By now you’ve probably heard, read or seen a lot about Bitcoin and cryptocurrencies. The media has certainly been giving bitcoin, in particular, a lot of attention — and for good reason.
Bitcoin is smashing expectations and making people a lot of money. It’s up more than 350% in 2017 alone! Which is a pittance compared to its crypto siblings like Ethereum, up more than 4,000% this year.
But, while there is a lot of interest in bitcoin and cryptos at large, the tech barrier tends to put potential investors off. It’s not a simple process for beginners, and navigating the exchange markets can be troublesome. Which is why we’re going to provide a quick run-down of our favourite exchanges.
Remember, no exchange is ever going to be 100% safe. We are simply listing the ones that we believe are the most reliable. You should always conduct your own research and monitor any developments. Some of the exchanges listed might be fine for now, but that could always change in the future.
What we look for in a crypto exchange when buying cryptocurrency
Reputation is king. This is an industry built on trust, so go with the most trustworthy.
You can usually find out about an exchange with a few Google searches. It’s a simple but invaluable task. Once you become more adept, or want to explore alternatives, then you can branch out. But, for beginners, the popular exchanges are generally the best option.
Fees are a necessary evil on any exchange. You can usually find fee information on the exchange’s website, so make sure you understand what each exchange’s costs are.
Sometimes there can be a huge difference in fee costs between sites, so shop around if you feel comfortable doing so.
Exchange rate is also a big part of the fee structure. While there are some exchanges that deal in Aussie dollars, they are far smaller than their US or EU counterparts. Buying bitcoin in USD is far easier, but it can be a slower and more expensive process.
Country restrictions can also play a role in exchange accessibility. As an Australian, sometimes you just won’t be able to join some exchanges. Luckily there are still plenty of alternatives available, so you should never feel too restricted.
Our favourite exchanges in no particular order
This US-based exchange was founded by a former Goldman Sachs trader and a software engineer for Airbnb. It is one of the most well-known exchanges and is by far the simplest to use. We definitely recommend using Coinbase if you’re new to bitcoin.
However, it does come with limitations. Users can expect to pay a premium in fees for the site’s user-friendly approach. While they aren’t outrageous, they are definitely higher than most.
Still, this is the easiest way to familiarise yourself with bitcoin trading on one of the most secure and well-known exchanges.
Another US exchange, Kraken offers some of the most robust trading options. Supporting USD, euros, pound sterling, yen and CAD. Again though, no support for AUD as of yet.
Unlike Coinbase, Kraken is definitely catered to a more experienced trader. But it has some of the best exchange rates, relatively low fees and great user support.
It also offers a wider variety of tokens to trade, offering increased exposure to altcoins. Something that experienced traders may want in order to diversify their crypto portfolio.
Like Coinbase and Kraken, Bittrex is located in the US. But these guys are a standout for a couple of reasons.
First and foremost, they handle some of the largest volumes of trade in the entire sector. People love trading on this platform. And that makes it a great market to be a part of, because liquidity can be a crucial factor for cryptos sometimes. No one wants to be stuck waiting for a buyer or seller.
Another great asset is the team behind Bittrex. The founding members come from a range of big-name companies, such as Blackberry, Amazon and Microsoft. Most of their experience lies in digital security, which has translated to Bittrex, an industry-leading platform for digital currency exchange.
They’re also one of the best when it comes to altcoin trading. Currently they offer over 259 trading pairs, providing traders with plenty of options for relatively smaller crypto tokens.
However, they don’t offer direct exchange between coins and fiat currency. Instead users can purchase USDT or Tether, for USD — an important distinction. USDT is a crypto asset, but the price is pegged to the USD at a 1:1 ratio.
Essentially you can purchase USDT with USD, and then use your USDT to buy bitcoin or a range of other crypto tokens. This extra step might be enough to put off some users, but Bittrex is a great exchange for experienced traders.
Poloniex is very similar to Bittrex and also based in the US, but offers less altcoin trading options. They also deal exclusively in crypto or USDT currencies, with no fiat support. However, they more than make up for it with other features.
This exchange is great for its data analysis capabilities and advanced tools. You can easily navigate their exchange information with live trade updates and graphing capabilities. If you’re an advanced trader, definitely look into this exchange.
On top of all of this, they handle the largest volume out of any of the exchanges we’ve listed. This is definitely one of the best exchanges once you’re comfortable trading cryptos.
We do want to briefly address their customer support, though. A number of people have voiced their frustration with delays in getting adequate help in a timely manner. Though we personally haven’t had any major problems.
Based in Australia and dealing exclusively in AUD, BTC Markets, as a local exchange, is great if you don’t want to deal in foreign currency.
They handle the largest volume of bitcoin trade in AUD, making it a fan favourite among Aussies. However, overall volume is still extremely small when compared to overseas exchanges. This can result in liquidity issues and sometimes higher overall prices.
Overall, BTC Markets is a bit more limited and expensive, but is a great option for traders who want to deal in AUD.
Based in Australia, Independent Reserve offers trading in AUD, USD and NZD. Like BTC Markets, it’s great if you don’t want to deal with the currency exchange fees or hassle.
Their biggest draw-back, though, is their trading volume — great for someone looking to dabble with a small investment, but fairly limiting for larger traders. Other than that, their interface is slightly easier to use than BTC Markets, but the difference is basically negligible.
They are however currently the cheapest exchange to buy bitcoin in AUD. This includes factoring in fees and costs, though the difference isn’t huge between Independent and BTC Markets.
Find what works for you
Ultimately, it’s all down to personal preference.
If you’re new, we’d say stick to Coinbase. Find your feet, then, when you feel comfortable, start exploring alternatives. It’s hard to go wrong as long as you do the necessary research.
And remember, cryptos are still the most volatile investment available. Never put more into them than you can afford to lose.
Don’t get scared off though — this is a once-in-a-lifetime opportunity.
We think bitcoin is one of the hottest investments on the market right now. And it’s not too late to get a piece of the action, there’s plenty of upswing to come. You can read all about it in our free report, right here.
Or take a read of our article on How to buy cryptocurrency