Unless you’ve been living under a rock for the last few years, chances are you know at least a little bit about cryptocurrency. If you don’t, you can start by checking out my recent post on everything you need to know about cryptocurrency before investing. Since the bitcoin blockchain was first released in 2009, the systems and platforms used for cryptocurrency trading have evolved tremendously. The first trading platforms to exist for cryptocurrency were essentially a free for all. There were no regulations, security, or precautionary measures in place to prove people’s identities before trading. Today, you would never get away with that.
Strict security and regulatory systems have stepped into the crypto space to ensure increased security and reliability for traders. Not only has this allowed people to feel safer and more at ease when making investments or trades with cryptocurrencies, but it has also aided in establishing a fractured trading ecosystem. This simply means that there can now be hundreds of trading platforms for people to choose from.
With so many available platforms however, the tricky part is choosing the one that is best suited to you. You want to ensure that you have a good understanding of what each platform offers so that you can choose accordingly. You will likely base this off a range of factors which may include security, free structure, history, reliability and supported cryptocurrencies.
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Why Are Some Crypto Exchanges Not Available in the United States?
Many cryptocurrency exchange platforms in the United States are being regulated by the Commodity Futures Trading Commission (CTFC), which not only enforces a host of rules and regulations, but also enforces anti-money laundering programs and requirements. This has made it hard for crypto traders and investors in the United States to know which crypto exchanges to sign up for and use.
Due to all the regulations around crypto exchanges, some states have even been forced to obtain specific licensing before they can even operate. It is very important to educate yourself on the various risks associated with cryptocurrency before committing to choosing a platform. These strict regulations have made it seemingly impossible for your average American based crypto trader to find and sign up for a reliable and well-known exchange as figuring out which ones they can use can be very complex and time consuming.
What To Consider When Choosing a US Crypto Exchange
There are several factors you need to consider when choosing the crypto exchange that is right for you. Some of these factors may include the following:
- To what extent do they identify you before you create your account?
This may or may not be something that you care about, but it is certainly worth noting that many crypto exchanges will enforce more identification documents than others. This may include asking for proof of address.
- What are the trading limits?
Also, worth looking into is how high the exchanges trading limits are. There are some exchanges in the US that offer far higher daily trading limits than others. So, if you have quite a lot of capital that you plan on trading, you need to ensure that the exchange will allow you to trade that much.
- Do they offer currency support?
It is important to note if the exchange you plan on using offers fiat currency support. This is particularly important if you know you will be trading your cryptocurrency for USD.
- How high are the trading fees relative to other exchange platforms?
Trading fees can heavily vary based on the exchange. Make sure you are aware of how much it is going to cost you each time you buy and sell as this may sneak up on you, if you don’t know it’s coming.
- How long does it take to deposit and withdraw your money?
Some crypto exchanges ensure that your money is deposited and can be withdrawn within a few hour – 24 hours window, while others can take days. If you plan on making a trade, the same day you sign up for the exchange, you need to make sure that you can have your money immediately deposited.
- Has the exchange been prone to hackers?
There are many exchanges that are known to be frequently targeted by hackers. Make sure you do your research before signing up for a crypto exchange to ensure that the one you are signing up for is not one of them and has good security measures in place to protect against this. Specifically look to see if they offer two-factor authentication.
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So cut to the chase! What are the top cryptocurrency exchange platforms in the United States?
I have specifically chosen the following 5 cryptocurrency exchanges, due to my research which shows that these offer the top fees, security, and trading pairs for crypto traders in the United States in 2021.
The information given for each exchange has been obtained via the exchange’s official websites.
Coinbase, founded in 2012, is well known as the most popular, user friendly crypto exchange in the United States today. Coinbase offers a wide range of products including crypto investing, a trading platform, custodial accounts for institutions, and a crypto wallet. When Coinbase first came out, it was only hosting users that wanted to invest in Bitcoin. It has since rapidly expanded and now hosts over 39 cryptocurrencies for the purpose of trading, investing, and staking. Currently, all US citizens can use and access Coinbase, except for people living in the state of
What’s unique about Coinbase, is that although it is extremely user friendly, a more experienced trader can access a more complex interface via Coinbase Pro. Coinbase pro offers these experienced users advanced features as well as real-time charting tools. Additionally, it offers a superior security system.
Fortunately, due to the incredible security systems and user regulations that Coinbase has in place, they have never suffered from any major crypto hack. Another great feature of their security system is that it guarantees that any fiat currency deposited by a resident of the United States into the Coinbase app or platform is protected by insurance up to $250,000. Speaking of security, all US residents must also be able to provide government issued ID as well as a selfie to verify themselves during the sign-up process.
Now here are the facts. Coinbase does not have a daily trading limit, but it does have a daily withdrawal limit of $25,000. Although Coinbase does support USD deposits as well as other fiat currencies, you do have to watch out for their higher-than-normal fees, which can range between 0.05% – 0.25% (taker) and 0% – 0.15% (maker).
Binance is a Hong-Kong based crypto exchange that has become extremely popular around the world, due to its competitive rates and ease of use. In 2019, Binance also launched ‘Binance US’ which is the Binance platform specifically dedicated to US citizens to comply with the various crypto exchange regulatory policies. Binance US has become a large reason for their great success, with roughly 15% of all traffic going there.
Binance has started offering both credit card and wire transfer purchases of cryptocurrency at a premium due to partnering with third party companies such as Simplex. Binance currently offers nearly 200 coins on their exchange, with the most popular coins including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Ripple (XRP).
What users love about Binance is that it offers a flat rate of 0.1%. For traders using the futures trading platform on Binance, fees can even be as low as 0.02% – 0.04%. Binance US users can also use USD for all deposits and withdrawals via ACH.
The key products currently offered through Binance include Binance Financing, Binance Savings, Staking, Binance Smart Pool, Binance Visa Card, Binance Loans and Binance Liquid Swap. It is also important to note that Binance has a simple limit structure being that “level 1” accounts can withdraw a maximum of 2 BTC every 24 hours and “level 2” accounts can withdraw a maximum of 100 BTC every 24 hours. You do have to fill out a very basic KYC form and provide proof of identity via government-issued ID and a selfie.
Gemini was founded in New York City in 2014 and was launched to U.S customers by October of 2015. Gemini has become extremely popular over the years and is now one of the top 15 cryptocurrency exchange platforms in the world based on trading volume. The best thing about Gemini is that unlike many other crypto exchanges, it is available to US citizens in all 50 states as well as people in over 50 countries!
Gemini offers an extremely user-friendly interface for novice crypto traders as well as a more advanced section called the ActiveTrader platform for the experienced traders to benefit from. This will include extra features such as advanced charting, tracking multiple order types and block trading. For U.S dollar trades, Gemini currently offers 33 cryptocurrencies, but is constantly expanding.
One unique thing about Gemini is that their trading minimums are not very easy to research, as they differ depending on the coin. For example, the minimum trade amount for bitcoin is 0.00001 bitcoin and for Ethereum it is 0.001 ether. They also charge a flat rate of 0.5% above the current trading price as well as a transaction fee dependent on spend. Fortunately, Gemini doesn’t charge a transaction fee for deposits from a U.S bank account or wire transfer. Although, for a debit card purchase they will charge 3.49%.
In terms of Gemini’s level of security, all USD deposits made are FDIC insured, which makes Gemini a great option for institutional or large-scale traders. Gemini is also subject to New York banking law which has deemed it to be the most secure crypto exchange for US-based cryptocurrency traders. Additionally, Gemini is very strict in enforcing government issued ID + a selfie for verification as well as address verification that includes a utility bill less than 90 days old. There’s is no messing around with Gemini’s security team!!
So, are Cryptocurrency exchanges worth it?
There is no correct answer to this question as it is totally dependent on each individual trader’s crypto goals. You don’t necessarily need to use a dedicated crypto exchange platform to trade crypto, however it certainly provides many more crypto-specific account features.
That being said, you can still utilize platforms such as Webull and Robinhood for crypto trading, but again these platforms are not dedicated to crypto trading so are lacking many features that you may find useful throughout the crypto trading process.
Read the Entire Investing in Cryptocurrency Series
- What on Earth is an NFT!?
- Blockchain Technology Uses and Growth
- Buying a $65,000 Porsche with $6,028
- BlockFi Review: Investing in Cryptocurrency the Right Way
- Everything You Need to Know About Cryptocurrency Before Investing
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.