Pros and Cons of the Most Popular Crypto Exchanges
The world is home to roughly 600 active crypto exchanges, according to Forbes, but the results of a new study from GOBankingRates show that crypto traders prefer three exchanges above all the rest. Coinbase, Crypto.com and Robinhood received top billing from the study’s respondents.
Here’s a look at the pros and cons of each platform, as well as an introduction to a few other popular and respected exchanges that flew under the radar of the investors who participated in the study.
Coinbase has been the industry leader since its arrival in 2012 and is the largest crypto exchange in America to date. With more than 98 million verified users, Coinbase operates in more than 100 countries, employs more than 4,900 people and holds $256 billion in assets on its platform.
The sheer size of Coinbase lends credibility to the platform, as does the fact that it’s listed on the Nasdaq. When Coinbase became the first publicly traded crypto exchange in 2021, the moment validated the industry and helped bring cryptocurrency into the mainstream.
Its other pros include:
- A wide range of cryptocurrencies available for trading
- A sleek and intuitive interface
- Easy sign-up and onboarding
- The platform rewards users for learning.
- It’s an excellent platform for beginners.
The tradeoff for big-name credibility, fast and simple trades, and a platform that has its own wallet and crypto-rewards Visa card, according to Forbes, is a confusing fee structure that charges users more than many other exchanges.
Matt Damon is the first thing you see when you log onto Crypto.com, which could be either a pro or a con, depending on how you feel about the Oscar-winning-actor-turned-crypto-pitchman. One other thing that the exchange has working in its favor is momentum — with more than 50 million users trading more than 250 cryptocurrencies, it claims to be the fastest-growing crypto app in the world.
Here are some of the other pros of Crypto.com:
- Like Coinbase, it has its own rewards credit card — the Crypto.com Visa pays you up to 5% back on all spending.
- Deposits can earn up to 10% per annum on stablecoins and up to 14.5% on cryptocoins.
- Excellent speed, security and liquidity
The drawback is that low-volume traders get hit with higher fees, according to Forbes, and the only way to sidestep fees is to trade in Cronos, which is Crypto.com’s proprietary stablecoin.
Robinhood rode to fame as a pioneer in the commission-free investing space and is the primary reason that investing today can be done for free for pretty much anyone — and it’s following the same formula in the crypto space.
As Robinhood is quick to point out, some exchanges charge up to 4% to trade crypto on their platforms — Robinhood charges 0%. On Coinbase and Gemini, a $100 investment would buy you $97.01 in crypto — the other $2.99 disappears to the exchanges in the form of fees.
With Robinhood, a $100 investment leaves you with $100 worth of crypto.
Robinhood’s other pros include:
- A wide selection of the most popular cryptos
- You can get started for as little as $1.
- Sign-up is fast and simple — you’ll be trading in minutes.
- It’s working on developing its own wallet.
- Excellent security and cold storage
In terms of cons, Robinhood doesn’t have a lot of flaws — the most commonly cited drawbacks of the big exchanges, after all, are high fees, confusing fees or a combination of both. According to Time’s NextAdvisor, however, Robinhood has been criticized for making its interface too game-like, which might encourage active trading — and therefore volatility — over long-term growth.
Although the study’s respondents didn’t place it among the top three exchanges, Binance.US gets a mention because it is an offshoot of Binance, the global crypto juggernaut that holds the title of the world’s biggest crypto exchange by volume. Its $10.42 billion 24-hour trading volume leaves No. 2 and No. 3 FTX and Coinbase in the dust with $1.83 billion and $1.65 billion, respectively.
Binance.US doesn’t have as many coin options as its parent exchange, but it does offer a respectable 100-plus — and most importantly, it follows the Binance model of charging fees that are near the lowest in the industry. Set up is fast and security is strong, but it’s not available in all states, according to Forbes, including Texas and New York.
Kraken is the world’s No. 4 biggest exchange behind Binance, FTX and Coinbase, according to CoinMarketCap.
The platform offers more than 100 cryptocurrencies and has an easy sign-up process that lets you get up and trading in just a few minutes with as little as $10.
While it may not be the best platform for beginners — novices flock to Coinbase for a reason — experienced traders laud Kraken for its advanced features like margin and futures trading. Its fees are low and its security is world-class — the platform has never been hacked, according to Forbes. It doesn’t have a wallet, customer support is underwhelming and it’s not available in all states, but it does offer solid staking rewards.
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Methodology: GOBankingRates surveyed 1,037 Americans aged 18 and older from across the country between April 8 and April 9, 2022, asking eight different questions: (1) Do you invest in cryptocurrency?; (2) If you do not invest in crypto, why not? (Select all that apply); (3) How long have you invested in crypto?; (4) What is your main goal for your crypto investments?; (5) What percentage of your investments are in crypto?; (6) Which crypto(s) are you invested in? (Select all that apply); (7) How much have you profited from crypto (all-time)?; and (8) Which crypto exchange(s) do you use? (Select all that apply). GOBankingRates used PureSpectrum’s survey platform to conduct the poll.