Cryptocurrency investment sites
Digital currencies, especially Bitcoin, have gained great popularity among traders due to their high volatility compared to traditional methods of investment such as stocks or ETFs, and their decentralization so that no single institution can control them. Cryptocurrency may sound great, so how do I start investing in Bitcoin? Which cryptocurrency investment sites do I need to use and how do I buy cryptocurrency?
The best cryptocurrency investment sites
Coinbase is one of the most popular cryptocurrency investment sites. As the website claims, Coinbase is “the easiest place to buy, sell and manage your cryptocurrency portfolio.” The process of trading cryptocurrency on this site is similar to trading stocks online: create an account, link it to your credit or debit card, deposit funds, and start trading.
Coinbase tries to secure your funding and account by storing 98% of its customers’ funds offline. Sensitive data, including your bank account, is separated from the Internet to prevent electronic theft. In addition, data is encrypted and copied to USB drives and paper backups are kept in safe deposit boxes around the world.
To prevent your account from being used by an unauthorized person, Coinbase uses a two-step verification process, which requires you to verify your account and phone number. You will also need to verify your identity with a government-issued ID. If Coinbase funds are hacked, they have an insurance policy that covers any loss of funds.
Coinbase allows you to trade cryptocurrencies such as Bitcoin, Ethereum, Litecoin, etc. When you buy or sell $100 or more in cryptocurrencies, you get $10 worth of BTC. You will pay a 0.5% fee and a transaction fee that depends on the total transaction amount for each transaction you make.
Coinbase is one of the best cryptocurrency investment sites thanks to its high liquidity, strong cryptocurrency pool, and never-compromised security record.
eToro offers a wider range of cryptocurrencies than Coinbase. Trades are made on the eToro platform for a specific dollar amount rather than a digital currency unit or asset. This means that you can buy a fraction of the digital currency if you do not have enough funds for the full unit. For those who do not have enough money or do not want to invest in a whole unit of cryptocurrency, buying a small part of the cryptocurrency is a great option.
The minimum per trade is $25 and the minimum deposit is $50. Deposits are only accepted through online banking or wire transfer as eToro claims to be the best site for protecting clients’ funds and accounts.
While you cannot use cryptocurrencies directly as an external payment, eToro has a feature called the eToro Wallet that allows you to transfer cryptocurrencies to your own wallet and use the digital currency as a direct external payment.
eToro trading fees typically range from 0.75% to 2.90%, depending on the bid-ask spread for each cryptocurrency.
For those who want a variety of digital currencies and tokens, Bitfinex is the perfect site for you. What makes Bitfinex special is its margin trading feature, which is not common in the cryptocurrency world and is not offered by other cryptocurrency investment sites. Margin trading at Bitfinex is made possible through the peer-to-peer margin financing feature, which means that users on this site can lend money or assets to other users if they wish. Users can trade with up to 5 times leverage thanks to this feature.
How does margin trading work? Margin trading is borrowing someone’s money to invest in an asset. If you win money, you keep the profit and pay the interest to the lender, but if you lose it, you must pay the lender the full amount borrowed plus interest.
Bitfinex allows you to trade over the counter (OTC), which is another relatively rare feature. OTC trades are suitable for large orders as the trader does not have to go through the public order books and does not have to pay additional fees or exchange commissions. If a trader wants to conduct an OTC trade with another Bitfinex user, he just has to enter the name of the trader and the trading details and wait for a response from him.
Binance is a cryptocurrency investment site that has a variety of cryptocurrencies to choose from. Compared to some other websites, Binance is not so easy to use, so beginners may have difficulty in the beginning, and it also does not allow fiat currencies such as USD to be directly deposited into your account, which means that you cannot start trading without some cryptocurrency. Alternatively, you can purchase a number of cryptocurrencies directly with a credit or debit card, or transfer available cryptocurrencies from another account to your Binance account.
Binance offers two different versions of currency trading: basic and advanced. The main difference between these two versions is that the advanced option has more in-depth technical analysis available to the users.
After creating an account on the site, you are considered a level 1 user and you do not need to verify your account.
, although there is a withdrawal limit of 2 BTC/day for this type of account. To become a Level 2 user, you will need to upload a government-issued photo ID to verify your identity and await approval.
Binance supports three types of trading orders for buying and selling cryptocurrencies: limit, market, and stop-limit orders. These trading orders work just as they would if you were trading stocks. The limit order is executed at the specified price only or at a better price. If you set a buy limit order at 5 BTC for example, the order will not be executed until the price reaches 5 BTC or less. Market orders are executed immediately at the next available price and in the size specified by the trader. As for limit stop orders, they are executed only when the price reaches the stop amount, which is the exact price that will activate the limit order. There are many resources online that can help you better understand how limit and market orders and stop-limit work.
CashApp is a great platform for beginners as it supports peer-to-peer transfer system and offers stocks, ETFs, cryptocurrencies, etc.
The cool thing about CashApp is that you can withdraw Bitcoin to your own wallet or transfer it to another account, but there is a withdrawal limit of $2,000 BTC per day. The ability to withdraw cryptocurrencies to your own wallet is very important to the cryptocurrency community who believe that if you don’t have the keys to where the coins are stored, they are not for you.
As with other cryptocurrency investment sites, CashApp charges a fee per trade and an additional fee determined by how volatile the price of the asset is, which may change depending on market activity. If you plan to send money via a linked credit or debit card, you should know that CashApp charges 3% of this transaction.
Abra currently allows you to trade more than 100 cryptocurrencies and is available in more than 150 countries. To deposit into your account, you can either use bank account transfers, credit or debit card, BTC, BCH or LTC, or Abra wire. Depositing money via credit or debit card is the fastest method, but it also has high fees.
Abra uses a Bitcoin-based system, which provides a faster and less expensive way for users to control their funds. This means that all your balances on the app, regardless of currency, are held as BTC. How does this work? Let’s say you have 10,000 USD in your account, which is the price of 1 Bitcoin. Then the Bitcoin price drops by 50% to $5,000. Your account will still be worth $10,000, except that you will have two BTC instead of one.
Abra allows you to quickly withdraw cryptocurrencies to an external wallet to spend as you wish, and you can also leave them in your Abra interest account to earn interest on them. You can earn up to 9% interest with cryptocurrencies like Paxos, Tether and USD Coin, and around 4% on BTC and ETH.
Kraken offers around 40 cryptocurrencies on its platform for users to choose from. Kraken is not as easy to use as some of the other cryptocurrency investment sites, so it can be complicated for a beginner.
To trade on Kraken, you first need to know what you want to trade and what pairs you will need, which looks like this: BCH/USD. The first currency is the base currency, and the second is the quote currency. If you buy, you will pay the quote currency (in USD) and receive the base currency (BCH). In other words, you are buying Bitcoin Cash with US dollars. If you sell, you are selling the base currency (BCH) to receive the quote currency (USD). In other words, you are selling Bitcoin Cash for US dollars.
For each order on Kraken, you can specify whether to place it as a market order (to be executed immediately at the next market price) or a limit order (to be executed only if the asset matches the specified price).
The Kraken platform allows you to deposit fiat or cryptocurrency into your account. In the case of a cash deposit, you can do so via bank transfer as Kraken does not accept credit or debit cards.
Are you interested in margin trading? Kraken’s margin trading feature is open to everyone, so you can trade with up to 5x leverage on their website.
Bitstamp trades cryptocurrency pairs just like Kraken. Before you start trading on Bitstamp, you have to first verify your account and then deposit funds. There are three ways to deposit money into your account: via SEPA, international wire transfer, or make a direct purchase with a debit or credit card. There are fees associated with each deposit and withdrawal depending on which method you use, except for SEPA deposits which are free.
Bitstamp has one of the lowest trading fees among other cryptocurrency investment sites, starting at 0.50% per transaction if your total trading volume is less than $10,000. The higher your total trading volume, the lower the trading fees will be. The minimum trade amount is 0.001 BTC for trading pairs denominated in BTC and 25 USD/EUR/GBP/PAX for trading pairs with these denominations.
When trading on Bitstamp, you have 5 options to choose from: spot order, market order, limit order, stop order, and trailing stop order. A spot order differs from a market order in that it is often accompanied by a fixed spread while the spread of a market order is adjusted during the process. A stop order is an order to buy or sell when the price of an asset meets the stop price. In short, a trailing stop order allows a position to be opened when it moves in the investor’s favor and stopped out if it moves in the opposite direction, either to take profits or to prevent losses.
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