It’s common knowledge that owning Cryptocurrencies is like being your own bank, harnessing the power of decentralisation for a distributed world money system, without any limitations or censorships. Over the past few years, cryptocurrency exchanges have exploded in numbers globally, almost in tandem, with the global cryptocurrency craze. Cryptocurrency exchanges are regarded by many as the first point of entry for a novice trader as well as a tool used by experienced traders to amass fortunes.
There are two types of exchanges; centralised and decentralised. While centralised exchanges still dominate the markets in terms of trading volume and popularity, small decentralised exchanges are starting to grow, providing maximum security by fully utilising blockchain technology. However, selecting the appropriate exchange is no easy task, as they behave quite differently than normal stock exchanges. To better understand this concept, crypto-exchanges can be categorised by the following points, namely
- By Volume
- With margin
- By Country
- By Volume: When evaluating cryptocurrency exchanges, sorting by volume can provide a good indication about a particular exchange’s liquidity. Traders normally use this as an effective tool to gauge the current crypto-market situation and make well-informed and calculated trading decisions. Perhaps, the most convenient way is to consider the last 24hours trading volume, measured in terms of USD or by BTC.
A. FCoin: The Fcoin Crypto-exchange is a new arrival on the cryptocurrency market, which has garnered industry-wide attention for its almost instant success. It has constantly registered the highest daily trading volume for the last few days, exceeding the $5.4 Billion mark at the time of writing. Among the various trading pairs, on the exchange, the FT/BTC for their native Fcoin token is the most traded, followed by BTC/USDT (Bitcoin) and ETC/USDT (Ethereum Classic) pairs. There are a total of 81 cryptocurrency trading pairs available on the platform.
It should be noted that FCoin is facing allegations of running a ponzi scheme as well as various other price manipulations and wash trading. Regardless of that fact, Fcoin has the highest trading volume at the moment, according to various crypto-sites like coinmarketcap.
B. OkEx: Hong-Kong based Crypto-to-crypto exchange OKEx is next on the list, offering several trading options such spot trading, futures trading and margins trading, besides regular token trading. At the time or writing, OKEx had a daily trading volume exceeding $1.1 Billion with an expansive trading catalogue containing a total of 583 pairs. At the moment, Bitcoin, EOS, Ethereum, Wfee and Ethereum Classic pairs are among the top 5 positions.
C. Binance: Probably the well-known Cryptocurrency exchange in the world, Binance was a China-based cryptocurrency exchange originally, before switching its base to Malta. Binance is a crypto-to-crypto exchange only, meaning they do not deal in Fiat trading of any kind. Till January 2018, Binance recorded the largest market cap among all crypto-exchanges in the world, amounting to almost $1. 3 billion. Although it has been overtaken by Okex and Fcoin in recent times, Binance is still the go-to cryptocurrency exchange for the majority in the trading community. At the time of writing, Binance has a 24 hour trading volume exceeding $940 Million with Bitcoin, EOS and Ethereum pairs are the best performing. At the moment, Binance provides 377 trading pairs which also include popular Initial Coin Offerings.
2. With Margin: Margin Trading has been compared to a double-edged sword in crypto trading, generally considered an advanced trading environment where the margin for error is very less. Margin trading can help traders leverage their position to a much greater amount, but one small mistake or miscalculation can lead to heavy losses. Thus, it is always recommended for a trader to understand the concept of margin trading thoroughly before making any substantial trade on any platform. There are several cryptocurrency exchanges that offer margin trading for cryptocurrencies. The top three are listed below:
- BitFinex: Bitfinex is a well-known cryptocurrency exchange which offers a mix of traditional trading services like limit, market stop, as well as more algorithmic trading techniques such as Iceberg, OCO and Post Only. It is currently the largest crypto-exchange by volume which offers margin trading. Bitfinex offers a wide range of altcoins with the option of trading with leverage of up to 3.3x. Bitfinex also allows users to access additional trading features of their Trading Order Book through a “Margin Wallet.”
|Charge on fees collected by Margin Funding Providers||15.0% (of the fees generated by active margin funding contracts)|
|Charge on fees collected by Margin Funding Providers, when opened by a hidden offer||18.0% (of the fees generated by active margin funding contracts)|
|Charge on funding that is borrowed and subsequently returned without being used in a margin position (More Information)||Up to one full day’s interest|
- Kraken: Kraken is a U.S-based cryptocurrency exchange, and is the world’s largest Bitcoin exchange in terms of euro volume and liquidity. It offers a mix of different trading options including margin trading. Even though the exchange has faced some data breaches especially in 2017, its overall security track record is impressive. Currently, Kraken operates in Canada, EU, Japan and the U.S., with plans to expand to other nations later on. Currently, it offers a total of 17 trading pairs in margin trading, for cryptocurrencies such as Augur, Monero, Bitcoin, Ethereum, Ethereum Classic. Additional information is given below:
|Currency Pairing||Base Currency||Quote Currency||Available Leverage|
|XBT/USD||Bitcoin (XBT)||US Dollar (USD)||2, 3, 4, 5|
|XBT/EUR||Bitcoin (XBT)||Euro (EUR)||2, 3, 4, 5|
|USDT/USD||Tether (USDT)||US Dollar (USD)||2|
|ETC/USD||Ethereum Classic (ETC)||US Dollar (USD)||2|
|ETC/EUR||Ethereum Classic (ETC)||Euro (EUR)||2|
|ETC/XBT||Ethereum Classic (ETC)||Bitcoin (XBT)||2, 3|
|ETC/ETH||Ethereum Classic (ETC)||Ethereum (ETH)||2|
|ETH/USD||Ethereum (ETH)||US Dollar (USD)||2, 3, 4, 5|
|ETH/EUR||Ethereum (ETH)||Euro (EUR)||2, 3, 4, 5|
|ETH/XBT||Ethereum (ETH)||Bitcoin (XBT)||2, 3, 4, 5|
|REP/EUR||Augur (REP)||Euro (EUR)||2|
|REP/XBT||Augur (REP)||Bitcoin (XBT)||2|
|REP/ETH||Augur (REP)||Ethereum (ETH)||2|
|XMR/USD||Monero (XMR)||US Dollar (USD)||2|
|XMR/EUR||Monero (XMR)||Euro (EUR)||2|
|XMR/XBT||Monero (XMR)||Bitcoin (XBT)||2, 3|
- Poloniex: Poloniex is another crypto-exchange based out of the U.S. and prioritises security as well as expanding trade offerings to its users. Currently, it offers high volume margin trading and lending services for some major crypto-assets. Its servers can be accessed from anywhere in the world, though a large share of its userbase comes from the U.S. (24.84%) as well as from Russia (6.06%). It currently offers 11 cryptocurrencies for margin trading, all paired with Bitcoin.
3. By Country: The blockchain and cryptocurrency industry has undoubtedly grown globally in the last two years. Although each country has its own directives for handling digital assets and tokens, many insiders warn traders against using exchanges based in obscure parts of the world. Many of these exchanges outside the U.S or Euro Zones operate in markets where consumer protection is weak and pose many difficulties in the long run such as transferring funds, or falling prey to an elaborate ponzi scheme. There are two important factors that can be used as a basis of measurement.
- Highest Number Of Exchanges Based On Legal Location Of Exchange:
It is to be noted that legal location primarily refers to the region where the exchange is registered. According to a recent study conducted by Morgan Stanley, the maximum number of cryptocurrency exchanges is based out of the United Kingdom, Hong Kong and the US. The biggest cryptocurrency exchanges under this category include Coinbase and Coinmama from the U.S., Bitlish, Bitstamp and Tidex from the United Kingdom and Kucoin, HitBTC and BITZ from Hong Kong.
- Highest Trading Volume Based On Legal Location Of Exchange
In terms of trading volume though, the picture is radically different. Malta accounts for the highest in terms of trading volume, with many exchanges opening branches on the island. Much of Malta’s position can be attributed to Binance, which has recently shifted its HQ from the South East to Malta. OKEX has also announced plans to open a branch on the island, citing the Maltese Government’s willingness to embrace blockchain technology.