Best Bitcoin Exchanges For Beginners
Through our extensive analysis and industry insights, we’ve created this handy beginners guide to Bitcoin and cryptocurrency exchanges. As well as listing the top trading platforms, we’ll tell you why finding the right exchange for your skill level is important.
The Best Bitcoin & Cryptocurrency Exchanges for Beginners
Regardless of where you are or what your skill level is, there’s a crypto exchange for you. The trick, however, is finding the right one. For example, exchanges in the UK are best for those who want to convert GBP to Bitcoin (BTC) Put simply, you need to establish what you want before you sign-up. To give you an insight into how the best cryptocurrency exchanges work, here are the answers to some important questions…
What Makes an Exchange Suitable for Beginners?
Simplicity is obviously crucial when it comes to finding the best Bitcoin exchange for beginners. Online trading involves complex charts, price indicators, and unfamiliar terminology; as such, you need to find a platform that keeps things as clear as possible. The beauty of many of the top sites is that you can choose to be as hands-on or hands-off as you like.
For example, as you’ll see from our Changelly review, you can be completely removed from the actual process of trading. Instead, you can input the number of tokens you want and simply pay the necessary price. By doing this, you don’t have to search through price charts, lists of tokens, or anything else in between.
Of course, if you want to get more involved, take a look at our Binance guide. This exchange is more like a traditional online trading platform in that it lists currency pairs and provides graphs and various automatic trading options. This is clearly more complex and something that beginners may struggle with. However, the reward for taking more control is slightly better pricing and the chance to react more quickly to price movements.
As a general guide, if you’re a complete novice, look for an exchange that doesn’t bombard you with statistical data and graphs. As long as you can see a list of buying options and their associated price, that’s about all you need.
How Do Exchanges Differ?
Every cryptocurrency exchange will differ in some way. However, if we’re going to categorise things, there are three main ways to buy Bitcoin (BTC) and other cryptocurrencies:
Crypto Only Exchanges: These are sites that only allow you to deposit, trade, and withdraw digital tokens. An example of this is Binance.
Fiat Crypto Exchanges: Check out our key facts on Kraken and you’ll see it’s an exchange that accepts USD, GBP, EUR, and other fiat currencies. Because of this, you can purchase BTC et al using credit/debit cards and bank transfers. What’s important to note here is that some fiat-to-crypto exchanges don’t allow you to withdraw funds back to your deposit method.
In other words, you can only buy coins using fiat. Once you’ve bought them, you’ll have to send them to a crypto wallet and withdraw them via an alternative method. This isn’t the case in all instances as Kraken does allow you to cash out in EUR.
Online Brokerage Platforms: The final way to invest in cryptos is via a traditional online trading site. These sites have a number of advantages for beginners. Firstly, they’re regulated by financial authorities because they also offer options on forex and other commodities. This makes them extremely secure.
Secondly, you can make deposits using a variety of methods. In fact, one of the best reasons to use a trading platform is that you can make PayPal deposits. The final difference with these platforms is the way you invest. Instead of buying the underlying asset (i.e., actually buying a digital token), you can purchase a contract for difference (CFD).
As we explain in our eToro review, CFDs are a virtual contract that allows you to speculate on the price going up or down. This is possible because you don’t own the underlying asset. Instead, you’re trading on the price movements.
How Do Exchanges Differ in their Functionality?
The difference in functionality between the leading online exchanges is information. As we’ve said, you can choose to access as much or as little data as you want. If you’re comfortable with candlestick charts, graphs, and pips, you can use an exchange that provides a large amount of data. If you’re a beginner, these things will only confuse you.
Beyond the data you can see or not see, the other difference in functionality between exchanges is payment methods. We now know that certain exchanges allow you to make PayPal deposits, while others won’t. Similarly, certain exchanges only allow you to deposit Bitcoins and some will charge fees while others won’t. Therefore, you need to select the site that works best for your circumstances and goals.
What are the Drawbacks of Using Advanced Exchanges as a Beginner?
If you choose an exchange that has too many features, the risk is that you’ll get lost in the mix and lose sight of your goal. By trying to take on too much information, you can easily get confused and not know whether an asset is worth investing in or not. As a beginner, keep things simple and find exchanges that provide a basic amount of data for you to analyse.
The Top Beginner Exchanges and Why You Should Use Them
Although the right exchange for you will depend on your preferences, here are some top picks to get you started:
- eToro: In terms of security, ease of use, and liquidity, eToro comes out top for beginners. Because it’s an online trading platform offering options on forex and other commodities, it’s regulated by the Financial Conduct Authority (FCA) and the Cyprus Securities Exchange Commission (CySEC). Additionally, because it’s been active since 2006, it has a larger infrastructure than most crypto exchanges. As well as PayPal deposits, you can use the social trading feature to mirror the trades of experts, meaning you don’t actually have to be highly experienced to start investing.
- Changelly: Perhaps the easiest way to buy BTC, Ethereum (ETH), and more, Changelly only requires you to input the number of coins you want to purchase. Put simply, Changelly is an intermediary between you and the exchanges, which means its software does all the hard work of finding the best prices and converting your funds.
- Luno: As per our Luno overview, this site is great for beginners because it’s regulated by the UK’s FCA. Although its transaction fees aren’t the lowest, this platform has a mobile app and 2FA protection, making it one of the most secure and accessible places to buy cryptocurrencies.
How Can I be Sure My Money Is Safe?
Investing is a risky business in the sense that you never know if a trade is going to show a profit. However, this is the only way it should be risky. When you join an exchange, it’s important to look for markers of quality. The best way to know your money is safe is to choose a platform that’s regulated by a financial authority. In the absence of that, look for longevity, liquidity, and customer reviews. Our cryptocurrency exchange reviews will help you distinguish the reputable brands from the not so good ones. Follow these tips and you shouldn’t have any issues when you start your cryptocurrency journey.