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Compare the best bitcoin exchanges
Where can you buy Bitcoin on an exchange?
We’ve compared all the best BTC exchanges out there to find the best, and reviewed them in depth to ensure that you can find the right exchange for you. Go ahead and check them out. If you’re not ready just yet, scroll down to learn more before making a choice.
What is a bitcoin exchange?
This is a marketplace where you can buy and sell bitcoin online. By using one, you are able quickly and easily to trade fiat currency (such as GBP and USD) for cryptocurrency and to trade different cryptocurrencies for each other. Some exchanges such as Wirex are built with a user-friendly interface, making them attractive for beginners, whereas others such as Bittrex and Binance come with a more advanced interface for more experienced traders.
How do exchanges work?
There are two main ways you can trade bitcoin on an exchange:
- Market orders. With a market order, you buy or sell at the best available price at that time on the exchange. Since the purchase is usually instant, market orders are the fastest way to make trades.
- Limit Orders. With a limit order you set the price and the transaction automatically goes through when bitcoin hits that price. If you think the value bitcoin is going to fall, then you can set a limit order at a lower rate and get more for your money.
How to use an exchange
First, you have to set up (and usually verify) your account. Once you’ve done this you can either connect your card to that account or top it up by paying directly into the account. After you have done this, choose your payment method and purchase the coins.
Depending on your preferred method, the period during which your account will be credited will vary. For instance, exchanges such as Wirex credit your account instantly when you pay using a credit card, but it could take 3-5 days if you use a bank transfer.
What should I look for in an exchange?
There are a number of factors that help the top Bitcoin exchange platforms stand out from the crowd. Here are the main ones to think about:
Payment methods accepted
Not every exchange will accept the same forms of payments. Most of them will accept credit cards and bank transfer, but some such as Binance and Bittrex will only allow you to trade with different cryptocurrencies. One thing to note is that it’s particularly hard to find crypto exchanges that accept PayPal. Make sure you use an exchange that lets you pay how you want to make it more convenient for you.
This is one of the most important factors in choosing an exchange, as it directly affects the amount you’ll be paying. Exchanges usually charge maker and taker fees, and they vary from one exchange to another and the volume of your trades. These rates usually fall somewhere between 0.1% and 1.25%. Getting the most bitcoin for your buck means finding an exchange with a low rate.
Not all exchanges are freely available in all countries. Platforms such as Binance are available in almost every country, whilst Wirex is not available in the US. Check that the exchange you want to use is available where you are before creating an account.
The fees vary from exchange to exchange, and will often depend on your payment method. Most sites will charge around 1% – 5% when you use a credit card and around 2% when you use a bank transfer. When choosing an exchange, make sure that your profits aren’t being too dented by the fees charged.
Design and ease of use
An important consideration when choosing a platform is how well designed the website is. For instance, Wirex comes with a user-friendly interface to help beginners invest in bitcoin, whereas other sites such as Binance are designed for more advanced users, displaying complicated graphs, cryptocurrency price & charts and allowing different trading tools. You want to be able to focus on buying the coins, not figuring out how the site functions, so find an exchange you’re comfortable using.
Quick answers to key questions
Do I have to verify my account?
Yes, you’ll have to verify your identity when signing up to an exchange. You will usually be asked to provide 2 forms of ID (such as a passport or driving license) and often a selfie of you holding one to prove it’s yours. Platforms such as Bitstamp and Bitpay may also ask you for further verification documents like bank statement or utility bill to confirm your address.
Are exchanges safe and secure?
They have many security features, though they are a big target for online attacks. There have been cases whereby exchanges have been hacked and millions of pounds worth of cryptocurrency stolen by hackers, such as with the Mt Gox exchange in 2014. It is therefore not recommended to hold more than a small amount of bitcoin at a time on an exchange account. Instead, transfer your coins to a personal wallet to keep your coins safe.
If you buy a large number of coins as a long-term investment, consider using a hardware wallet or paper wallet for extra security. If it’s a small amount that you intend to access regularly then it might be best to get an online wallet.
What if I forget my password?
This will depend on the platform, but usually exchanges will have steps to reset a forgotten password through the email address/security questions you registered when setting up your account. You just need to initiate ‘reset password’ and a link will be sent to your email address to help you set up a new one. Your exchange account has access to your bitcoins so it’s important to choose a secure password that’s not easy to guess.
How fast are transactions?
For the most part, transactions are instant. As soon as you make the payment, the bitcoins will be in your account immediately for trading. This is not necessarily the case when moving your bitcoins between exchanges, which will take slightly longer as it has to be verified on the blockchain. Exchanges such as Binance will credit your account after two blockchain confirmations, which can take a few minutes.
If you place a limit order then the transaction will only go through once bitcoin hits the value at which you have selected. At this point, though, the transactions speeds will be the same as with market orders.
What payment methods are available?
This depends on the exchange you intend to use. Typically debit card and bank transfers are the most commonly used methods of payment. Some exchanges also accept credit cards or PayPal payments, though this is less common. If you’re using an exchange that supports many different cryptocurrencies, you can also use your other coins such as litecoin or ether (Ethereum’s cryptocurrency) to fund your trades.
Will I be charged a fee to buy and sell Bitcoin?
Yes, they charge fees for making transactions, especially if you’re buying cryptocurrency directly with your card. Typically these will be between 1% and 5% depending on the platform, the payment method, and how much you’re spending. If you intend to trade a large amount, you will typically pay lower fees than with a smaller number of coins.
You can often avoid fees completely by transferring money into your account via bank transfer and using that money to fund your trades.
Will I be charged for deposits and withdrawals?
When transferring coins to another wallet or exchange, you will be charged the transaction fees associated with the Bitcoin blockchain (also known as miners’ fees). These vary depending on the amount of transactions happening at that time, but the fee is usually around 0.2 mBTC (an mBTC is one thousandth of a bitcoin).
When it comes to withdrawing fiat currency (such as GBP or USD), exchanges usually charge depending on the payment method to which you’re withdrawing. The range is usually around 1% – 4%, with the lowest rates charged when using bank transfers.
Do I need a wallet to use an exchange?
No, you don’t. Usually exchanges come with integrated wallets to hold a variety of coins, so you will have an account that holds your coins. However, it is strongly recommended that you transfer your bitcoins from your exchange account to a personal wallet if you’re not intending on trading them soon, or want to hold a large amount of them. It’s safer not to store your coins on an exchange.
What other platforms are available?
The other commonly used platforms are Bitcoin brokerages and CFD trading platforms. Brokerages manage your crypto portfolio on your behalf and get a small commission as a percentage of the total amount (but these fees are included in the advertised price of the coins), whereas CFD platforms are more focused on allowing you to make quick trades to capitalise market fluctuations; this is what online traders use.
Should I use a bitcoin exchange?
Well, it’s up to you. If you want an easy way to invest in bitcoin with either fiat currency or another cryptocurrency, then an exchange will be a perfect platform to do so. You should look into CFD broker platforms if you’re still unsure.
- They enable you to buy BTC instantly
- Other cryptocurrencies are often supported on the same exchange
- You can set the price at which you wish trades to execute
Yes, many have apps available on for iOS and Android. You can download the application from Google Store or Apple Store and exchange your bitcoin on the go.
There are some, but not many. Most exchanges require you to verify your identity when you register an account before you are even allowed to trade. LocalBitcoins is an example of an exchange that works through peer-to-peer transactions, allowing users to transact anonymously. You can choose your preferred seller and the method by which you’d like to pay for your coins (some even offer the option to meet them and pay in cash to keep your spending anonymous).
Absolutely. Exchanges usually have a feature that allows you to see your transaction history as well as your available balances. You will be able to see the history of all the transactions you have made since you joined the exchange.
Yes, and this will depend on a variety of factors, such as the platform you use, verification status, your account age, method of payment used, and transaction history. For instance, if you are transacting with Binance, you will be required to undergo verification for your withdraw limit to be raised. The exact limits depend on the exchange and can be found in our reviews of each platform.
This will also depend on various factors. If a platform has a minimum limit it’s likely to be very low, usually around 0.0005 BTC. You can commonly expect the top limit for cards to be in the £1000s, and the bank transfer limits to be in the £10,000s.
Most exchanges support many different cryptocurrencies, including all the major ones, but there isn’t yet one that supports all of them. If you’re looking to trade for specific coins then check our reviews for sites that allow you to trade those coins.
Yes, in the UK, they are legal. This is also the case in most countries including the US. It’s a good idea to check the law where you are and confirm if they are legal in your country, but in most cases you won’t be breaking any laws by using one.
This depends on the exchange. As the popularity of cryptocurrencies grows, regulation is becoming a more pressing question. Governments and relevant authorities are moving in to regulate the industry, but it’s still very early days. For an example of the direction in which things are moving: Coinbase (a brokerage) attained an e-commerce license from the FCA in March 2018. Check with the exchange you use for its regulatory status.
In the UK, any profit you make from bitcoin is liable for capital gains tax. If you make higher than £11,700 profit over the course of the year you will owe between 10 and 20% tax dependent on your income. In other countries the tax status of bitcoin is different so always check the law in your own country to be sure.
If you send your bitcoins to the wrong wallet address there is no way to recover them. Bitcoin transactions are irreversible, so once you initiate one, that’s it – no going back. Make very sure you’re entering the correct Bitcoin wallet address when moving bitcoins.
This is a major risk with exchanges, as they’re a very attractive prospect for hackers. One of the most famous incidents was the closure of the Mt Gox exchange in 2014, when hackers made away with around 740,000 bitcoins, which was 6% of all existing bitcoin at that time. If this were to happen, it is very likely you would permanently lose any bitcoins you have on the exchange. This is why it’s recommended to keep your coins in a personal wallet if you’re not intending on trading them regularly.
PayPal is not commonly supported. This is because it has previously been associated with chargeback scams. However, there are platforms that accept PayPal payments, such as Localbitcoins.
You can only cancel limit orders, and only before they have been completed. Market orders happen immediately so cannot be cancelled once they’ve been processed. Bitcoin transactions cannot be reversed once they have been made, so once a transaction is initiated or completed, you can’t cancel it.
This is explained fully on our page about bitcoin, so for detailed information it’s good to head there.
But to give a quick summary: an exchange enables you to trade a range of cryptocurrencies, serving as an online marketplace. A CFD broker works the same as an exchange, allowing you to trade against the value of an asset without actually owning it.
A bitcoin wallet is an address/piece of software that stores your bitcoins. An exchange, on the other hand, is a platform where you purchase crypto. It’s a bit like the difference between an online betting account and the bank account you use to pay funds into it. An online betting account (an exchange) allows you to place bets on events (place orders), whereas a bank account (a wallet) stores your money separately from the platform.
Yes, there are bitcoin debit cards emerging that have the ability to exchange between multiple crypto and fiat currencies within their accounts (just like you can have a GBP and USD account within a regular online banking account). A good current example is Wirex, a platform that offers debit card that hold multiple accounts for cryptocurrency and fiat currency, allowing you to convert crypto into traditional currency through the Wirex Wallet. More providers are working on creating cards with this functionality and there’s a good chance this could be the future of trading and spending bitcoin.
Exchanges are a marketplace in which people agree to make trades at a set price.
Like any other asset, the price fluctuates as people are willing to part with more or less fiat currency in exchange for the asset at any given time. In other words, the price of bitcoin on exchanges is determined by simple supply and demand.
Fact-checking & references
Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.
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