What Is A Crypto Exchange?
A crypto exchange is a service that lets you purchase, sell or exchange cryptocurrencies. To be able to trade on the platform, you will have to open an account with your chosen exchange. Reputable Exchanges will provide you with a digital wallet. This wallet will allow you to securely store your purchased coins. For maximum security, I do recommend that you use an offline hardware wallet.
Once your account is set up and verified, you can start trading a variety of different currencies. The most common type of currencies exchanged are bitcoin and Either. However, the best exchanges offer other types of Altcoins as well. This is good news for people who want to invest and trade without worrying about the specific type of cryptocurrency they want to buy. Coinbase and Binance both offer an array of hundreds of coins to purchase or trade.
Let’s take a peek behind the stage and find what Is the best crypto exchange For US residents!
Who Uses Crypto Exchange?
A Crypto exchange is a very popular service offered by companies that facilitate trades or exchanges between two parties. An exchange can be thought of as a digital room where traders can come to make a supervised trade. By attracting users to their digital space an exchange provides liquidity to their users. Unlike a broker, an exchange does not get involved in a trade or exchange. The role of the exchange is simply as follows:
- Provide the digital space for traders to engage
- Establish the security protocol for exchange parties
- Provide a storage vault for digital coins
For traders from the USA, any exchange that you use will have to be regulated by the Federal SEC (Securities Exchange Commission). The SEC is a federal government regulatory agency whose responsibility is to protect investors against fraudulent or manipulative market practices.
There are three exchanges that I recommend which are all regulated by the US SEC.
- Coinbase – is my top pick because they have superb fast responding customer service.
- Binance.us – Offers more altcoin options and higher liquidity but customer service communication can be difficult.
- Gemini – Have a nice user interface. However, their options and customer response are still developing.
Impact Of Global Crypto Exchange
The Crypto markets have in recent years, been the vehicle that has created hundreds of new millionaires. While it is possible that some of the new millionaires could have stumbled into it by accident. The vast majority of winners used a proven method of careful calculation.
Many people argue that the number of exchanges worldwide is limited, and this might be true at some level. However, if you look deeper into it, you will see that the Crypto world is in its infancy. The current and projected rate of growth is phenomenally fast. As of the time of this writing the daily global market cap is almost 900 Billion! Regardless of what some of the noisy pessimists say the Crypto currency market is here to stay!
Bitcoin Is Not The Only Cryptocurrency
As you might know, already bitcoin is not the only cryptocurrency available. It has established a reputation because it was the first digital coin ever minted with a reliable blockchain. In the years since Bitcoin pioneered the way, thousands of coins on hundreds of blockchains have been minted. Some of the most popular are Ethereum, Dogecoin, and Ripple. Any of our recommended exchanges are viable answers to the question, “What Is The Best Crypto Exchange For US Residents.”
Experienced traders will usually try to become familiar with 10-15 coins. This gives a trader a wide range of trading options. While at the same time allowing you to become familiar with your chosen coins’ personalities.
What Is The Best Crypto Exchange For Us Residents?
Beyond offering a wide range of altcoin options and plenty of liquidity there are three primary factors to consider when choosing the best crypto exchange.
In a world of digital assets security is of paramount concern. If there is any question about an exchange’s security systems, run away! Ultimately, you will want to eventually purchase a hardware wallet to keep any coins you plan of holding for a while.
If you have ever been on hold for an extended period or waited days for a reply email you understand the importance of customer service. There is no explaining the stress of some customer service issue that takes days to resolve via a drawn-out email exchange. Save yourself some headaches and use an exchange that has a responsive customer service record!
Maker, Taker, Spread, Gas, and Deposit/Withdraw are Some of the fees that you may see.
- Maker fees, as the name suggests is a fee charged to the party making an altcoin available for exchange. Generally, a maker will put an order out that offers a coin at specific terms.
- Taker Fees are the fees charged to someone who takes an order off the books. Or in simplified language buys a coin that is being offered. That party is the taker because they are taking liquidity off the exchange. Coinbase and Binance both have even maker-taker fees. Some exchanges charge more for takers simply because the exchange wants to maintain liquidity.
- Spread Fees are the fee structure that some exchanges employ rather than the fixed Maker/Taker fee system. If you have ever traded stocks or forex than you know and understand what the spread fee system is.
- Gas Fees, as the name implies pay for the power it takes to process transactions on the blockchain. Most any exchange that employs the Ethereum blockchain will incur Gas Fees. While Ethereum Blockchain is the most well know of the chains which charge gas fees there are others such as Solana and Avalanche.
- Deposit/Withdraw fees – It is no secret that eventually you will want to withdraw your coins to some fiat currency. It is wise to understand the deposit and withdraw fee structure on your chosen exchange.
- Staking Fees – In recent times staking has become increasingly popular! Staking simply involves committing some of your funds to hold a specified coin. Committing to holding a particular coin helps your exchange provide liquidity. Consequently, some exchanges will pay interest as a way to reward their customers for staking a coin.
These factors can make or break your trading experience. Take your time to understand the dynamics of your chosen exchange’s business culture.
How Do I Start Cryptocurrency Trading?
Once you have chosen the exchange that you feel will most adequately serve your needs it’s time to set up an account. This is the first step. During the setup process, you will have to verify your account by sending an ID and proof of residence. Most USA-based exchanges will require verification using a utility bill or bank statement.
You are now officially a crypto investor and trader. However, there are some things you will have to learn before making any real money from the crypto market. Spend a few weeks watching the market move. If you can afford it subscribe to a coaching service.
Some traders from the USA feel restricted by the regulation of the SEC. It is certainly true that getting licensed by the SEC is a difficult and expensive process. As such a new exchange that may have reliable and promising protocols may not be able to initially become licensed. So you could make the case that this limits opportunity from the USA. However, as a USA trader myself, the piece of mind that comes from SEC regulation is worth the sacrifice.
After having examined all the evaluation criteria I use to appraise any crypto exchange I can tell you that there are only three exchanges that I recommend for USA traders or traders of any country of origin. Those three exchanges are:
Let us know in the comments below what exchange you have chosen to open your account with. Tell us what your experiences have been whether good or bad!
Good luck trading!