Centralized crypto exchanges (CEX) are the most common gateway for users into the crypto world. The information website CoinMarketCap lists well over 200 such platforms. Their ranking is based on a score that takes into account factors such as page access, liquidity and trading volume. TECHBOOK gives an overview of the most interesting crypto exchanges.
Which is the best crypto exchange? This frequently asked question is not that easy to answer. Because it depends on a few factors, such as what the user’s focus is. The crypto purchase itself is possible almost anywhere using a SEPA transfer or credit card. So what is crucial? Is it about the size of the selection or the quality of the coins and tokens? Should you just buy and hold or should you trade? Depending on your focus, the answer may be different. TECHBOOK lists relevant portals as well as their advantages and disadvantages.
Be careful when using Binance
Let’s look at a few interesting candidates. Binance is by far the leading exchange in the world. Its founder and CEO is Chinese-born Canadian Changpeng Zhao, known as CZ. He is considered by many to be the most influential person in the global crypto industry.
Binance has over 150 million users in over 180 countries around the world, and the daily trading volume is in the billions. Almost 400 cryptocurrencies can be traded on this digital exchange. The app’s infrastructure is excellently developed. The low fees for trading and the fast support in the event of any problems are particularly impressive. However, the content is only available in English and due to a lack of licenses, not all functions are available in Germany.
Another negative factor is that Binance has not received a BaFin license for the German market and therefore apparently does not currently meet the high standards associated with it. This is a clear disadvantage compared to competitors who have received such a license. Consumer advocates therefore advise against Binance.
Also read: PayPal launches its own cryptocurrency “PYUSD” for the first time
Security is the priority: recommended crypto exchanges
Users expect high reliability and security when they use an exchange, especially since the crash of the major crypto exchange FTX in November 2022. This is especially true when it’s not just about buying cryptocurrencies. Whenever the acquired cryptocurrencies are to remain on the exchange to be managed centrally, trust is required in the still young crypto finance sector. So which is the safest crypto exchange?
Coinbase
The US stock exchange Coinbase is one of the market participants that can at least hold a license from the Federal Financial Supervisory Authority (BaFin). It is also considered the exchange with the highest standards when it comes to adding new cryptocurrencies to its offering. Coinbase often takes a lot of time to carefully examine projects before they are finally listed for investors. That’s why the selection of cryptocurrencies is only about half as large as at Binance. However, Coinbase offers a savings plan for German customers and also impresses with the crypto app’s easy-to-understand and intuitive user interface.
Bitpanda
Something similar can be said about Bitpanda, a crypto exchange based in Austria that has also received a BaFin license. Bitpanda is now cooperating with the German neobank N26 to conduct crypto trading together. What is particularly striking about Bitpanda is that, in addition to the range of classic cryptocurrencies, there is a clear focus on tokenized stocks and raw materials. Many experts believe that, for example, the depiction of real trading goods on the blockchain as tokens will experience an initial boom in the next bull market. So Bitpanda may be ahead of its time. Whether that is really the case remains to be seen.
bison
Finally, the German crypto exchange Bison also belongs to the select group of BaFin-licensed platforms. Bison cooperates with the custodian blocknox, the Solaris Bank and the Stuttgart Stock Exchange. The disadvantage of the platform is the very small number of cryptocurrencies available. Fee-free trading must be considered an unconditional advantage. However, Stiftung Warentest points out in a report that the “considerable spread”, i.e. the difference between the purchase price and the sales price, causes significant costs.
Overall, the offer is worth a closer look simply because in terms of security, the deposit insurance of one hundred thousand euros can be considered a real pound in the global crypto industry.
But security has several aspects. It’s not just about licenses. The question of how well an exchange is secured against hackers also plays a role. Although damage caused by hacks is usually compensated by the exchanges, there is no guarantee in many cases. In this respect, the storage of coins and tokens also plays a role in assessing their security.
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Crypto exchanges with cold wallets provide more security
Some of the aforementioned and other central crypto exchanges are trying to achieve more protection against hackers by using or partially using cold wallets. The crypto assets are stored separately from the Internet in order to make criminal access by hackers much more difficult.
Gate
Gate is one of the platforms that has this security feature. This type of protection can be particularly important if not only cryptocurrencies but also NFTs are purchased via central crypto exchanges. Because a unique item, and NFTs always are for fundamental reasons, cannot be replaced equally.
Gate is also one of the exchanges with the largest selection of cryptocurrencies. Almost 2000 different cryptocurrencies can not only be bought here, but also traded. Anyone who is interested in getting into a new cryptocurrency as early as possible in order to take advantage of the first big price increase as a profit cannot avoid exchanges with a large range of brand new currencies.
What is convincing about Gate – in addition to a lively launch platform for new crypto projects – is also the particularly clearly designed copy trading function.
Copying the purchases and sales of particularly successful traders is a feature that is becoming increasingly popular. Instead of coming up with your own trading strategy and spending hours analyzing, you simply copy other people’s crypto trades. This is even fully automated. In return, you pay the so-called lead trader whom you copy a share of the profits.
Also read: Hardware wallet – digital wallet for cryptocurrencies
Rules for German customers
In addition to the fact that German customers are generally only allowed to do spot trading on crypto exchanges, meaning they are not allowed to trade with futures, there is another thing that needs to be paid particular attention to: every trade must be documented, as in Germany every single one is Tax must be paid on profits. This leads to a bureaucratic process that seems absurd, but which is actually intended by the legislature. Therefore, some argue that Germany is not a country for traders, but for “holders”. For holders of cryptocurrencies who do not trade, the law offers a globally unique luxury: the tax exemption of any profits after a holding period of at least one year.
In Austria and Switzerland, for example, the legal situation is completely different. That’s why it’s important for everyone to be clear about their personal preferences and legal framework before choosing a crypto exchange. Just in case, you can of course register with several exchanges and simply try out what works best for you.