How Start Investing in Crypto on Popular Exchanges

For a majority of new crypto users, buying cryptocurrency for the first time will involve using a crypto exchange. Here’s what you need to know about the most popular options.
Updated Sep 21, 2022 at 6:27 p.m. UTC
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Griffin McShane is a freelance writer for CoinDesk, currently living in Brooklyn, NY. Griffin has also written the Inside Crypto newsletter for Jason Calacanis' Inside.com and is a member of the International Association of Privacy Professionals (IAPP).

If you’re looking to take the plunge into cryptocurrency investing or are perhaps keen to explore the possibilities of an all-crypto lifestyle, then your first port of call will likely be a crypto exchange.

While traditional payment apps like Venmo or Cash App offer the option to buy and sell cryptocurrency, the features can be limited compared to what centralized crypto exchanges (CEX) offer.

Today, there are many different crypto exchanges from which to choose, with each offering a wide range of assets and features. We will take a look at the four most popular crypto exchanges and how to start trading on them.

Coinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam and has since become a publicly traded company on the Nasdaq and the largest crypto exchange in the United States by trading volume. Trading services on Coinbase are available throughout the United States (excluding Hawaii) and over 100 countries around the world.

Coinbase offers various methods for converting your fiat into cryptocurrency. Users can make deposits using their debit cards, linked bank accounts or through PayPal. Depending on which method you use, withdrawing fiat may be delayed until the transaction is cleared with Coinbase.

Additionally, Coinbase has a 3.99% fee for credit card purchases and a 1.49% fee for bank account purchases.

Once you have signed up and funded your account, buying, selling and trading cryptocurrency is straightforward.

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Coinbase account setup (Coinbase)

The platform offers a simple user interface that gives users immediate access to over 100 different cryptocurrencies. Despite having higher fees compared with other platforms, Coinbase’s simple-to-use interface makes the platform a perfect place for beginners to buy their first crypto.

However, if you’re looking to access more advanced trading features, such as limit orders and buying on margin, this platform may not be for you.

Investing on Kraken

Kraken was founded in 2011 by Jesse Powell as a more secure crypto exchange alternative following the hack of Mt. Gox.

Unlike Coinbase, Kraken is almost entirely a web-based crypto exchange, with its app only available in a few countries. The web version of the crypto exchange, however, is available in the United States everywhere except New York and Washington, and offers its services in nearly 200 other countries.

Kraken offers the smallest selection of cryptocurrencies to trade with in comparison to other platforms, with just under 100 options. However, it does provide more fiat currency options compared to most platforms and contains more in-depth trading and graphing data through Kraken Pro.

To get started with your Kraken account, you need to sign up and verify your identity by following the know-your-customer (KYC) measures when prompted. Once registered, you can fund your account with debit or credit cards, bank transfers or crypto transfers – provided Kraken is available in your country.

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Kraken account setup (Kraken)

Investing on Binance

Binance was founded in 2017 by Changpeng Zhao. While the company was originally based in China, the company relocated soon after due to increased crypto regulations in that country. Since then, Binance has launched several independent, affiliate exchanges as a way to expand internationally and stay within regulations.

Unlike other exchanges, Binance uses its own blockchain system, Binance Smart Chain, to facilitate trades on the exchange. It also has its own native utility tokens called Binance coin (BNB.) BNB can be used to purchase assets on the exchange (at a lower fee rate than using other trading pairs,) facilitate payment transactions, participate in initial exchange offerings (IEOs) and pay for gas fees.

Binance offers one of the widest selections of cryptocurrencies compared to the other popular exchanges, with over 500 cryptocurrencies available for trading. The exchange additionally has one of the lowest fees, with trading and purchasing fees ranging between 0.01% to 0.10%.

Further, Binance typically offers the widest range of features of any centralized exchange in the market. However, the availability of these features is largely dependent on location. Due to issues with crypto regulation across different countries, many Binance features may be disabled where you live. As a result, the exchange can be a bit fragmented and difficult to navigate.

If you are new to crypto, the overwhelming number of options available means Binance may not be the most beginner-friendly platform to use.

To start investing on the Binance platform, you will need to register for an account and select your country. If you are in the U.S., you will be required to register through Binance US.

Once your address is verified, you are ready to start trading on Binance.

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Binance account setup (Binance)

Investing on FTX

Founded by Sam Bankman-Fried and Gary Wang in 2019, FTX is the youngest crypto exchange on this list. The idea to launch the exchange came from Bankman-Fried’s frustration toward the shortcomings of other exchanges felt by his team at the quantitative trading firm Alameda Research. Since the launch of FTX, the platform has reached a valuation of $32 billion.

FTX has similar fees to its competitors. The platform charges fixed-rate fees for bank and wire deposits and additional trading fees, depending on the volume traded. The platform only offers the trading of around 50 cryptocurrencies internationally and around 25 in the U.S.

Depending on your jurisdiction, FTX also offers many different trading features, including leverage, options, an over-the counter (OTC) trading desk and a Solana non-fungible token (NFT) marketplace.

One advantage of FTX’s features compared with other platforms is its extensive portfolio tracking services, which was made possible through its acquisition of Blockfolio. It additionally offers both a desktop version and a mobile version of its marketplace.

FTX token (FTT) is the native token of the FTX platform, however, it is unavailable to users in the United States and some other jurisdictions where the token is prohibited. With FTT, holders can receive several benefits including:

  • Up to 60% discount on trading fees
  • Up to 0.02% OTC discounts
  • Staking rewards

To start investing on FTX, you can register based on your country of origin. Like Binance, U.S. users are required to register through its separate FTX US platform.

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FTX account setup (FTX)

Although there are many other options out there, these four exchanges can be a good first step for new users looking to start trading cryptocurrency. That being said, users must be aware that keeping funds on any centralized exchange can lead to a loss of funds in the event of a security breach or fraud. For maximum security, it’s advisable to keep a majority of your assets in a cold wallet and only keep a portion of funds on an exchange for trading.

This article was originally published on Mar 22, 2022 at 4:41 p.m. UTC

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Griffin McShane is a freelance writer for CoinDesk, currently living in Brooklyn, NY. Griffin has also written the Inside Crypto newsletter for Jason Calacanis' Inside.com and is a member of the International Association of Privacy Professionals (IAPP).

CoinDesk - Unknown

Griffin McShane is a freelance writer for CoinDesk, currently living in Brooklyn, NY. Griffin has also written the Inside Crypto newsletter for Jason Calacanis' Inside.com and is a member of the International Association of Privacy Professionals (IAPP).


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