Cryptocurrencies market is very volatile nowadays, so if you are willing to accept the risk it can be very profitable for both beginners and specialists. In this article we will explain how to buy bitcoins and altcoins (the term “altcoin” refers to any cryptocurrency other tan bitcoin) safely and securely. We will teach you how to buy and sell through some of the most reliable websites.
A cryptocurrency exchange platform is a website where you can buy, sell or exchange cryptocurrencies for other digital currency and/or fiduciary money (USD, EUR, etc.). In general, there are two types of exchanges:
a) Regular cryptocurrencies exchanges: it is not very different from a traditional stock exchange, where crypto-currencies are sold according to their current price. These types of trading platforms generally take a fee for each transaction. Some of these types of exchanges also allow users to convert fiduciary currency (such as the dollar) into crypto currencies such as Bitcoin at market Price, while others only allow you to buy cryptocurrencies with Bitcoins and sometimes others like Ethereum or Bitcoin Cash.
b) Decentralized cryptocurrency exchanges: this platforms just connect you with other interested people and the trade is between you and the other person, with no intermediaries. This is more anonymous and there is no risk of a cryptocurrency theft on a server hack, on the other hand as they are not very known yet liquidity is low.
Where to trade cryptocurrencies
There are several pages where you can buy Bitcoins and/or altcoins quite securely and with low risk. They are large platforms with a good user base that simplify the process as much as possible. You just sign in, pay the amount of Bitcoin you want and they are accounted on your balance. After few years of experience, buying and selling Bitcoins and trading them for cryptocurrencies, here is our review of our favorite ones. There are much more but these are our favorites for their security, posibilities, support and ease of use.
The procedure to trade cryptocurrencies is as follow: first you buy bitcoins, then you transfer them to the exchange where the altcoin is traded and then you use your bitcoins to buy the altcoin. So, we are classifying the exchanges in three types:
1º) Websites to buy Bitcoins
It is a regular exchange of German origin and you have to register and verify yourself to buy certain quantities. It works putting in contact users, mainly European. No deposit is required as payment is made directly to the seller. Bitcoin.de gets a 0.5% commission from each user.
They have recently partnered with fidor.de, a modern and bitcoin friendly bank, what gives them a great backup. It is a reliable, serious website and can handle hacking, theft or any other problem.
The downside is that it has so many users that at certain times support becomes saturated for minor queries and it may take a while to respond. On the other hand, when it comes to a problem or dispute in a bitcoin sale between users the service responds really quickly, sometimes they even act before any part of the trade writes them.
As the procedure may seem complicated the first time, we have prepared this tutorial explaining it all.
We think it’s the most recomendable site to buy bitcoins for European users.
This is one of the most popular websites today. Coinbase is quick and easy to use. You can buy Bitcoin, Bitcoin Cash, Ethereum and Litecoin by bank transfer or credit card (fees are high if you buy with credit card: 3.99%). It operates in Australia, Canada, Europe, Singapore, UK and the USA.
Coinbase is a broker that operates through the regular exchange gdax.com (Coinbase Pro from the 29th of june, 2018 on), a company of their own.
It also has “BTC Vault”, a kind of safe-deposit box for your Bitcoins. You can also create SMS access codes, email confirmations and double security passwords. They also provide you with a mobile app. Coinbase is currently one of the strongest startups in the market and holds BBVA’s shares.
LocalBitcoins was created in 2012 and is located in Finland. This is a slightly different platform, as it focuses on person-to-person purchasing. It’s still a regular exchange, as the seller depends on them to store the Bitcoins and transfer them to the buyer. The downside is that it can be a bit complicated for new users (don’t worry, we have prepared this tutorial for you).
Users can post ads stating the amount of Bitcoins they sell, the price and the payment method, for example. Although they don’t charge any fees for storing, buying or selling Bitcoins, these ads do charge. You can filter the ads by country, region or city and even select only users that accept cash payments, what can give you the most privacy.
It also has a number of features that will allow you to choose the most reliable and qualified users, as each of them is rated for previous transactions.
2º) Websites to buy altcoins and do trading
In the last few years, Binance has grown enormously and now ranks among the best crypto currency platforms in the world by users and volume. It currently offers more than 140 altcoins and the number increases as the days go by.
Binance’s fee structure is unique. To begin with, it has a 0.1% standard trading rate, which is already much lower than that of other similar websites. But if you pay with BNB (Binance coin, their own coin) fees are considerably reduced.
Recently Binance has introduced the stop-loss option, which allows you to have more control over your trades and avoid big losses in case your coin value drops more than expected.
The interface is not as complicated as it could be for such a complete exchange, they offer a basic and an advanced interface. In addition, it has an excellent mobile app for iOS and Android, and the company has just released a desktop application.
We recommend it the most if you want to trade or just buy some altcoins, so we have created this tutorial to show you how to set up your account and trade.
If you are looking for a modern and secure platform for trading between crypto currencies, Kucoin may be the right place for you.
Founded by a group of experts, Kucoin’s goal is to give users a secure method of trading their currencies in a modern and comfortable environment. It is a new (launched in 2017) and promising platform.
The interface is very clean and friendly, easy to learn, you can find a guide here.
Kucoin has the KuCoin Shares, that is to say with their own tokens that work in a similar way to Binance. The only flaw is that the online support is not so good as some disappointed users refer.
Based in Las Vegas, USA, Bittrex is one of the largest platforms in the world. Its user response services claim to be fast and efficient.
Other interesting facts: Bittrex was one of the first companies to exchange crypto coins and today has the largest number of users. Despite this, Binance is “stealing” more and more customers, so its interface has recently been renewed to make it easier and more user-friendly for newcomers and try to stop the bleeding.
The downside of Bittrex is that, although they have experience in the financial market, crypto currencies are something completely different.
Our experience operating on this website is not entirely satisfactory. Bittrex has delisted altcoins we were holding suddenly and without warning several times, so only the users that were connected to the chart at the moment they announced it on the web were able to sell them with no or little loss. If you, as it happened to us and many other users, didn’t connect to that specific coin chart until few hours or even days later you had a distasteful surprise as you found the price deeply dropped and had to sell on a big loss.
Based in Hong Kong, at Bitfinex you can buy cryptocurrencies with USD, EUR, GBP and JPY and trade them to BTC and ETH. In addition, they deserve to be considered for having a great deal of experience and an enormous volume of transactions recorded per hour. Bitfinex is a professional platform that uses cutting-edge technology to offer the best services to its customers.
Unfortunately, the company has just changed the terms of service and now requires a mínimum investment of 10.000 USD to register and too much personal information to be released, which is shared with the authorities in the user’s country.
On the other hand, it has unclear relations with the Tether Foundation, which is under suspicion of not complying with the committed dollar reserves. Both corporations, Bitfinex and Tether Foundation, have received subpoenas from the US Commodity Future Trading Commission, so we do not recommend trading on this platform for now.
3º) Trade with derivatives
Unlike the other websites we mentioned, in Bitmex you don’t directly buy cryptocurrencies but derivative contracts on them. You buy long and short contracts on Bitcoin, Ethereum, Ethereum classic, Monero and Zcash, but you don’t actually buy them.
In Bitmex you can trade with leverage, which means you can trade up to 100 times your inversion, something that only the riskiest investors should do. It also give you advanced features like stop loss, trailing stop, hidden offers and so on.
The downside is its interface: it is quite complex for begginers (don’t worry, we have prepared this tutorial for you).
Last but not least, there are rumors that the company is betting against its own users by insider trading with their market makers, although we haven’t had any problems when trading on Bitmex.
Remember: this exchange is recommended for advanced users that are familiar with stock or forex trading and willing to accept risks.