The popularity surrounding cryptocurrency has exploded over the last several years. From starting out as an idea that many thought could never be implemented, to having an aggregate market cap into the trillions of US dollars, cryptocurrency is changing the way investing and financial payments work. Considering all of the benefits of holding cryptocurrencies, you may be looking to purchase some for yourself. You may be wondering what the best platforms to trade crypto are. Well, we will answer this question!
Uses of Cryptocurrency
Believe it or not, cryptocurrencies have been around for nearly a decade. However, they became very popular in the years leading up to 2017. This is when Bitcoin had its initial run up to around $20,000 USD. Cryptocurrencies utilize blockchain, or distributed ledger technology.
Blockchain is a decentralized network that contains every single past network transaction and as a result of this is immutable. Each transaction, which is contained in a block, must be approved by a series of connected nodes that verify previous blocks, through the use of cryptography, before additional transactions can be added. Additional blocks are added to previous ones creating a chain, hence the name blockchain. This technology is mostly used as the backbone of cryptocurrencies – digital tokens that can be transferred between parties which do not rely on central parties to facilitate the change of ownership.
You may want to own cryptocurrencies to simply be able to maybe person to person payments. Cryptos are great because central governments do not control them and are mostly safe from the effects of inflation. Companies running cryptocurrencies cannot simply ‘create’ more coins like governments can with their domestic currencies. cannot simply Another reason you may want to own cryptos like Tron, Bitcoin, and Dogecoin is as an investment.
No matter the purpose, you need to conduct due diligence before buying cryptos. Over the last several years, many scams have surfaced. Cryptos have been created that have no purpose other than to make the creators money. These coins (often referred to as sh*tcoins) are usually part of get rich quick schemes. Once they release the coin, holders just try to pump up the price and then dump it. This can leave investors in the dust with huge losses.
With this in mind, there are a ton of legit and reliable cryptocurrencies on the market today.
Investing In Crypto
Before you start investing in crypto, you need to do your research. Also be sure to only invest funds that you are able to lose completely. The crypto markets are very volatile, and coin market values can fluctuate daily. Before buying any type of crypto, ask yourself what your goals are. Do you really believe in the underlying technology of the blockchain, and see the uses of the crypto beyond just being a payment method? If so, you may want to invest – just be sure to buckle in for a possible wild ride.
If you are looking to make a quick buck by investing in crypto, chances are you will get burned. Markets move all the time, and unless you are paying attention to them 24/7, you can lose a ton of money. There is a chance you can make a decent amount investing in crypto though. Just beware that historical returns are no guarantee of future performance. Plus, if you are looking to day trade cryptos, you will need to do your research about day trading income tax.
Best Platforms to Trade Crypto
Now that you have a better understanding about the technology underlying cryptocurrencies, as well as the many uses of crypto, lets discuss the best platforms to buy, tell, or trade cryptos on. There are many out there – you need to beware of the ones that are just trying to scam you.
Here is a list of the best platforms to trade crypto on. Not only will we cover the pros, we will also briefly discuss some negative aspects to each of these platforms.
Even if you are not familiar with the crypto space, it is probably safe to assume that you have heard of Coinbase. Coinbase is definitely the most popular and largest crypto trading platform out there today.
This platform has millions of users from around the world. Founded in 2012, it has expanded to over 20 countries and has a user interface that makes it easy to use for newcomers. Not only can you access this app through your smart phone, but you can also interact with the platform through your desktop or laptop computer.
One of the biggest advantages of Coinbase is that it is a public company on the US Stock Exchange. This means that the company is subject to regulation from different governmental agencies. One of these governing bodies is the US Securities and Exchange Commission (SEC). This should give you assurance that the site is not a scam just trying to steal your money. However, due to regulation, and the fact that Coinbase has to make money for their shareholders, they need to charge fees. Compared to the other best platforms to trade crypto currencies, Coinbase’s fee structure can be a little high.
There are some downsides to Coinbase though. Unfortunately, the platform is only available in 32 countries. It currently has no support in some large, global, and important markets. One of these being India.
In addition to this, Coinbase doesn’t offer a ton of cryptos on their platform. They mainly focus on the top coins like Bitcoin, Ethereum, and Litecoin.
Another one of the best platforms to trade crypto on is eToro. This platform very easy to us use, and is open to traders from more than 140 countries worldwide. Unlike other platforms, eToro supports a ton of cryptocurrencies. Some of the cryptos you can buy on eToro include Bitcoin, Ripple, Ethereum, Dash, Monero, Litecoin, Cardano, NEO, Stellar, EOS, IOTA, and more!
However, unlike other platforms, eToro only allows your to buy cryptos. If you want to sell them, you will have to transfer your holdings to a different platform or wallet. Furthermore, this platform doesn’t support fiat money. This can be a headache.
Let’s look at an example. Suppose you want to buy Monero which is not on Coinbase so you want to use eToro. You cannot deposit funds onto eToro to buy this coin. Instead, you will have to get a Coinbase account, deposit funds, buy a cryptocurrency, transfer it to your eToro account, then exchange one crypto for the other. The fact that eToro does not support fiat money makes the process a little confusing and time consuming. Also, you will have to pay fees for most of all of the transactions listed in the process above. That is the price you have to pay to invest in some less popular cryptos.
Another one of the best platforms to trade crypto on is Kraken. Like the other platforms mentioned above, Kraken is well known, has a strong reputation, and has reasonable fees. It was originally started way back in 2011, and has since expanded to over 20 different countries across the globe. One of the great benefits of Kraken is that it offers a wide range of cryptos to chose from. Kraken not only supports the big names like Bitcoin, Ripple and Litecoin. This platform also allows users to trade Cardano, Monero, Stellar, and even Tron.
Lastly, like Coinbase, you are able to withdraw fiat currency and transfer it to your bank on Kraken.
Like many of these platforms, there are some downsides. The first being that this platform is only available in a handful of markets across the world.
Best Platforms to Trade Crypto – Summary
Everything related to cryptocurrencies has become very popular as of late. People are buying crypto as a way to transact between individuals and business, and are also using crypto as an asset to invest in. If you are looking to buy crypto, make sure you conduct a fair amount of research and understand all of the risk. Crypto market values are very volatile, and you can lose a substantial amount of money that you put into them.
If you are aware of the risks, and are looking to buy a crypto, keep this list of the best platforms to trade crypto in mind. While there are many platforms out there, Coinbase, eToro, and Kraken are among the best.