With the plethora of crypto assets available worldwide comes with it the vast swathes of trading pairs across multiple exchanges. Let’s explore some of my preferred ways to send, receive, trade, stake and/or earn crypto throughout some of the most reputable worldwide. I have also included examples for Australian/New Zealand-based users in a separate section.
Boasting more than 600 cryptocurrencies and thousands of trading pairs with dozens of fiat currencies worldwide, Binance has emerged as one of the largest and most renown crypto exchanges across the world. Since its inception in 2017, it has rapidly expanded its range of choices well beyond that of a traditional one. Some of these include:
— Binance DEX’s compatibility with several non-custodial wallets;
— Launchpad allows for widespread exposure for up-and-coming crypto projects;
— Learn & Earn about digital assets and blockchain;
— Institutional & VIP Services for enterprise-level clients;
— Various trading services for digital assets (including derivatives);
— its non-custodial Trust Wallet for users seeking full control of their digital assets;
— NFT marketplace, and much more.
Aside from of these different components, the company offers some of the lowest transaction fees in the industry, at ≤0.10% for buys and sells. This, coupled with >$70 billion of 24-hour trading volume across its platform has rendered Binance a popular selection amongst crypto investors and/or traders interested in buying, selling, staking and lending their crypto assets.
Despite a slow start with its range of supported crypto assets, Coinbase has quickly expanded on the selection of cryptocurrencies on offer for clients to purchase. Several top-100 cryptos (based on market cap) are available to purchase through its platform, with even more options permitted via its non-custodial Coinbase Wallet. The complete run-down of this asset list can be found here.
The exchange’s biggest drawcard is its convenience as an on-ramp for crypto beginners and its ease-of-use. Notwithstanding this, it has relatively larger fees than others listed in this piece, something that should be resolved if the company were to remain prominent and favourable amongst the crypto community. To clarify, I speak from my experience as a non-US client (depositing AUD rather than USD), having used Coinbase prominently until last year when I switched to a local alternative.
Another benefit associated with this is its Coinbase Earn feature. Whilst limited in its scope at present (only a few assets are eligible for this program), it is a step in the right direction to allow its users to earn passive income via (indirect) staking. Prior to proceeding with this, it is worth considering the commission taken by Coinbase as part of their staking program.
Besides purchasing digital assets via the platform, the company also represents the first publicly-listed crypto exchange (COIN:NASDAQ), which is currently valued at roughly $14 billion. Whilst down over 75% since its IPO, I envisage significant growth potential as the crypto space recovers, and evolves as is anticipated to grow in future. However, Coinbase will need to remain relevant and competitive as the overall sector further diversifies its use cases and improves.
Bitstamp and Kraken
One of the oldest crypto still in existence, Bitstamp has significantly bolstered its variety of digital assets in recent years, with over 60 coins and tokens supported across a vast swathe of USD, EUR, GBP and BTC trading pairs.
In 2021, it introduced Bitstamp Earn, for holders of Ethereum (ETH) and Algorand (ALGO) to obtain ongoing rewards of approximately 5% p.a. (at the time of writing) by users continuously holding these assets in their Bitstamp wallet. I envisage that, in due course, it will expand on this system to add more crypto assets to Earn.
As for Kraken, this well-established US exchange is a popular alternative to Coinbase, with a decent assortment of crypto assets to purchase and trade. Alongside this, they also offer opportunities to earn passive income via their Earn program in a simple manner (just a few clicks to set up the system as opposed to having to stake through a non-custodial, which, to be honest, is still fairly simple for most crypto assets).
In regards to fees, both have generally reasonable trading fees, but higher than expected fiat (instant) buy charges compared to Binance or my local (Australian) exchanges; currently ~3.75% and 5% for Kraken and Bitstamp respectively. However, this could vary based on your jurisdiction, I would recommend looking further into this through the company websites (see ‘Fee’ or ‘Fee Schedule’).
Nonetheless, this can be readily circumvented by purchasing crypto on another platform and sending it directly to these two if desired. I still rate these fairly highly based on their increasing list of supported assets, security, convenience, Earn, global reach and customer service.
This is my least-preferred choice out of the options, but I find this to be a useful for anyone seeking a small-capped altcoin yet to be found on several major exchanges. This could be advantageous when seeking a crypto with solid growth potential, as this includes more cryptos outside of the top-100 by market cap; well-researched small-caps that have a good team, robust utility and clear roadmap underpinning the project are capable of yielding > 100x ROI, notably during a bull market.
From my perspective, KuCoin has a similar feel and layout to Binance. Like the latter, it offers a broad selection of aspects to crypto, such as margin trading, lending, staking and more.
For Australian/New Zealand-based users
The Brisbane-based crypto exchange offers one of the most extensive and convenient systems to buy, sell, trade, and earn crypto for users across Australia, New Zealand, United Kingdom and (coming soon to) Canada. Beyond this, Swyftx has a very comprehensive range of crypto assets available for its clients; far more aspects than those present on other Australian exchanges.
Moreover, I speak very highly of their customer-service experience, with rapid reply times seven days a week and the opportunity to interact directly with a human. Alongside this, they have a very convenient ID verification system; no need for selfies whilst holding an ID and going through an thorough process just to register for a verified account.
Two major drawcards of Swyftx are its low fees and generous deposit/withdrawal limits. For the former, this is especially the case with trading and exchanging from fiat or one crypto to another. As per the latter, free fiat deposits and withdraws are available, with daily limits up to 100,000 AUD provide ample opportunities for investors across the board to take significant profits or buy the dips.
For anyone interested in investing in crypto for the long-term, notably for retirement, Swyftx is one of the Aussie-based exchanges offering a self-managed super fund (SMSF) for crypto assets.
Out of the Aussie exchanges I am aware of, I am most familiar with this one, and impressed with their overall performance and customer service to date.
Independent Reserve (IR)
IR has been one of the longest running Australian crypto exchanges, operating since 2013. This platform boasts over 200,000 clients with buy/sell, trading, dollar-cost averaging (DCA) and over-the-counter (OTC) options for over 25 major cryptos. Whilst a limited number at present, new crypto assets are gradually being added.
Alongside this, I look forward to seeing IR offering more benefits to its clients. Unlike Swyftx, they are yet to embrace the earn feature (formerly staking), which the latter offers for 21 assets at present, including Bitcoin (BTC) and Ethereum (ETH). In due course, IR should be embracing a similar system to remain competitive in this nascent sector and broaden its active user base at present.
As per the exchange’s fees, these are generally reasonable and offer predominantly fee-free deposits and withdrawals for most transactions in AUD. For convenience, IR also accepts deposits and withdrawals in USD, NZD and SGD. Generally speaking, modest fees apply for most trades and crypto withdrawals. All related details about fees and charges are available here.
Similar to Swyftx, IR also offers a SMSF. For those of you interested in pursuing this strategy as part of a retirement fund, a useful overview of salient options is provided here.
Another useful characteristic of IR is their Tax Estimator. It provides this in collaboration with KPMG to assist users in determining their tax obligations for a given financial year. At present (from my understanding) this summary is only offered for clients dealing with the Australian Taxation Office (ATO).
CoinJar claims to be the longest-running crypto exchange in Australia, operating since 2013. I briefly used this back in 2017 and early 2018, so I am not as well-versed in this exchange as opposed to the aforesaid choices. Though this (let alone others shown here) is a registered company within Australia, meeting the requirements to operate with Australia’s regulated financial system.
One element that is still uncommon in Australia across crypto exchanges is the possibility of purchasing goods and services using crypto credit-card. CoinJar offers this functionality via its CoinJar Card. In partnership with Mastercard, crypto holders using their platform can spend their digital assets with a digital or physical card, just like a regular card.
It presently offers over 50 cryptos for buying and selling via its exchange, including most major digital assets. By the same token, through its press releases, blog and regular newsletter, it actively posts content to keeps its (current and prospective) users in the loop about related promos, trends and crypto/blockchain news and more.
Another crypto exchange with a comprehensive range of digital assets and related services to buy, sell and trade crypto. Similar to others listed above, this also provides opportunities for the institutional clients to engage in OTC trading. Moreover, it is one of the few Aussie-based exchanges to date that have incorporated an NFT marketplace for their users.
Adding to the hundreds of cryptos through this platform, this exchange also offers an SMSF, OTC trading and more.
A general warning when using crypto exchanges
In spite of these exchanges being some of the most trustworthy across the world, these are ultimately centralised entities that are still prone to hacking. Users are at the mercy of an exchange’s security systems (or lack thereof) and/or the contingency measures in place to deal with lost funds. Furthermore, there is the risk of ID verification documents and/or related images being stolen by malicious actors, as was the case in Binance’s 2019 hack. As some consolation, they covered losses as part of their SAFU fund, established in the event of hacks.
From my personal experience, I have never lost any crypto using an exchange since 2017 when I first dabbled in this asset class. Thus, I believe any of the exchanges displayed here are safe bets. However, there have been instances of exchanges going down and crashing due to excessive activity in a short period of time. Whilst not as common as it once was, be prepared for this nonetheless, particularly in times of extreme market volatility.
When using an exchange, many crypto commentators (myself included) recommended storing a small percentage of your personal funds on one of these, and instead opting for a hardware wallet, also referred to as ‘cold storage’. Ledger, Trezor, Keepkey, Ellipal and BitBox are some notable examples, with the first two (combined) accounting for a large market share of hardware wallets.
The rigmarole of KYC AML for crypto in 2022
Most of these exchanges require some Know Your Customer, Anti-money Laundering ID checks for users to access the full features of any above-mentioned platform, let alone most reputable choices across the world.
Albeit frustrating, this appears to be a reality of interacting with crypto exchanges in 2022, notably the legitimate ones. To minimise the dissemination of your sensitive data online, it would be best to select one exchange that has a comprehensive range of crypto assets and services (the latter including, staking, lending, trading, etc.) and use that for ID verification purposes.
You can then select a second one that does not require ID verification and still accepts crypto deposits and (most importantly) crypto withdrawals. Do bear in mind that, in reality, strict daily and/or weekly withdrawal limits generally apply to unverified accounts.
Whilst I am not fond of increasing restrictions and ID verification as part of Know Your Customer and Anti Money-laundering (KYC AML) laws, I would still prefer this regulated crypto system than to be excluded from it altogether, courtesy of state/national bans imposed by certain countries.
With the plethora of crypto exchanges currently available and growing in number (and size) across the world, it is imperative that you do your own research prior to signing up and using one of these. Some things to factor in include (but are not limited to):
- Is this a regulated crypto exchange that has been registered with related authorities around the world, especially in the US, UK, EU, Australia, etc.?
- What reviews have people given this exchange, particularly over the past 12 months?
- Which review sites have you used to ascertain whether this exchange is right for you or not?
- Have there been previous hacks linked to one of these services? If so, were users’ funds stolen and (if so), did the exchange provide full coverage for these losses?
- Does it have two-factor authentication (2FA), with Google Authenticator or similar as a minimum?
- Have there been (repeated) instances of trading halts that prevent users from accessing their crypto assets?
- Have these exchanges registered their businesses with related government regulatory bodies to legally operate and custody funds for their clients?
- Have previous/current users reported cases of missing funds, especially for lengthy periods of time?
- How is the customer-service experience based on other people’s reviews?
To clarify, few major reputable exchanges still in existence have avoided being hacked at all or data being compromised in any way. Larger ones would undoubtedly have major targets on their back. I acknowledge that some of these listed here have also been involved in hacks, that have been well documented to date.
Nevertheless, I still have faith in these abovementioned exchanges when using their services, but would still refrain from storing large amounts/percentages of funds on a given exchange. Additionally, the fewer details you provide to these companies, the better it is; find one that you deem to be the most trustworthy for KYC AML verification purposes (your primary choice) and use others that require very little personal data for crypto-to-crypto trading, when your preferred assets are unavailable via your first pick.
In relation to cyber security and keeping your crypto, I recommend reading this related article that I recently wrote to stay ahead of the game.
Happy crypto investing/trading.
Disclaimer: None of the information contained in this article is financial advice. I am not a financial advisor. Details are correct as of 12 May 2022.