How to Pick the Right Bitcoin Exchange

By: David Marc
Updated: June 1, 2018

Picking the right crypto exchange can be confusing, but we at bitreview have done much of the heavy lifting to make your life easier!  It is unfortunately not simply a question of picking the exchange with the lowest fees. There are many factors that need to be taken into account before you begin trading at a bitcoin exchange.  

The Fundamentals

Check to see which bitcoin exchanges accept customers from your country.

The pool of accessible exchanges can vary dramatically depending on where you live.  For instance, due to a very specific regulatory environment some exchanges target only the USA while others do not accept US customers at all.  

How Flexible are you on Deposit Type?

While it has gotten easier to deposit in credit card more recently, bank wire (of all local varieties) is still the overwhelming top deposit method used by exchanges.  If you absolutely must deposit using a particular method, filter to check only the exchanges that accept it.

Are you just into Bitcoin or other crypto as well?

Most of the large exchanges have integrated the most important alternative cryptocurrencies like ethereum and litecoin.  If you are looking to trade additional crypto assets outside of bitcoin, make sure to check which exchanges offer your chosen coins!

What are your goals?

The best exchange might be entirely different depending on what you are looking to accomplish.  For instance, we would not recommend the same exchange to an investor looking to buy and hold bitcoin to a day trader making very frequent trades.  Here are a few questions to consider when picking your exchange.

Are you a long term investor or a short term trader?  

If you are a long term investor, it makes sense to find the best exchange accepting your home currency and use them to buy your bitcoin as needed.  For short term traders, it might very well make sense to use exchanges that do not necessarily have markets in your local currency, or that don’t accept fiat deposits from your jurisdiction.  

For instance, a Canadian long term buyer would be best served setting up an account at QuadrigaCX and buying their crypto as needed.  However, frequent traders would be better off buying bitcoin and then transferring their bitcoin to larger btcusd exchanges like Bitfinex- with lower fees, higher volumes, and margin trading accounts.  

What size purchase are you considering?

For small purchases, the deposit and withdrawal fees are most likely more important than the trading fees, while for large purchases it is the opposite.

For example, UK buyers looking to make a small purchase would be better suited using a local peer-to-peer exchange which accommodates local and free deposit options, despite the fact that bitcoin is much cheaper at the larger gbpusd exchanges.  For larger purchases, it makes sense to buy from the larger exchanges, despite the fact that you’ll need to pay for international bank transfers (UK banks will not provide exchanges bank accounts).

Now you can pick!

You can use our bitcoin exchange comparison tool to set the filters to find the exchanges best suited to your needs.  From the remaining exchanges, pick one that offers the best fees and the highest volumes.

Note that the exchange market has become much more mature in the previous years; however, many exchanges still operate in a legally grey area and might not submit themselves to the same rigorous compliance standards that large banks usually adhere to.  Volume is a good, though not at all definitive, indicator of the seriousness of an exchange. Read up on how best to protect your wealth when using a bitcoin exchange.