Beginner's Guides Choose Bitcoin Exchange

Beginner’s Guide to Choose Bitcoin Exchange

Beginner's Guide, Bitcoin

The first step to buy bitcoin is to choose the bitcoin exchange that will convert your traditional currency into bitcoin.  There are dozens of  bitcoin exchanges.  We summarize the pros and cons of the best exchange options for new bitcoin investors.  We also compare all the features and fees of bitcoin exchanges in one convenient chart.  Choosing a bitcoin exchange involves trade-offs between usability, features, and cost.  Each bitcoin exchange will strike a different balance.  The questions to ask before you choose a bitcoin exchange are:

  • How easy does the bitcoin exchange make it to buy bitcoin?
  • What are the fees for trading, deposits, and withdrawals?
  • Do I want to buy bitcoin with a bank account transfer (cheaper) or a credit/debit card (more expensive)?
  • How does the bitcoin exchange protect or insure my U.S. dollar and bitcoin deposit accounts?
  • Do I want to use or learn some advanced features?

Each new bitcoin investor will look for different things in a bitcoin exchange.  After reading this guide, check out our step-by-step guides buying bitcoin on Coinbase, Gemini, and Bitstamp.

Coinbase
Summary
Coinbase is the absolute easiest and no-hassle way to invest U.S. dollars into bitcoin.  It is the industry-leader for new bitcoin investors and is well-funded, regulated, and insured.   It offers a familiar bank-like interface. For debit card purchases, Coinbase offers one of the lowest fees around.  Coinbase no longer supports credit card purchases for its new U.S. customers.
Pros
  • Easiest way to purchase bitcoin
  • No complicated exchange charts
  • Debit card purchases with 4% fee
  • Emphasis on compliance with U.S. laws and regulations
  • FDIC insurance for U.S. dollar balances
  • Insured against security breach of the exchange
Cons
  • Extremely high transaction fees (except for debit card fees)
  • Extremely high withdrawal fees
  • No advanced features
  • No full-scale trading interface
  • No preset options for debit card purchase amounts
  • Slow to react to new bitcoin developments because risk averse

 

Gemini
Summary
Gemini was our favorite overall exchange until it raised trading fees from 0.25% to 1.00%.  It is still cheaper to use than Coinbase and great for new bitcoin investors who want lower costs and some additional features, but without the complication of a full-scale exchange interface.  Gemini’s user interface is clean, zippy, and simple to use. We love the free withdrawals and instant access to funds from ACH transfers.  Gemini also prides itself on security and compliance with U.S. laws and regulations.
Pros
  • Easy to use trading interface with some advanced options
  • No limit on withdrawals of bitcoin
  • No limit on withdrawals of USD via wire transfer
  • Free withdrawals of bitcoin and USD
  • Immediately purchase after ACH transfer
  • FDIC insurance for U.S. dollar balances
  • Insured against security breach of the exchange
Cons
  • Low daily deposit limit ($500) for ACH transfers
  • No credit/debit card purchases
  • More complicated than Coinbase
  • Not as many advanced options as GDAX
  • No full-scale trading interface
  • Only one other cryptocurrency (Ethereum) traded
  • Slow to add other cryptocurrencies

 

GDAX
Summary
GDAX, a companion site to Coinbase, is our choice for new bitcoin investors. You cannot beat trading fees of 0% – 0.25% and free withdrawals and deposits. It offers a more traditional currency exchange experience and trading chart, but it is not difficult to learn.  GDAX’s trading screen includes a price chart with technical analysis tools, order book, trading history, and summary of open orders.  Users can set market, limit, and stop orders.
Pros
  • Beautiful modern trading interface
  • Market order fee is just 0.25%
  • No fees on non-market orders, i.e., no “maker” fees
  • Free USD and bitcoin withdrawals
  • FDIC insurance for U.S. dollar balances
  • Insured against security breach of the exchange
Cons
  • Complicated for bitcoin investors with no trading experience
  • Takes time to learn how to use
  • No simple one-click method to purchase bitcoin
  • Wait time for ACH transfers to clear before trading
  • Withdrawal limit of $10,000.00/day
  • Not available to residents of Wyoming, Hawaii, and Minnesota

 

Bitstamp
Summary
Bitstamp’s instant order feature for one-click bitcoin purchases via credit/debit card is even easier to use than Coinbase.  Bitstamp’s EUR support makes it an awesome exchange for Europeans  or any person who wants to an easy way to purchase bitcoin along with a full-scale trading interface on the side.  Bitstamp has free withdrawals and we appreciate it that Bitstamp does not store your credit card information in your account settings.
Pros
  • Instant order feature is easier to use than Coinbase
  • Both credit and debit card purchases
  • No storage of credit/debit card details
  • Free bitcoin withdrawals
  • Avoids complicated currency exchange charts
  • Makes advanced features available on separate chart
Cons
  • Slightly higher fees on credit/debit card purchases
  • Withdrawal and deposit fees on USD for U.S. residents
  • No ACH transfers
  • No FDIC Insurance
  • No security breach insurance
  • Trading chart ran slow for us

 

CoinMama
Summary
Coinmama is an excellent service because it is focused on doing one thing extremely well — purchasing bitcoin with a credit/debit card.   As a result, Coinmama has the cleanest and most simple front page interface to convert U.S. dollars into bitcoin.  If you plan to immediately withdraw your bitcoin from the exchange to your own bitcoin wallet, Coinmama is a great choice because it automates that process.
Pros
  • Credit/debit card purchases
  • Simple user interface right
  • No complicated exchange charts
  • Hold your own bitcoin
Cons
  • High fees for credit/debit card purchaes
  • Available to residents of just 25 states in U.S.
  • Must have your own bitcoin wallet set up in advance
  • No options to purchase bitcoin with bank account transfer

 

Summary Chart

We have compared all the details of bitcoin exchanges in one simple chart.  What exchange has the lowest fees? What exchange offers FDIC insurance for your traditional currency and private insurance against a security breach? How many cryptocurrencies does each exchange support? Find out the answers to these questions and more.  Note that,  although some of the exchanges may vary trading fees based on your trade volume and order type, we assume the trading volume of a new bitcoin investor is not high enough to receive fee discounts and we assume that you only place market orders.

Exchange Account Deposit (ACH) Account Deposit (Wire) Purchase via USD Account Purchase via Bank Transfer Purchase via Card Sell Bitcoin Account Withdrawal (ACH) Account Withdrawal (Wire) Account Withdrawal (Paypal) Withdraw Bitcoin Supported Crypto Currencies FDIC Insured for USD Security Breach Insurance Bitcoin Storage
0 10.00 0.0149 0.0149 0.0399 0.0149 0.0149 0.0399 Network Fee 4 98 Percent Offline Storage
0 0 0.01 0.01 0 0.00 0.00 2 Majority Cold/Cryo Storage
0 10.00 0.0025 0.0025 0 25.00 0.00 4 Majority Cold Storage
0.0005 0.0025 0.05 0.0025 0.0009 0.00 4 98 Percent Cold Storage
0.055 Automatic 2