10 Best Cryptocurrency Exchanges by Liquidity in 2022
Cryptocurrency exchanges live and die by the coins they offer and their level of liquidity. Without a burgeoning selection of digital tokens and enough people willing to buy and sell, it’s almost impossible to get maximum value when you trade. Put simply, only the exchanges with the most cryptocurrency coins and users are going to give you the best trading conditions possible.
What is Liquidity and Why is it Important?
In all forms of trading, liquidity is crucial. The term used to describe how active an exchange is, liquidity is important for two main reasons. Primarily, liquidity determines how fast you can execute trades. In other words, if there aren’t enough active traders on the platform, you won’t be able to buy or sell at speed. Therefore, the more activity there is, the less time it takes for your buy/sell order to be completed. Why does speed matter? Simple: Because prices are changing all the time, a delay can cause your order to complete at a worse price than you intended.
As well as ensuring trades are completed as quickly as possible, high liquidity also means an exchange is stable. If you check out our Coinbase review, you’ll see that it’s active in 32 countries. This means it has millions of users all buying and selling everything from Bitcoin (BTC) to Ethereum (ETH) 24/7. Thanks to its customer base, Coinbase has extremely high liquidity, which means there is virtually no delay when you want to buy Bitcoin or any other available token.
How Can You Determine an Exchange’s Liquidity?
If the world is connected, liquidity will be high. Source Semeniaka Aleksandr/Shutterstock
Getting exact numbers isn’t always easy. What’s more, a large number of members doesn’t always equate to high liquidity. Indeed, as we’ve said, activity is important. If an exchange has one million members but only 2% are active, the level of liquidity is still going to be fairly low. To help you find sites with the most cryptocurrency coins, our crypto exchange reviews should be your first port of call. Using a team of experts, we’ve tested each platform and given you an honest overview of everything they offer.
Another tip to finding the exchanges with the most digital coins and liquidity is demo accounts. As we’ve noted in our guide to eToro, you can register an account and trade for free using virtual credits. In general, this option is only available at crypto broker sites. However, it’s a useful way to get a feel for how active a platform is before you spend your money.
Finally, count the number of coins available. More coins don’t always equal high liquidity. However, if an exchange lists all the major altcoins (see below), it’s likely to be popular with traders and, therefore, have better liquidity.
The Best Altcoins to Trade
As we’ve said, exchanges with the most cryptocurrency coins often have the best liquidity. Again, that’s not always true, but more options open up more trading opportunities. Therefore, if you can choose exchanges with the best altcoins, you’re far more likely to get the best prices and efficient trading conditions.
When you’re scrolling through our list of recommended cryptocurrency exchanges, the following altcoins should be seen as markers of quality and liquidity alongside Bitcoin: