KYC (know-your-client) procedure. Its main task is to determine the identity of the trader to avoid suspicion of illegal financial activities. It’s a standard procedure for the entire financial market; cryptocurrency exchanges are not an exception, and they try to follow the standard rules.
After completing this procedure, the user can have access to various advanced functionality of the exchange: an increase in the volume for deposit/withdrawal of funds, access to margin trading, and so on.
Сryptocurrency exchange fees
When you trade on the crypto exchange, you should always take into account two types of fees:
– Exchange access fee
– Transaction fee
Each time you make a deposit or send a withdrawal request, a fee of approximately 0.1% to 0.3% is charged from the specified amount, depending on the exchange and the method of transfer. The same procedure is applied when concluding a transaction. Regardless of whether you are a seller or a buyer, you will be charged with a fee on the amount of each transaction that you conclude. Each exchange has its own fees, so be sure to check the conditions when choosing the platform for trading purposes.
Сrypto exchanges reviews
In case you want to get more information and opinions about best crypto exchanges, read some of the following articles:
If you are interested in the possibilities described in the article, you can always begin your acquaintance with the crypto market using our Plutus Wallet app. The version for Android devices can be found on Google Play. For all the iPhone users, there’s the iOS version on App Store.