Now that you know about wallets, you should find a place to trade them. Nowadays you can find myriad exchanges on the web. However, due to strict US regulations, the American trader only has access to a few of them. These exchanges normally charge different fees depending on the type of orders you enter and the daily volume of trades. If you are a “Taker” you will pay more, and if you are a “Maker” you will pay less or nothing or even get paid to enter orders. A Taker is somebody who consumes liquidity by issuing a “Market” order while a Maker is someone who generates liquidity by issuing a Limit order. For example , if you the market displays 10 bitcoins to sell at $4000 and you send a Market order to buy 1.5 bitcoins , then you’ll consume 1.5 bitcoins worth of liquidity and now the trader will only see 8.5 bitcoins for sell @$4000. Now if you send a Limit order to buy 1.5 bitcoins for a price of 3999.99, you are creating 1.5 bitcoins of liquidity that a prospective seller can use if he likes your price. The tradeoff is that your market order will execute instantly while the limit order has to wait for the opposite side to appear. You are compensated for this risk by better fees and better execution prices.
Coinbase (CoinbasePro) is the biggest and safest (so far) exchange in the US. They are so good at what they do that the owner of New York Stock Exchange (ICE: The intercontinental Exchange) has bough a minority interest in them . Your holdings are secured by the FDIC up to $250000. Coinbase also has a good wallet and it is the gateway to CoinbasePro, which is a great exchange for trading cryptocurrencies. For a list of all supported cryptocurrencies : https://support.coinbase.com/customer/en/portal/articles/2630943-supported-digital-currencies . So in order to participate on gdax , you either send cryptocurrencies to your GDAX address, or buy some cryptos on Coinbase and send them to CoinbasePro for free. The fees charged by CoinbasePro for trading are following :
|30 day USD Volume||Maker Fee||Taker Fee|
|$0 – $10M||0%||0.30%|
|$10M – $100M||0%||0.20%|
If you’d like to open up an account on Coinbase , you can receive $10 from me when you buy $100 worth of cryptos https://www.coinbase.com/join/5a198f8cad5a4000e3b68004.
Binance is currently the world biggest cryptocurrency exchange by volume. While most of the exchanges , including Binance, are centralized exchanges , like New York Stock Exchange is, Binance is building a decentralized exchange to take its place. It is considered pretty safe and has been subject to a few hacking attacks in 2018 , but as it’s founder proclaimed, “All funds are SAFU” (https://blockexplorer.com/news/funds-are-safu-crypto-meme/) . As a result of these attempts , the exchange established a Secure Asset Fund for Users to offer protection for such incidents. Check out the news item : https://support.binance.com/hc/en-us/articles/360006675312-Incident-Recap-on-Irregular-SYS-Trading In order to trade on this exchange , one must already own some sort or cryptocurrencies and transfer them to the site . The user interface is clean, they trade in almost any coin you’ve heard off and they have the smallest fees out there and they are even smaller if you pay them with BNB (which is a cryptocurrency coin created by Binance). Currently the fee is 0.10% for both makers and takers or 0.075% when paid in BNB. If you trade a lot of coin , these fees go down to 0.02% and 0.04%. For a comprehensive list go to : https://www.binance.com/en/fee/schedule. If you want to open an account , go to https://www.binance.com/?ref=23658026.
Bitmex is a beast. If you like high stakes games, this is the place for you. Bitmex doesn’t trade directly in cryptocurrencies but in their derivatives , respectively futures contracts and one week options (of sorts). The great thing about Bitmex is that you can short the cryptocurrencies, use leverage up to 100 times and also use them to protect your cryptocurrency exposure to USD. I will describe in a future article how to do this. The exchange has been so successful that it dwarfs (in volume) established futures exchanges like Chicago Mercantile Exchange(CME) or Chicago Board of Options Exchange (CBOE). This exchange also doesn’t accept fiat (like USD or EUR) so you’ll have to transfer bitcoins to it in order to trade it. The fees are pretty competitive : you pay 0.075% as a taker but , get this, you get paid 0.025% when you are a maker. The options (Upside and Downside) contract are free to trade . For an explanation of fees visit : https://www.bitmex.com/app/fees . If you want to open an account ,go to https://www.bitmex.com/register/quJVmJ to receive discounted fees.
The thumbnail photo was taken by Carlos Machado and you can find more of his work at https://www.pexels.com/@cgoulao