While cryptocurrency has experienced a surge in popularity in recent years, only a minority of Americans have engaged in trading it.
Bitcoin, Ethereum, and Cardano stand out as among the most popular cryptocurrencies, with each witnessing substantial activity as their prices fluctuate.
The allure for traders lies in the potential to generate significant profits from the volatility of these highly speculative assets.
Traders now have an increasing array of options to access cryptocurrencies, with new exchanges and trading platforms emerging in response to widespread interest in the crypto market. Indeed, you might already possess an application on your phone that facilitates trading.
For instance, if you have the PayPal or Venmo apps, you can buy and sell at least a few different cryptocurrency coins. However, other apps and exchanges provide access to a broader selection of cryptocurrencies — numbering in the thousands — or offer additional benefits, such as lower costs.
What Is a Crypto Exchange?
A cryptocurrency exchange is a marketplace where you can engage in the buying and selling of cryptocurrencies, such as Bitcoin, Ether, or Dogecoin. The functioning of cryptocurrency exchanges closely resembles that of other trading platforms with which you may be familiar.
These exchanges provide users with accounts through which they can create various order types to participate in buying, selling, and speculating within the cryptocurrency market.
Certain crypto exchanges offer advanced trading features, including margin accounts and futures trading, although these options are less commonly available to users based in the United States.
Others incorporate functionalities such as crypto staking or crypto loans, allowing users to earn interest on their cryptocurrency holdings. The most reputable exchanges also provide educational resources to ensure users stay informed about all aspects of the cryptocurrency realm.
How Do Cryptocurrency Exchanges Operate?
Cryptocurrency exchanges function like brokerage platforms. Each exchange provides a platform where users can create various order types to engage in buying, selling, and speculating on cryptocurrencies with other participants.
There are two primary types of cryptocurrency exchanges:
Centralized Crypto Exchanges:
These exchanges are centralized, meaning they are managed by a single corporate authority, often a brokerage company. This entity oversees the security of trade and ensures the smooth functioning of the exchange.
Decentralized Crypto Exchanges:
In contrast, decentralized exchanges distribute verification powers across the network to anyone willing to join. Participants in the network certify transactions, akin to the operation of cryptocurrency blockchains. This decentralized approach aims to enhance accountability and transparency. It also ensures that the exchange can continue to operate even if something were to happen to the company running it.
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How to Choose a Cryptocurrency Exchange?
When selecting the optimal crypto exchange to meet your requirements, take into account factors such as:
1. Security:
Assess the security measures implemented by the exchange to safeguard your assets and personal information.
2. Trading Volumes:
Consider the trading volumes on the platform, as higher volumes often indicate liquidity and the ability to execute trades more efficiently.
3. Educational Resources:
Evaluate the availability of educational resources provided by the exchange. Access to educational materials can aid in enhancing your understanding of the cryptocurrency market and trading strategies.
4. Cryptocurrency Listings:
Ensure that the exchange lists the specific cryptocurrencies you are interested in purchasing, as not all exchanges support the same range of digital assets.
Top Apps and Exchanges for Cryptocurrency Trading In 2024
The following platforms encompass specialized crypto exchanges, online brokers, and cash/payment apps. We have included information on pricing and the number of coins available for trading, providing an overview of each app or exchange.
Considerations for Choosing a Platform:
- Security
- Trading Volumes
- Educational Resources
- Availability of Desired Cryptocurrencies
If your focus is solely on trading the most significant cryptocurrency, Bitcoin, it may not be practical to opt for an app that offers a plethora of other coins. Conversely, if you are interested in trading a variety of cryptocurrencies, selecting an app or exchange with more diversity might be beneficial.
Platforms:
Binance.US
Overview: Part of the larger Binance organization, known for low trading costs.
Cost: Free for Bitcoin, fees for less common coins start at 0.57%, with a 5%
discount using BNB for trading fees.
Coins available: Over 150, including Bitcoin, Ethereum, Solana, and Cardano.
Note: Faced legal issues with the SEC; ongoing case.
Coinbase
Overview: Specialized cryptocurrency exchange with a broad range of digital currencies.
Cost: Typically at least 1.99%, lower with Coinbase Advanced Trade.
Coins available: Hundreds, including Bitcoin, Ethereum, Cardano, and Solana.
Note: Faced legal issues with the SEC; ongoing case.
eToro
Overview: Broker specializing in cryptocurrencies, offering access to about 25 different cryptos.
Cost: Commission-free, with a spread markup of 1%.
Coins available: 25, including Bitcoin, Ethereum, Dogecoin, and more.
Kraken
Overview: Specialized cryptocurrency exchange supporting over 230 cryptocurrencies.
Cost: Fees start at 0.26%, with additional fees for cards and online banking.
Coins available: 236, including Bitcoin, Ethereum, Solana, and Uniswap.
Note: Faced legal issues with the SEC; ongoing case.
Robinhood
Overview: Known for its commission-free stock trading app, expanded into cryptocurrencies.
Cost: $0, commission-free, with a spread markup.
Coins available: 15, including Bitcoin, Dogecoin, and Ethereum.
Webull Pay
Overview: Offers stocks, options, ETFs, and cryptocurrencies with no commission.
Cost: Commission-free, with a spread markup of 1%.
Coins available: 8, including Bitcoin, Ethereum, and Shiba Inu.
Cash App
Overview: Known for cash management, also facilitates Bitcoin trading.
Cost: Spread markup plus a trading fee.
Coins available: Only Bitcoin.
PayPal
Overview: Popular payment app offering cryptocurrency trading services.
Cost: Spread markup of about 0.5% plus a trading fee.
Coins available: Four, including Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.
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Conclusion:
The choice of the best crypto trading app or exchange depends on individual needs, considering factors like desired cryptocurrencies, cost, and features. Whether you aim for a diverse range of digital currencies or focus on major ones like Bitcoin and Ethereum, evaluate each platform’s suitability before opening an account.