If you recognize the potential of the cryptocurrency industry and are planning to trade or invest in it, the abundance of exchange platforms that are accessible for the same could be rather overwhelming. Making the right exchange selection is a crucial but usually underestimated aspect of becoming a successful trader or investor. Although the products, features, and fees of each exchange are just marginally different, over time, this can have a significant impact on your trading strategy.
We have reviewed a number of the top cryptocurrency exchanges on the market and ranked them based on the most important factors to make the process of picking the ideal exchange easier. This guide extensively explains the evaluation and rating process.
Our final rating that is given to any exchange is a weighted average of the individual ratings that the exchange receives in 6 different categories:
- Mobile App
- Trading Platform Features
- Customer Support
- Payment Methods
The final score we assign to any exchange platform is the weighted average of the individual scores it obtains in the following six categories:
In order to develop a metric by which we could score the exchanges in each of the stated areas, we first gathered data for each of the categories from a range of exchanges and compared them.
Each category is given a score between 0 and 10, with 0 and 10 representing the lowest and the highest possible rating for the exchange, respectively. Each factor is described in depth below.
Anonymous Live Accounts
While testing out the exchange platforms, we use live accounts made by the reviewers for data collection and analysis. To maintain the highest level of authenticity and to provide the reviewers the freedom to use the platform as customers would, the brokers are kept completely unaware of the creation of such accounts.
One of the most important factors for each trader to consider before selecting the best platform is the fees they pay for trading on an exchange. Even a modest difference in fees can add up and become a significant concern for regular traders who make several trades each day, even while it only has a minor impact on long-term investors.
For the purposes of our rating process, a platform’s fees account for 17% of the exchange’s overall rating. Here are three types of fees taken into consideration while rating each exchange’s fees on a scale from 0 to 10:
- Trading fees
- Deposit fees
- Withdrawal fees
Crypto exchange platforms may charge trading fees in the form of commissions or spreads; however, the majority of exchanges prefer to charge a combination of the two, with volume discounts.
While evaluating their trading fees, we examined platforms’ basic trading fees charged for a standard trading volume based on the average number of transactions a regular trader would execute over a 30-day period. This includes trading costs for many product classes, including the spot market, futures, and derivatives.
In addition, we examined whether the exchange featured a maker-taker structure, where trades that add liquidity to the market face lower fees than trades that drain liquidity.
Furthermore, we examined the deposit fees involved in the exchange. This appeared in two forms:
- The fees charged by the crypto exchange for deposits of fiat currency done via credit/debit cards, bank transfers, and electronic wallets like PayPal and Skrill.
- The fees charged by the crypto exchange for crypto deposits made from an external wallet.
Additionally, crypto exchanges might charge fees for withdrawing assets from the platform. Similar to how we looked at the company’s deposit fees, we analyzed both the fiat and cryptocurrency withdrawal fees linked with the platform.
Given the increased frequency of trading and the inherent volatility of the cryptocurrency markets, we also investigated whether or not crypto exchanges had mobile applications that users could use to make trades without a hustle. This category accounted for 16% of our total rating and included the following elements:
- App availability
- Customer rating
- Update frequency
- Data privacy
The initial consideration was whether or not the exchange offered a downloadable app. We assessed whether this app was compatible with both Android and iOS devices, awarding a higher rating to exchanges that have apps that were compatible with both operating systems.
After determining that the exchange had an app, the next step was to evaluate the app’s quality, and the most reliable strategy for doing so was to evaluate user reviews. Android applications were evaluated based on their average rating on Google Play, and iOS applications were evaluated based on their App Store ratings.
When a mobile app is released, it must be frequently updated to ensure that any bugs or performance issues may be resolved easily. Therefore, the frequency of updates becomes a critical determinant when evaluating the quality of an app.
Therefore, we evaluated the update frequency of the apps, and those with more frequent updates obtained a higher rating than those with fewer updates.
Privacy, a big concern when it comes to mobile apps, is also included in this metric when assigning rankings to the platform’s mobile app.
In this regard, the most important factor was whether the mobile app tracked the user’s data in order to show targeted adverts; apps that did so were rated worse than those that protected customer privacy more.
Finally, we examined the compatibility of the apps across several devices; for instance, an iOS app may be downloaded on an iPad, iPhone, or Apple Watch. Similar comparisons may be made with Android applications.
Therefore, apps that were compatible with a wider variety of devices received a higher grade than apps functional with fewer devices.
Trading Platform Features
This was one of the most in-depth portions of the evaluation process, in which we examined a variety of trading platform-specific factors. The primary parameters for the trading platform that we evaluated were:
- Markets Supported
- Cryptocurrencies Available
- OTC Trading
- Order Types
The range of markets supported by the exchange was the first element we evaluated. For instance, spot-only exchanges received a lower grade than those that simultaneously provided access to crypto derivatives and futures. Exchanges with even more innovative marketplaces, such as leveraged tokens, were given a higher ranking.
Moreover, exchanges that provided access to non-crypto markets, like forex, equity, and commodity markets, were also kept in mind while rating.
The range of cryptocurrencies offered on the site was the second factor that we took into account, and it was by far the most important.
It should be obvious that exchanges with more cryptocurrencies available for trading on the platform were given a higher score than those with fewer cryptocurrencies.
Liquidity becomes a concern while trading since if you trade on an exchange with very little liquidity, you might encounter issues like:
- Having trouble selling your assets when you want to because there aren’t enough buyers
- Being forced to pay high prices because of a lack of orders in the Order Book.
So, by examining the average daily trading volume on the exchange, we were able to evaluate the liquidity related to other exchanges. Scores were higher for exchanges with more trading volumes than for exchanges with less activity.
The availability of over-the-counter (OTC) desks for larger transactions was another factor we considered while judging a trading exchange. The following were the key factors to keep in mind:
- Whether the exchange platform offered OTC trading
- What the OTC trading desk’s minimum order limit was
- OTC pricing’s degree of competitiveness in relation to other exchange platforms
- Whether an OTC-focused support representative was offered
When evaluating a platform’s features, we also factored in its security measures, and some of the key factors we took into account were as follows:
- Whether two-factor authentication was available on exchange for major account changes and withdrawals
- Whether the exchange was insured
- What percentage of the exchange’s assets were kept in cold storage
- The exchange’s background with breaches and hacks
- If the exchange had a comprehensive compliance system in place to detect and stop fraudulent practices
The number of order types provided by the exchange also made up a significant category that we took into account because this directly affects whether or not the exchange is appropriate for advanced investors. Exchanges were rated according to whether or not they supported various order types, including:
- Market order
- Limit order
- Stop order
- Limit-stop order
Investors and traders are increasingly looking for exchanges that are more secure by means of being authorized by regulatory authorities around the world since the number of scams and frauds in the cryptocurrency industry is increasing. As a result, this contributed to our ranking system and accounted for 17% of the exchange’s overall score.
For instance, whether the exchange is even regulated was the fundamental factor in this case. Exchanges that were subject to regulation obtained a higher score than unregulated ones. Moreover, the platforms that were recognized by several regulatory bodies around the world witnessed an advantage while rating.
Customer support plays a significant role in the rating process as well, making approximately 17% of the overall rating for finding the most suitable exchange platform. There are four factors to take into account in this regard:
- Live Chat Service
- Email Support
- Call Support
- FAQ Sections
Live Chat Service
Whether or not a platform had a live chat feature was the first thing we checked. For those that did, evaluating how useful this service was in addressing user queries came next.
Any platform’s live chat service serves as the first line of defense and should be capable of handling even the most basic consumer concerns. Platforms that offered live chat around-the-clock received higher ratings in this category.
As email support is typically one of the most important factors in determining how successful customer service is, it played a significant role in our evaluation process.
Here, we focused on two aspects:
- The swiftness of the responses, as measured by the typical turnaround times for email queries.
- The effectiveness of the solutions, as in, did the responses offer precise solutions to the issues.
The majority of exchanges do not provide call support, and those that do only offer so for a fixed limited time during the day. This can be problematic given that the cryptocurrency market trades 24X7; thus, the major factor, in this case, was whether or not the exchange provided a call support helpline available 24/7 to handle consumer issues.
Other factors taken into account, in this case, were the waiting times for speaking with a representative and how effective the solutions and responses were.
Finally, to help with the support process, we checked the website to see if it had a FAQ page that addressed frequently asked questions. Exchanges with a FAQ page received higher ratings than those without one.
We took a look at the following elements for the exchanges that did have an FAQ page:
- The extensiveness of their FAQ pages
- Their FAQ section update frequency to include the latest common questions
- How simple it was to navigate around
Crypto exchanges are usually accessible to investors around the world and are not typically restricted to a single nation or domicile. Thus, it becomes really crucial that they accept a wide range of payment options so that users can simply add and withdraw money from the exchange. We examined some of the most popular payment methods and rated them according to whether or not the exchange accepted them.
In this regard, the payment options we looked at were:
- Wire transfers or bank transfers
- Payments with Credit or Debit Cards
- Transfers from a cryptocurrency wallet
- Transfers using electronic wallets like PayPal, Skrill, and Neteller International International Wire Transfers
The number of fiat currencies that the platform offered for deposits and withdrawals was also taken into consideration while ranking the exchanges. Stating obvious, exchanges supporting more fiat currencies scored higher ratings.