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All too often, beginner cryptocurrency traders set their sites on a particular crypto without having a particular cryptocurrency exchange in mind. This is fine if you are a value investor for a Bitcoin trade and other major cryptos like Ethereum, Litecoin and Bitcoin Cash. In that case you can simply buy and sell on PayPal if you do not mind paying a 2.5% transaction fee per trade.
On the other hand, if you want to buy and sell cryptocurrencies for many trades so you can take profits quickly, buy more cryptos, and trade again, then 2.5% per trade may be an annoying and unnecessary expense. Likewise, if you do not want to limit yourself to the big movers mentioned above explore some of the exciting altcoins and non-fungible tokens that have been exploding so far this year, it might behoove you to familiarize yourself with the top Crypto exchanges for 2021.
Best Cryptocurrency Exchange: Depending on Geography
If you do not live in the United States, Binance is might be the best cryptocurrency exchange. The transaction fees are low, the lowest of any major exchange, and the ease of use is high. Binance allows you to trade over 175 cryptocurrencies and digital assets, including derivatives. Moreover, Binance has great trust record in that when their crypto exchange was hacked, they refunded their users via cryptos that had been set aside just for that purpose. Unfortunately, United States citizens do not have access to possibly the best crypto exchange . Americans also do not have access derivatives trading platforms like Bitfinex and BitMex.
For those living in the United States but not within the State of New York, some great options include Kraken, Huobi and Gate.Io. Based in San Francisco, Kraken is considered by some to be the best exchange for margin trading but using leverage in that way is especially dangerous for beginner traders and might best be left to advanced traders. In 2014 Kraken was considered to be such a secure platform that it was chosen to play an assisting role in the Mt. Gox fund recovery. Kraken did, however, suffer a flash-crash in 2021.
To operate a cryptocurrency exchange in New York State, a Bitlicense is needed. For those living in New York State, top cryptocurrency exchanges include Coinbase, Coinbase Pro, GDAX and Gemini. Gemini was founded by the Winklevoss twins, made famous by movies like The Social Network and Banking on Bitcoin. Being that the twins also own approximately 1% of all the world’s Bitcoin, they have a vested stake in Bitcoin’s success. Coinbase, also based in San Francisco, California, by New York standards, has relatively low fees and decent ease of use. Coinbase also now owns Coinbase Pro and GDAX. Robinhood also has a Bitlicense but due to the controversy related to the short-selling of certain stocks like Gamestop, Robinhood may or may not be the best exchange for you.
Best Crypto Wallets for 2021
Regardless of which cryptocurrency exchange you select as your preference, you should understand that even the best crypto exchange is not a bank. Advanced traders have their exit strategy mapped out in advance before they commit large amounts of capital and you should too. If you sell cryptocurrencies, you should move your fiat currency into some type of bank account before increasing the size of your trading account. That way, if there is a problem exporting your fiat from the exchange platform, you will know before committing large amounts of your investment capital.
Likewise, if you choose not to sell your cryptocurrencies and other digital assets any time in the near future, the trading platform is not the place for you to hold cryptocurrencies and other crypto assets, like non-fungible tokens (NFTs). Because of the dangers of identity theft and hackers, the best place to store your cryptocurrency gains is in some kind of cold storage, like a crypto wallet.
The decision to buy and sell cryptocurrencies requires the beginner to first choose a cryptocurrency exchange. In addition to transaction fees, trading fees, payment methods, payment options, variety of cryptocurrencies and trade volume, beginner traders should pay close attention to geographic factors. Due to the Mt. Gox bankruptcy scandal, regulatory agencies have been taking a closer look at cryptocurrency exchanges and the result has been limited access, depending on the residence of the trader and the bank form the which the fiat used to buy the crypto assets is being sent. When all of the above factors are considered, you can decide on the best crypto exchange for yourself.