Woman using modern laptop computer with Bitcoin .

The astounding growth in the value and popularity of Bitcoins and other cryptocurrencies is making even the most cynical nay-sayers sit up. However, questions of security and validity are still open for discussion and under intense scrutiny.

Like all other currencies, Bitcoins can be bought and sold through Bitcoin exchanges spread across the world. Since many of these exchanges operate online, safety remains the key concern of users.

The importance of safety can be gauged by the downfall of Mt. Gox, a Tokyo-based Bitcoin exchange. The exchange, which went online in July 2010, had emerged as one of the largest in terms of popularity and volumes, offering fast transactions and low fees. However, in February 2017, the exchange stopped all Bitcoin withdrawals, blaming a well-known issue with the Bitcoin protocol, called “transaction malleability,” wherein the ID of a transaction could be tampered with before its approval by the Bitcoin network. This, along with several other operational issues, led to the closure of this exchange, run by inexperienced management.

But the market for digital currencies bounced back, with hectic activity witnessed at various other exchanges. Here’s a list of the top exchanges in terms of safety and trading options offered by them.

Top Bitcoin Exchanges

Bitstamp

One of the top Bitcoin exchanges in terms of trading volumes is Slovenia-based Bitstamp. This exchange facilitates instant buy and sell orders for the USD/BTC pair, with withdrawals and deposits available in other currencies as well. Trading on this exchange can be done by using limit orders, where a pre-determined price can be set for buy and sell orders. Known for its sound audits and regulatory compliance, the exchange is run by two youngsters, Nejc Kodrič and Damian Merlak.

To trade in Bitcoins, a person needs to open an account with Bitstamp, followed by transferring money into the account through SEPA or international wire transfer. Besides the fees on withdrawals, the exchange earns a trading fee on successful trades, based on the 30-day trading history of the client.

Bitfinex

This Bitcoin trading exchange is a platform providing advanced trading tools, such as margin trading, short selling and liquidity swaps. Launched in 2013, this exchange registers huge trading volumes and is highly focused on ensuring safety and security. About 99.5% of its assets are stored in cold storage, with only 0.5% in wallets for quick deposit and withdrawal transactions. A backup of the exchange’s database is taken every day, followed by encryption and archiving.

Coinbase

This one-stop solution for storing, spending, buying and accepting Bitcoins acts as a Bitcoin processor for many businesses and merchants, including Expedia and Dell. This San Francisco, California-based company offers its services in the US and some countries in Europe. This exchange requires the account holder to link their bank account with their Coinbase account and make automatic transfers for every transaction, which may take some time. This feature makes this exchange unfit for day trading, but highly useful for newcomers.

Cryptsy

An exchange that allows trade in not only Bitcoins but other cryptocurrencies as well, which are collectively called altcoins. Headquartered in Florida, this exchange is to be beta-tested in the near future and plans to offer merchant services soon. Launched in 2013, this exchange has been received well and already has a huge customer base, with high trading volumes.

Kraken

Loaded with features, this exchange offers advanced order and trading tools, such as stop loss, stop loss limit, trailing stop, trailing stop limit, take profit limit, stop loss take profit limit, leverage, margin, etc. The exchange caters to both sophisticated and beginner traders through trades in Bitcoin, Litecoin, Dogecoin, Ripple and several other cryptocurrencies.

BTCChina

Founded in 2011, this exchange supports trading of Bitcoins and Litecoins in the Chinese currency, while allowing for deposits and withdrawals in Hong Kong and US dollars. Apart from high trading volumes, this exchange’s focus on cold storage techniques is its plus point.

Bitcoin Source

A recent entrant, this exchange has already made a name for itself in the Bitcoin Exchange List. Based in Belize, this exchange accepts deposits via credit card, in addition to ACH transfers. Offering trading options with US dollars and euros, this exchange stores 98% of its funds in cold wallets or offline bank vaults.

This list does not end here, with other exchanges such as CampBX, Bter iTBIt, OKCoin, HitBTC and AskCoin also registering good volumes. Traders wishing to trade in Bitcoins need to check features like liquidity, fee schedule, country where it is located, trading facilities and the focus on security to make an informed choice.

Disclaimer

If you liked this educational article please consult our Risk Disclosure Notice before starting to trade. Trading leveraged products involves a high level of risk. You may lose more than your invested capital.

 

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