Cryptocurrency trading traces its roots back to the creation of Bitcoin, the first-ever decentralized digital currency, in 2009 by an individual or group using the pseudonym Satoshi Nakamoto. Bitcoin was designed as an alternative to traditional fiat currencies, aiming to provide a secure, peer-to-peer method of transferring value without the need for intermediaries like banks or payment processors.
The early days of Bitcoin trading were marked by obscurity and skepticism. Few believed in the potential of this digital currency, and its primary use case was limited to a niche group of technology enthusiasts and cryptography experts. Bitcoin’s value was negligible, and it was primarily used for experimentation rather than serious financial transactions.
However, as Bitcoin gained traction and its underlying blockchain technology proved to be robust and secure, it caught the attention of a broader audience. This newfound interest led to the emergence of cryptocurrency exchanges, platforms where users could buy, sell, and trade various cryptocurrencies.
The First Cryptocurrency Exchanges
The first cryptocurrency exchange, BitcoinMarket.com, was established in 2010. It allowed users to trade Bitcoin for traditional fiat currencies like the U.S. Dollar. This marked the beginning of a new era in finance, as cryptocurrency trading platforms started to proliferate.
Mt. Gox, founded in 2010, became one of the most prominent early exchanges. Based in Tokyo, Japan, Mt. Gox quickly became the dominant platform for Bitcoin trading. However, it also became synonymous with security breaches, experiencing multiple hacks that resulted in the loss of significant amounts of Bitcoin. These events highlighted the need for robust security measures within the cryptocurrency ecosystem. Despite the setbacks, the cryptocurrency market continued to expand. New cryptocurrencies, often referred to as “altcoins,” emerged, each with its unique features and use cases. Litecoin, created by Charlie Lee in 2011, was among the first altcoins, offering faster transaction confirmation times than Bitcoin.
The Rise of Altcoins and Diversification
As the cryptocurrency market grew, traders and investors began diversifying their portfolios beyond Bitcoin. Altcoins like Ethereum, Ripple (XRP), and Litecoin gained popularity. Ethereum, in particular, introduced the concept of smart contracts, enabling the creation of decentralized applications (DApps) on its blockchain.
The introduction of these diverse digital assets expanded the trading landscape, giving rise to a multitude of trading pairs on cryptocurrency exchanges. Trading pairs represent the combinations of cryptocurrencies that can be exchanged for one another, such as Bitcoin for Ethereum (BTC/ETH) or Bitcoin for Dogecoin (BTC/DOGE).
Decentralized Exchanges (DEXs)
While centralized exchanges like Mt. Gox and BitcoinMarket.com dominated the early cryptocurrency trading scene, decentralized exchanges (DEXs) began to gain traction. DEXs operate without intermediaries, allowing users to trade directly with one another using blockchain technology and smart contracts.
One notable DEX is Bisq, which gained recognition as the best platform for decentralized exchange. Bisq’s open-source software can be downloaded and used by individuals worldwide, further promoting the ideals of decentralization and financial autonomy.
The world of cryptocurrency trading has been a rollercoaster ride since its inception in 2009, a fact not lost on anyone remotely tuned in to current events. It has weathered its fair share of scandals, hacking incidents, and the tumultuous fluctuations of bull and bear markets. The most recent market downturn alone wiped trillions of dollars from the crypto landscape.
Yet, despite the turbulence, crypto trading soldiers on, attracting investors who see it as an opportunity to buy low and sell high. And where there’s trading, there are exchanges. Here, we take a closer look at some of the leading platforms and exchanges that have made their mark in this thrilling arena.
Top 18 Best Crypto Exchanges In Existence
These crypto trading platforms and exchanges have intriguing backgrounds. Some originate from traditional brokerage firms that have ventured into the digital asset space, while others were purpose-built for crypto trading. Some have been founded by tech luminaries, and a few have harnessed the power of celebrity endorsements to boost their market presence. Given cryptocurrency’s knack for making headlines, it’s worth getting acquainted with these platforms.
Binance US, the American arm of the global crypto giant, offers fee-free trading for specific currency pairs. It caters to both individual and institutional clients and provides tutorials on various crypto topics. This Palo Alto-based platform was established in 2019.
Bisq stands out as a decentralized exchange platform, allowing peer-to-peer trading with no intermediaries. It operates as open-source software and is compatible with Mac and Windows.
Founded in Hong Kong in 2012, Bitfinex gained notoriety in 2022 when a New York couple allegedly hacked the site for a staggering $8 billion. The company has since fortified its security measures and offers trading for multiple cryptocurrencies and fiat currencies.
BitMart facilitates spot and futures trading for numerous cryptocurrencies and trading pairs. It’s a platform for both individual and institutional investors, offering cashback incentives and crypto savings.
Founded in 2011 and based in Luxembourg, Bitstamp provides easy, fast, and secure trading for several cryptocurrencies. Users can earn rewards through the Bitstamp Earn feature by staking assets.
This traditional brokerage enables investing in cryptocurrency through “cryptocurrency coin trusts” like Grayscale Bitcoin Trust. Schwab purchased TDAmeritrade in 2019, offering similar investment opportunities.
Coinbase serves both individual and institutional investors, offering features like wallet storage, credit card-based crypto rewards, derivatives trading, and Bitcoin-backed borrowing. The platform lists trading prices for over 10,000 crypto assets.
CoinFlip operates a vast network of crypto ATMs across 47 U.S. states, allowing users to buy and sell cryptocurrencies with cash for as little as $10.
Crypto.com offers a comprehensive ecosystem that includes trading, NFTs, cash-back credit cards, a Pay function for crypto transactions, and automated trading bots. Founded in 2016, it has attracted attention with celebrity endorsements, including Matt Damon.
eToro facilitates trading for 78 different currencies, emphasizing low fees, ready-made portfolios, social trading, and a user-friendly platform. In 2022, the company underwent layoffs following a canceled SPAC merger.
This global trading platform allows trading of Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. Users can fund their accounts with 25 currencies and access 150 global markets. Interactive Brokers began offering cryptocurrency trading in 2021.
Based in San Francisco, Kraken supports spot and futures trading for over 40 digital assets, including Bitcoin and Ethereum. It offers professional charting tools and concierge services for large traders.
Poloniex facilitates trading for 350+ currencies, including Bitcoin, tokens, and stablecoins like USDD and USDJ. It recently announced a partnership with Tron, expanding its offerings.
Robinhood provides access to popular cryptocurrencies like Bitcoin, Ethereum, and Dogecoin, with a low entry point of just $1. However, it faced scrutiny in 2021 for restricting trading of certain stocks.
TradeStation’s TSCrypto offers a range of trading tools, commission-free trades for some currencies, and supports five different cryptocurrencies as of July 2022.