Alex Morris

ConsenSys and Bitmain Pour Money Into New Crypto Exchange That Rivals Bakkt

New exchange is expected to be a boon for bringing institutional investors onboard. That’s what attracts these fintech behemoths
ConsenSys and Bitmain Pour Money Into New Crypto Exchange That Rivals Bakkt
Contents

ErisX, a recently launched cryptocurrency exchange, has successfully finished its Series B funding round, raking in $27.5 mln, Reuters reported this Tuesday. ConsenSys and Bitmain are only some of the big-name investors who contributed to this sum.

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A major investment round

A brand-new cryptocurrency exchange has caught many behemoths in the fintech sphere. Nasdaq and Fidelity are not the only major players that participated in the Series B funding round. Crypto unicorns like Pantera Capital, the biggest crypto hedge fund, and ConsenSys, a major Blockchain firm spearheaded by Ethereum cofounder Joseph Lubin, invested top-dollar in the exchange. Earlier, it was revealed that Nebraska-based brokerage firm TD Ameritrade also backed ErisX.

The exchange is particularly remarkable because it allows trading Bitcoin futures along with other cryptocurrencies in the likes of Bitcoin (BTC), Bitcoin Cash (BCH) and Litecoin (LTC). It is also expected that Ethereum and Litecoin futures will also be on the table after the company is granted by the CFTC.

In the company’s press release, CEO Thomas Chippas states that the money raised during the funding round will be used for further development of the platform. Moreover, they also plan to go on a hiring spree.

Tapping the appetite of institutional investors

Bitcoin adoption is still hitting a snag, and the current bear market is one of the reasons why crypto fails to go mainstream. However, attacking institutional players could be a game-changer, and exchanges in the likes of ErisX and Bakkt want to seize that opportunity. Crypto evangelists bet big on 2019 (Bakkt is eventually launching its Bitcoin futures on Jan. 24, 2019 after recently announcing their postponement).

ErisX is reportedly launching its spot contracts in Q2 2019. Meanwhile, their cryptocurrency futures products will go live in Q3 or Q4.

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Eric Eissler

Coinbase Customer Service: How to Burn Your Customers

Customer is king, but not in crypto, exchanges still lack strong customer support
Coinbase Customer Service: How to Burn Your Customers
Contents

After more than three weeks, I was finally able to get my missing transfer from Coinbase taken care of. It was a simple fix but it took more than three weeks, constant follow up, opening a case with the Better Business Bureau (BBB), and having a Coinbase “specialist” get involved. All I needed was a trace number so my bank could find the in-limbo funds. Was it really necessary to go through all of that just to get a trace number that could have been provided in the first request for support? I don’t think so.

Thinking about service

It seems the customer-is-king notion is falling by the wayside as tech companies grow larger and larger and feel that if they burn a few customers, that is not going to affect the bottom line. While that may be true to some extent, I hate to admit that, these companies are operating in the wild west of crypto are ultimately deciding the future rules and regulations to come down, based on their actions and the actions of their customers.

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Cold, robot-like emails

Coinbase does have a phone line for support but that is reserved for compromised accounts, so you have to endure scripted-response emails from a no-name support person (robot?), who is most likely working remote without easy access to supervisors. While I was dealing with my issue, here is an example of the emails I had to ensure:

Hi, Eric.

Thank you for contacting Coinbase Support.

I apologize for the inconvenience this has caused.

For sells or withdrawals, we initiate the transfer of funds from our bank to yours and the process takes 3–5 business days but may take up no later than 10 business days from the time that you have initiated the withdrawal.

We would love to process your funds faster, but we are dependent on the speed of our traditional financial system, which is an external bank process that Coinbase doesn’t have control with. We’re always researching new ways to make transfers faster while still maintaining safety (both yours and ours), security and convenience.

Thank you for bearing with us.

Regards,

Coinbase Support

I got that email or a similarly worded one about four times.

It was only after I opened a claim with BBB and then threatened to open up a complaint with the Consumer Financial Protection Bureau (CFPB), was a specialist finally involved.

Hi, Eric.

I sincerely apologize for the delay getting back to you on this case.

Having investigated the issue, I am working with a specialist to address it properly.

We will follow-up with you as soon as we have an update.

Thank you for your patience, and for choosing Coinbase!

Regards,

Coinbase Support

I then waited three days and had to email them again to get the following email that finally resolved the problem:

Hi there,

Your withdrawal has completed on our end. Below is the trace number for your funds.

Please [contact] your bank’s customer support line and explain that you have funds missing and give them the trace number. They should be able to locate your funds and forward them to your personal account.

They must have been really annoyed with me because they did not use my name in the salutation, nor did they sign off with the customer support signature.

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CFPB is full of complaints and so is BBB

The CFPB is, according to Reddit, much better at getting Coinbase to take action to resolve issues. Here is a list of the more than 2,600 complaints filed against Coinbase, for which many are for funds not received or missing funds.

Checking out the BBB, they have given Coinbase an F rating with more than 1,500 complaints against the company. Coinbase also has more than 450 open complaints that have not even responded to.

While Coinbase did go through growing pains over the past year as their customer base expanded by some three mln, the CEO Brian Armstrong, pledged to grow customer support. While they hired more support specialists to tackle the growing mountain of customer issues, using email as a medium of support without any personalization does not do the customer any justice. A good, old-fashioned phone call can clear problems faster than emails in many complex cases.

Alternatives exist but also suffer from poor customer support

After becoming so irate with Coinbase, it was only natural that I sought out alternatives. I opened an account with Gemini, founded by the Winklevoss twins in 2015, and have so far been pleased with its service.

Compared to Coinbase’s 10 million users, Gemini does not have its user base readily available. I did look into the reviews on BBB and found that Gemini also has an F rating from the BBB as they never responded to any of the complaints, only 15, filed against them. It appears that in mid to late 2017, when the exchange was just getting started, they were suffering from frozen funds and misplaced money. I was unable to find any recent complaints.

Gemini, too, only has support via email, to its detriment.

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Suggestions for a better customer experience  

When it comes to handling other people’s money it is best to do so in a quick effective manner. If there is any question in the mind of the customer about where their money is, it is best to address it quickly and with full details about the situation.

If a customer is missing a deposit and sends a request for help, a proper response would include the following:

  • We are sorry for the inconvenience this is causing you

  • here is what we know so far, here is what we are working on for you

  • here are codes and numbers that may assist in this matter

  • my name is X and I will be assisting you on this matter

  • here is a case number

  • here is a phone number for expedited/personalized support

These are small and rather easy things to implement in the customer support process. I know if I got an email with the above in response to my issue, I would be able to feel secure that someone is diligently working to resolve this issues and if need to reach out to someone for more help, a dedicated person is there to help.

It’s a little that can go a long way in improving customer satisfaction.

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Alex Morris

Binance Exchange Review: Taking a Closer Look at the Crypto Behemoth

In this Binance review, we’ve analyzed all of Binance’s features to find out whether multibillion-dollar Binance Exchange is better than any alternative exchange
Binance Exchange Review: Taking a Closer Look at the Crypto Behemoth
Contents

Binance — From an ICO to the world’s biggest exchange

While the majority of Chinese exchanges have failed to reach a global audience, there is one very prominent exception: Binance, the largest exchange in the world by trading volume.  

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Changpeng Zhao (better known as CZ) is the mastermind behind this Chinese exchange. It is worth mentioning that he already had certain trading experience before founding Binance — he started his already impressive career by building trade engines at the Tokyo Stock Exchange. After CZ found out about the existence of Bitcoin in 2013, he started working for a slew of crypto-oriented projects, including Binance’s present-day rival OKCoin, but then he eventually decided to start his own crypto-only exchange.   

In order to raise funds for the new Binance exchange that was supposed to become a leader in the crypto-to-crypto niche, CZ conducted a fairly successful ICO, raking in $15 mln. Investors were rewarded with the Binance Coin (BNB), the native token of the Hong Kong-based exchange.     

Despite China’s crackdown on cryptocurrencies, Binance has managed to enjoy monstrous success against all odds. It literally had to temporarily suspend registrations because of incredibly high demand. As of now, CZ-led Binance records daily trading volumes that exceed $1 bln. Such a big volume is partially attributed to the huge speed of transactions on the exchange. Binance is able to process up to 1.4 mln orders in a single second. Still, CZ keeps it humble.    

“As for us, we try very hard to not be number one all the time, because being number one creates other problems sometimes, especially with regulators.’’ – CZ

Now, Binance exchange is expanding globally, landing partnership after partnership. It is worth mentioning that Binance exchange has already set operation in Malta, Singapore, and other countries. That being said, it is important to determine whether the exchange lives up to this immense hype.

Apart from English, Binance exchange — an East-oriented exchange — also supports Chinese, Korean, and Japanese. Given CZ’s ambitious plans to create a truly global digital asset trading platform, more languages are expected to be added in the future.

Setting up an account

Let’s jump right into the signup process on Binance!

The process of purchasing cryptocurrency is rather straightforward. In order to create your Binance account, click on the top right corner where it says “Register”. After that, you have to fill in all the necessary information. Complete the captcha by scrolling the puzzle to the missing position, and look for an email in your inbox.

Binance account

Then, simply log in to your account. You will see a pop-up window that asks you to enable 2FA on Binance (you have to download an application and scan a QR code).

a pop-up window

As you can see, the registration process for the exchange is very simple and straightforward. In fact, you are already able to withdraw up to 2 BTC from Binance even without confirming your identity.

Depositing Cryptocurrencies: What are the available payment methods?

Since this is a crypto-to-crypto exchange, cryptocurrencies remain the only available payment method on Binance. In order to buy altcoins, you have to buy Bitcoin or Ether on Coinbase (or any other fiat-to-crypto exchange first). Most of these assets are traded against these two currencies, so it makes sense to deposit them first on the Binance exchange.  

Once you see the list of coins, simply click the “Deposit” button.

 the list of coins

You have to know your Bitcoin address in order to be able to deposit money into Binance. Simply copy the Binance address and deposit funds from your ordinary wallet (the same modus operandi applies to Ethereum, Litecoin and plenty of other assets).

the Binance address

NB: The funds won’t be available in your account instantly! It may take up to a couple of hours until your money gets deposited to your Binance account from another exchange, but you will be getting your coins in a snap after five network confirmations.

Purchasing Cryptocurrency: Buy Bitcoin, Ethereum or any altcoin!  

In order to buy crypto on Binance, you have to go to the “Exchange” section and choose the “Basic” option in a drop-down window. Once you’ve done that, enter the ticker of any cryptocurrency of your choice in a search box to select a corresponding trading pair (most assets are traded against Bitcoin or Ethereum).

a drop-down window

Select this trading pair in order to see a candlestick chart that displays the most recent price fluctuations pertaining to a certain cryptocurrency that is listed on the Binance exchange.  

a candlestick chart

If you are willing to purchase crypto on Binance, there are two available options on the exchange: a market order and a limit order. Buying any cryptocurrency at a current market price on Binance presupposes the creation of the market order. Meanwhile, the limit order allows buying (or selling) coins at a specific price without the need to constantly monitor the Binance exchange.       

Binance

Trading Fees

There is a flat trading fee on Binance that is set at 0.1 percent. Back in July, Binance launched a new trading fee discount program that ranks users based on their trading volumes and the current BNB balance. As the table below shows, maker fees and taker fees can be reduced to 0.02 and 0.04 percent respectively. Obviously, even the minimum discount remains a pipe dream for run-off-the-mill Binance traders since your monthly trading volume has to exceed 100 BTC ($641,833 at the time of writing this article). Meanwhile, the highest VIP 8 level on Binance remains an exclusive Bitcoin billionaire club since 150,000 BTC is very close the $1 bln mark (it’s very questionable whether the biggest crypto whales can boast such enormous trading volumes on the exchange).   
Trading Fees

There is also a 25 percent discount on all trading fees paid in the BNB token (according to Binance’s white paper, this discount will dwindle each year until it completely disappears in 2021).

Deposits do not incur any additional payments, but there is a withdrawal fee that depends on the digital asset of your choice (some digital assets in the likes of NEO do not presuppose any withdrawal charges on the Binance exchange).

Transaction Limits

Given that Binance is a crypto-to-crypto exchange, you cannot deposit fiat currencies. However, when it comes to crypto, you can deposit an unlimited sum of digital assets. Still, there are withdrawal limits in place that directly correlate to your verification level on the Binance exchange.

If you want to break the chains of the 2 BTC per day limitation, you have to go through the Binance verification process. In order to reach Level 2, you have to enable 2FA (that is a mandatory requirement on every exchange that helps to enhance users’ protection). After that, you have to complete your KYC verification by submitting your personal information to the Binance exchange (name, address and a photo of your ID).

Once you’ve done that, you are free to send up to 100 BTC to your wallet on a daily basis. Notably, the verification process on the Binance exchange is significantly less invasive compared to other exchanges since only the photo of your ID is required to seal the deal.

High-dollar investors are able to withdraw even more than that, but they need to contact Binance’s customer support if there is such a necessity.

Security: Is there any reason to be worried about your coins?

It is absolutely clear that the ability to build an extensive user base in such a short span of time stems from establishing a high level of trust. Unlike an armada of other Chinese exchanges that are often associated with fake trading volumes and other shenanigans, Binance seems like a robust trading platform. Does Binance really offer top-notch security?

Unlike Coinbase, a leading fiat-to-crypto exchange, CZ-led Binance doesn’t provide enough information on how it is supposed to secure the funds of its clients, which might be concerning for some Binance investors. One would be naïve to assume that Binance, the biggest exchange on the market that is expected to rake in $1 bln even amidst the crypto rout, would not take its users’ safety seriously. On the flip side, the infamous Mt. Gox fiasco proves that no one is too big to fail in this fledgling industry, and Binance could see the same fate.

In fact, Binance almost suffered from a major phishing attack back in March. The hackers collected users’ logins for months with the help of scam websites in order to steal their funds. All altcoins from Binance users’ wallets were converted to BTC, but then they were stymied by the withdrawal process. Since these individuals started pumping Viacoin beforehand, they turned out to be the only ones who lose funds while the attack itself had been effectively prevented by Binance.      

NB: Always check the website address before entering any sensitive information that could compromise the safety of your Binance account!   

Furthermore, there are numerous security features that will help you to enhance the protection of your Binance account:

numerous security

Speaking of the regulatory side of this issue, one has to point out that Binance is not registered in the US, which essentially means that the exchange doesn’t have to comply with SEC’s policies.    

Back in September, U.Today reported about an explosive report of New York Attorney General Barbara Underwood who states that Binance, along with some other big-name exchanges, do not protect their users properly from manipulations. That doesn’t necessarily mean that Binance broke the law — the watchdog simply requires more clarity on investor protection.

Customer Support

The success of a certain exchange largely depends on how responsive its customer support is. HitBTC, for instance, provides its users with disastrous feedback despite also being one of the leading exchanges. Speaking of Binance, there is also room for improvement since the exchange doesn’t feature live chat support — a very convenient tool if there’s a need for a quick reply. Moreover, Binance users do not have the ability to contact the support team over the phone.

Customer Support

One can leave a request on their website and wait for a reply that is sent to his/her email address. Since Binance is positioned to become a global exchange, there is a multilingual customer support. However, Binance is usually criticized for a long response time (it usually takes three days for Binance’s staff to answer the request). Still, Binance has a good social media presence: it has more than 880,000 followers on Twitter alone, and CZ himself often tweets too, keeping Binance’s user base constantly engaged.

Pros and Cons

Binance advantages:  

  1. Big and solid user base. The fact that Binance is globally trusted by so many traders is a clear indicator that it is a force to be reckoned with. Moreover, as mentioned above, Binance is perfectly suitable both for seasoned traders and beginner-level users who are making their first foray into the world of crypto.    

  2. A gargantuan amount of coins. Binance has become the mainstay for those who want to diversify their investment portfolio with altcoins.

  3. The high speed (Binance is able to process up to 1.4 mln TPS).

  4. A competitive fee structure with a transparent system of discounts offered by the Binance team.  

Binance disadvantages:

  1. Customer support that is less responsive to Binance compared to other rival exchanges.   

  2. There have been numerous complaints about withdrawal support directed at Binance.

  3. China. Binance is based in Hong Kong, but it still remains in China’s crosshairs (which retains its hawkish stance on crypto).

  4. Privacy concerns. Binance is storing users’ data, which might be alarming for those who value their privacy.

  5. The absence of fiat deposits and withdrawals on Binance (in order to buy Bitcoin, you have to deposit Bitcoin from Coinbase).     

Decentralized Exchange in the offing?

While already trumping all other exchanges in the crypto-to-crypto department, Binance is also inching closer toward launching its own decentralized exchange (DEX) that is expected to go live in Q1 2019. BNB will reportedly be a native currency on the exchange that is supposed to grant users the freedom of being in full control of their funds.   

The topic of decentralized exchanges has always been a rather debatable issue in the crypto space. While pundits in the likes of Ran Neuner call them the future of the crypto industry, the existing examples of such exchanges don’t have even an ounce of the popularity of their centralized competitors (that actually applies to all dApps).

The aforementioned fees remain the bread and butter of Binance, but Ethereum’s cofounder Vitalik Buterin already came up with a solution to reward the developers of decentralized exchanges by embedding native fees into the smart contracts (case in point: EtherDelta).

CZ believes that Binance is the best alternative of a decentralized exchange since it has a robust infrastructure. The CEO claims that the most pivotal advantage of decentralized trading platforms over centralized ones consists in the ability of users to fully control their funds. There are no user accounts — all transactions are conducted on a blockchain. In this case, a centralized exchange in the likes of Binance doesn’t serve as a custodian of wallets.

Conclusion

The fact that Binance rose to prominence in practically no time doesn’t come as a surprise: the exchange stands out among its competitors because of its low fees, a bevy of available coins, and a perfect reputation (Binance still hasn’t suffered a single hack since its very inception). On the flip side, everything is changing at a breakneck speed in the world of crypto — one day you're the cock of the walk, the next you're the feather duster.

Binance continues to assert its dominance by opening offices around the globe, but the exchange still hasn’t managed to stand the test of time to appear in the “old-timer” crowd. Anyway, the future looks bright for CZ-led Binance, and there is no reason why it shouldn’t be your first choice when it comes to C2C exchanges.

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WikiCoin CryptoHavens: Cryptocurrencies in Japan

📚 Wikicoin
With its friendly jurisdiction, Japan is one of the world leaders in cryptocurrency support and competitive cryptocurrency exchanges.
WikiCoin CryptoHavens: Cryptocurrencies in Japan

Japan’s stagnating economy contributed to fierce competition on Japanese cryptocurrency exchanges, creating a strong crypto market that is encouraged by supportive legislation. In addition, widespread Bitcoin acceptance and development of alternative currencies like Cardano make Japan one of the world leaders in Blockchain technology adoption.

Friendly jurisdiction

Japan has emerged as one of the biggest crypto supporters in the world. In April 2017, the Japanese government enacted the Virtual Currency Act which provided the following:

  • Bitcoin will be considered a legal payment method. (Not a legal currency as most mistakenly think.)
  • Virtual currency exchanges will be regulated.
  • A tax reform was also issued separately which removed a consumption tax. This was stopping foreign investors from buying Bitcoins in Japan’s market.

Even before the act was issued, the crypto market in Japan has been extremely impressive. More and more young investors have been seduced by the possibilities that crypto presents. This is, in large part, because of the stagnation of the Japanese economy.

Competitive exchanges

When Prime Minister Shinzo Abe got elected, he promised a myriad of economic reforms which were popularly called “Abenomics.” However, reception to these reforms has been disappointing, to say the least. Many foreign investors have outright dumped Japanese stocks. Their GDP growth is floundering at 0.6 percent.

This has led to the disillusionment of many Japanese investors, who have started looking at crypto as an alternative. In fact, competition between Japanese exchanges is so fierce that most of them are not charging any fees at all. Some have even implemented negative fees just to get a higher trading volume.

Bitcoin adoption

Since Bitcoin became a legal method of payment, more and more retailers have partnered up with Japanese exchanges to accept Bitcoin. Bitcoin is now accepted in over 260,000 stores in Japan. Some of the big players that have started accepting Bitcoin as a method of payment are:

  • Bic Camera, the consumer electronics giant
  • Recruit Lifestyle, which has partnered up with Coincheck

Cardano

Apart from all this, Cardano (ADA) is pretty much synonymous with Japan. Many people are calling it “Japan’s Ethereum.” Japanese company Emurgo is, after all, responsible for the funding behind ADA.

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🎓 Trading Guide Andrew Strogoff

Bitstamp Review: Cryptocurrency Exchange For All Types Of Traders

Trading Guide
Bitstamp is a very tough player of the crypto exchange industry, offering many features to its clients
Bitstamp Review: Cryptocurrency Exchange For All Types Of Traders
Contents

trading platform

Hello, mates. I know that many of you are looking for a trading place where you can buy and sell both cryptos and fiat money. This review is related to Bitstamp cryptocurrency exchange. Here I will cover such points as registration procedure (including personal verification), trading features, conditions (including fees) and some other important aspects.

Before I start describing the main features of this trading platform, I would like to familiarize you with the company itself. Bitstamp is one of the oldest cryptocurrency marketplaces in the world. The company began its activity in 2011 in the UK. However, later they have opened other offices in Luxemburg and New York. Crypto exchange Bitstamp received its license in Luxemburg.

This marketplace is widely known within the cryptocurrency community and I would tell that this is true as you hardly can find a trader who heard nothing about it. Moreover, several famous and popular tabloids like Forbes, Coindesk, Reuters have mentioned Bitstamp in their articles. The company has established cooperation with Ripple, CACEIS and Swissquote.

This crypto exchange trading place offers English only. There are no other language options at all. However, it gathers traders from all over the world.

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How to create an account with Bitstamp

Before you start trading with this exchange, you need to create your account. There are no difficulties to do it, as the form is very easy. You need to fill in your name, email address and accept terms of use and Bitstamp Privacy Policy.

 account with Bitstamp

Above you can find the form that I have already filled in. After pressing on “Register” you will proceed to the second step. You will be sent an email with a confirmation link in order to end account creation procedure.

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Once you have created your account, you can proceed with its verification. Here I want to make a reservation. I think it is not a secret that there are trading platforms with no obligatory verification procedure, meaning without confirming your identity, you will be able to trade but with some limitations.

Bitstamp requires verification from all service users without any exception. Moreover, you will not be able to proceed to deposit and withdrawal step before you confirm your identity. This requirement is obligatory because the platform has a license.

Now I am going to stop on details of the verification procedure. After you have created your account, you can login and navigate to “Verify account.”

I can say that this procedure is a bit harder than creating an account as you have not only to provide your personal data, but also to provide exchange with your ID documents scans. What kind of personal information is required?

You need to provide Bitstamp with data, indicated in your ID. Additionally, you need to upload the following documents:

  1. ID photo.

  2. Proof of residence document photo (this can be your bank statement, utility bill or taxes certificate, for example).

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How to deposit and withdraw money

Bitstamp offers the opportunity for all its clients to deposit and withdraw in both fiat currencies and cryptos. You can use, for example, VISA or MasterCard as well as SEPA (European Bank). As for cryptocurrencies, you are allowed to deposit and withdraw with Bitcoin, Litecoin, Ripple, Ethereum and others.

How to place your first order with Bitstamp, order types, trading tools

When you have already created your account and verified it, deposited some amount, you can start trading. Here, I want to make a couple of points for you to pay attention to. Bitstamp offers a high-quality trading platform with several features including professional charts and some other important.

The first thing that I have noticed when I have entered the platform for the first time was the number of currency pairs, which is lower as compared to the most of competitors. The number of pairs is slightly above 10.

order typesNow let’s get down to the trading platform. This is a very important aspect for every trader as charts allow users not only to see the current price but also to analyze it using historical data. Bitstamp offers modern full functional chart with several trading tools.

Take a look at the screenshot. You can see there candlestick chart. In the upper part of the chart, you can choose indicators and different graphic tools. As for indicators, there are many useful algorithms including the most popular Bollinger Bands, ADX, ATR and the others. Graphic tools are represented by different types of lines and other geometric patterns. Here you can find Fibonacci retracement as well.

Before you open any trade you need to choose a trading pair. This option is also available in the upper side of the platform. The next step is to choose the order type. Here I want you to pay attention to the different types of trades that are available with Bitstamp: they are the following:

  1. Instant order. The easiest one that is recommended by the exchange to beginner traders. Here you buy or sell cryptocurrency at the current market price.

  2. Market order. Is it a kind of instant order, but you can buy or sell cryptocurrencies at best prices. This order is suitable for those who have some trading skills already and want to improve their entry points.

  3. Limit order allows traders and investors to choose the price at which they will buy or sell cryptos. This one is suitable for professionals and skilled market players. The main idea of this order is to set a price at a desirable level and wait for the crypto to reach it.

  4. Stop order. This kind of trade allows users to limit their losses in case if the price goes in the opposite direction.

Once you have chosen your pair and order type, you can input the amount you want to sell or to buy and start trading. As far as you can see, there is nothing difficult here.

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Bitstamp fees

Almost all cryptocurrency exchanges take their fees not only for trading but also for deposit and withdrawal procedures. Trading fees at Bitstamp are diversified meaning the more you trade, the less you pay. This is a fair approach, I think as exchange earns more when you have higher month trading volumes.

As for deposit and withdrawal fees, they are taken by the company but they do not come directly to the company’s pocket as this money goes to payment systems.

The highest trading commission rate is 0.25 percent. It is taken from all those who’s monthly trading volume is below $20,000.

Security and support service

I have a good news for you. Bitstamp requires two-factor authentication since June 2018. This is a mandatory procedure, which increases the security level of your own trading account. You can use both Google Autenticator or Duo Mobile services.

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Moreover, you can switch on notifications about all the important events that take place in your trading account. Those messages will be transferred directly to your email address. This allows users to get updates on all the important events and take measures in case of any suspicious acts.

As for the support service, some users say that sometimes it takes time to receive any answer from the team. The speed of reaction is slow, but to tell the truth, I think that this is due to the inflow of investors. Bitstamp is one of many exchanges having such problems and I hope they are going to solve them in the future.

Pros and cons

This is my most preferable part of any crypto exchange review. Here I’m going to underline those pros and cons I think the most important of the company. I’m going to start with advantages. Here they are:

  1. Great working experience. Bitstamp operates since 2011. The team does not hide their members, which is a positive aspect as they are trusted by the crypto community.

  2. Bitstamp has its license and operates according to legislation. Users may be sure that their money is safe and they will not be scammed by the administration.

  3. Liquidity. This exchange has high liquidity as there are serious daily trading volumes. This means that the currency pairs are less volatile and you can use all types of orders.

  4. Several payment methods allowed. Bitstamp offers not only cryptocurrencies but also fiat money. You can deposit USD and EUR as well as withdraw them from your trading account. Credit and debit cards such as MasterCard or VISA are also available.

  5. Friendly user interface. I heard no complaints about Bitstamp’s interface from users and I found no negative testimonials about it.

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And now I’m going to share with you my negative thoughts about the exchange. They are not numerous, but I think it will be interesting for you:

  1. Verification requirements. This is not the big problem, but I think there are those who want to stay anonymous in crypto industry. Bitstamp does not allow to stay in shadow as every user has to do the verification procedure before getting access to trading.

  2. A small number of cryptocurrency pairs. It is true. You will not find any altcoins from above the top 20. However, Bitstamp offers in its turn the possibility to work with hybrid pairs including USD and other fiats. The exchange can be used as your pass into the world of altcoins as you may buy BTC or ETH here and then transfer those cryptos to other exchanges with a wider range of pairs, which do not support fiat money.

  3. Lack of localization. The website is in English only. Other languages are unavailable. I’m far from thinking that the international language is not enough for such a trading platform, but for some traders, it may be a real problem to work with the exchange.

Bitstamp overview

Before making the full stop, I would like to make a brief overview of this crypto exchange. I’m not going to give any recommendations as it is up to you to decide whether to place your investments there or to find some other trading platforms. However, I want you to pay attention to some interesting moments.

Bitstamp operates since 2011 and there were no significant security issues. This is the first thing that I have paid attention to. Bitstamp offers great opportunities for all those traders who want to use technical analysis in their trading routine as there is a large number of indicators and other important tools available.

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How to Trade Cryptocurrencies

Trading Guide
Eight steps to start cryptocurrency trading and how to avoid common mistakes
How to Trade Cryptocurrencies
Contents

Almost everyone has heard about Bitcoin, altcoins and the opportunities that they offer not only to those, who own them but also to those, who speculate or invest in cryptocurrencies. The number of traders is growing every day and the beginners want to know how to trade cryptocurrencies and to earn money in this industry. We have decided to create a guide for crypto traders with a step-by-step explanation of how to begin and what to do.

Step 1. Find an exchange

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The first thing every trader has to do before starting his or her career is to choose a place where to place orders (to buy and to sell cryptocurrencies). There are several exchanges nowadays offering services to different types of investors.

How to find a good one? We are going to write a separate guide, but here we give you some key points. What aspects are important to pay attention to before creating an account? They are the following:

  1. Reputation of an exchange. When you find one, look for more information about its activities and reputation. Read traders’ testimonials. However, do not forget, that those testimonials may be bought by exchange or its competitors.

  2. Security level. Early exchanges like MT.GOX and the others had very poor security levels allowing hackers to breach their systems and to stole traders’ money. Nowadays many websites use hot and cold wallets, multisig and other serious methods to ensure the safety of investors’ funds.

  3. Trading conditions. This is an important factor as exchanges offer different commission plans for depositing and withdrawals, as well as for inner trading transactions. Some websites have no inner commissions at all (like Cobinhood, for example).

  4. Depositing and withdrawal methods. There are two main types of exchanges. First offers Bitcoin, Ethereum and several popular coins along with fiat money. You can use banking cards and some electronic payment methods to deposit and withdraw from there. Second offers hundreds of altcoins, but as for depositing and withdrawal, you can use cryptocurrencies only.

  5. Trading platform. Some websites offer Tradingview platforms with different types of analysis tools like indicators, lines, channels, Fibo and the others. On the other hand, some exchanges offer simple and primitive trading terminals with Japanese candlesticks and timeframes. There are no analysis tools there.

  6. Order types. Professional investors prefer websites with different types of orders including limit, stop losses, take profits and the others.

  7. Verification procedure. Privacy is the key advantage of the crypto industry. However, the majority of exchanges require verification.

Recommendation:

Before you take the final decision to start trading with one or another website, try to contact their support service. Pay attention to how fast and complete the answers are.

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Step 2. Create an account

When the first step is done, meaning you have found an appropriate exchange, your next step is to create an account. Almost all exchanges have a simple sign up procedure. You need to create a login, provide an email address and a password.

Registering procedure comprises email confirmation. Some websites recommend installing two-factor authentication in order to increase account safety level.

Recommendation:

You may be asked to complete the account verification procedure in order to remove the restrictions. We strongly recommend providing the exchange with correct personal data as you will be required to send your ID documents scan copy.

Step 3. Choose your coins

Choose your coins

Bitcoin is not the only one nowadays. There are hundreds of different altcoins that you may invest in or speculate on. Professional traders advice to choose a couple of coins to start. The wide range of cryptos is good for diversification. However, beginners are recommended learning more about each asset they are going to buy, especially when they are going to invest. Why is this necessary?

First, when you plan to buy a cryptocurrency in order to hold it for a long time, you need to understand what is behind its price. Every coin is not simply a currency, but a project using some technology and offering some benefits to the users.

Ethereum, e.g., is a platform for developing decentralized applications and smart contracts. The last serve to conduct any kind of business without intermediaries. Monero is a secure and untraceable cryptocurrency, allowing users to conduct transactions with a high level of anonymity.

In order to understand whether it is a good idea to invest in this or that coin, you need to analyze whether it is promising or not. Every project has its own website and whitepaper, which are a kind of a presentation. Moreover, you can find detailed coins’ reviews on our website, which facilitates forecasting procedure.

Second, you need to compare the price of the chosen cryptocurrency with its perspectives with regard to its technology. Some coins may grow for no apparent reasons. There are risks of a pump & dump manipulations in this case. Such cryptocurrency is not for long-term investors as once manipulators reach their goals, they will dump coin and its price is likely to fall towards the initial levels (before the pump and dump strategy was launched).

As for traders who speculate on coins in short term, they also need to learn more information about the cryptocurrencies they are going to trade. However, as they buy and sell currencies within a couple of hours or days, they are better to pay more attention to technical analysis.

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Step 4. Choose your amount to invest

Before you can start trading cryptocurrencies, you need to deposit some amount of money to your trading account. How much money to invest?

It makes sense to deposit as much as you can in order to earn higher profits. However, cryptocurrency trading is risky as any other type of speculations and investments. You may have significant profits there but also lose all your money (or part of your investments).

How to choose the right amount? There are several pieces of advice. Let’s go through some of them:

  1. The easiest way to determine how much money to invest is to understand how much money you can lose without any psychological consequences. The more money you put into your trading account initially, the more you will be under psychological pressure.

  2. Determine your trading goals. Sometimes it helps traders to understand how much to deposit.

  3. Never take loans or make debts to increase the amount of your trading account. Otherwise, you risk losing not only your money but also borrowed funds that you will need to repay later.

  4. Another advice is to avoid taking money from family’s budget. Trading funds should be free of any obligations.

Step 5. Analyze charts and events

Analyze charts and events

Before you take any trading or investing decisions, take a look at the charts in order to forecast prices. There are several tools that you can use in order to understand whether to buy or to sell a coin. You need to have a strategy, which will give you nearly exact entry points.

Is it enough to simply analyze charts? Naturally, you need to combine technical analysis with fundamental forecasting method. It is better to keep your ears open as technical analysis can’t show you the drivers that make prices go in this or that direction.

When you know the reason for fluctuations and trends, you have an important information that may help you not only to forecast future directions but also to understand their lifespan.

Let’s see South Korea bans crypto exchanges. What will happen next? Bitcoin and altcoins will probably suffer significant losses as South Koreans will eventually get rid of cryptos. This decision will also be a sign of another serious cryptocurrency crisis as coins will lose their credit among newcomers.

This is just an example of exchanges work in South Korea with no limitations in the moment of writing and it is unlikely they will be closed or banned in future. However, this example is a good one as it shows how the situation may change in case of similar events.

Is it possible to trade without any analysis? If you want to exchange one crypto on another in order to use coins to buy something or for other purposes, you may skip analysis as you need crypto in the moment of buying and you will not wait until it becomes cheaper to buy or more expensive to sell.

However, if you want to make a profit by buying one coin and selling another, analysis is the key factor of success as you need to forecast future prices.

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Step 6. Diversification

No matter what you are going to do– investing or trading, diversification is the key to successful market operations. What does it mean “to diversify”? When you buy one coin, you risk losing all your investments or a part of your funds in case if the price of this crypto falls down. When you buy several coins simultaneously, those risks are distributed between all your portfolio.

In case all coins fall down, you will lose all your investments or a part of your funds. However, if several coins hold their positions and even grow at the same time when the others fall down, you have a chance not only to save your money but even to make profits.

Diversification is rather hard as you need not only to buy different assets but look for the currency pairs that have no correlation (or minimum correlation). Otherwise, there is no sense in such activity. Let’s say you buy some amount of Bitcoin and Litecoin, two currencies that have almost 100 percent correlation meaning BTC and LTC have the same trends. When Bitcoin goes upwards, Litecoin follows it and vice versa, when BTC/USD falls down, LTC/USD does the same.

It makes no sense to buy both currencies to create a portfolio as they go in one direction in the majority of cases. Therefore, you need to find such cryptos that have no connection between each other.

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Step 7. How much to invest in a single position

Before you place an order, you need to calculate you single position amount. Many beginners having no skills or experience in cryptocurrency trading, put all their money into trading. Let’s say they have $1,000; they buy Bitcoin for $1,000 leaving no money in reserve.

This is a very poor money management strategy as when you invest all your funds in one single position, you leave no reserve behind you. If there is other interesting opportunity, you will have no money to open position.

It is better to trade using less than 5% of all your funds as this strategy reduces risks. Additionally, you have a reserve, which may be used later when other trading opportunities arise. Let’s say you have deposited $2,000 to your trading account. The amount of a single investment may be $100 in this case.

Why is it necessary to follow money management rules? They make a trader more disciplined and help to protect an investor from higher risks. Money management is a very important point, which is described in one of our next lessons.

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Step 8. Choose your order type

Several exchanges offer different types of orders nowadays. In addition to market orders, you may use the following types:

  1. Limit Order.

  2. Stop Market.

  3. Stop Limit Order.

  4. Trailing Stop.

  5. Fill or Kill.

  6. One Cancels Other.

Let’s describe all of them. Market order is the simplest way of cryptocurrency trading as you buy an asset at its current market price. Let’s say you want to buy Bitcoin. Its current price is $8,000. This price meets your requirements and you place market order. The system automatically matches orders and the transaction is conducted instantly.

Limit orders are executed at the desired or better price. This one is a bit harder as you need to forecast not only the market but whether the price is going to reach your Limit Order level as well (otherwise, you will not be able to open a position).

How does it work? Let’s say, Bitcoin price is $8,500. You want to buy BTC/USD but think that its price will fall down towards $8,000 before going higher. You can place a Limit Order in this case at $8,000 in order to “catch” the best possible price.

What will be next? Let’s see BTC/USD’s price falls down to $8,000. You Limit Order is executed and you are in the market. In case if the price falls to fall down to $8,000, your Limit Order will be suspended until the price touches the level.

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Stop Limit Orders are used when the market volatility is high. Let’s assume you want to buy BTC/USD. The price currently is at $8,000. You think that Bitcoin is able to fall significantly during the next fork. However, you don’t want to sell it now as it has perspectives to grow as well. What to do next?

You may place Stop Limit Order at $7,000 for example. If the price reaches this level, Stop Limit Order will become a simple Limit Order (sell). The same thing for situations when the price goes upwards. You can place an appropriate Stop Limit Order to buy an asset if the price starts an uptrend.

Those Stop Limit Orders are especially useful in situations when you work with levels meaning you think that BTC/USD will break through the next resistance level for instance. However, there is no entry point currently. You want to open a position only when the price jumps over the resistance line. You need to place a Stop Limit Order above this level.

Stop Loss Order is designed to reduce traders’ risks. When you place it at a certain level, you want your position to be automatically closed there. Stop Loss Orders are tools of risk management. Let’s assume you have placed a BTC/USD buy order at $8,000 meaning you think the currency pair is going to grow. In order to protect your position, you place also a Stop Loss Order at $7,500. If the price goes downwards and reaches $7,500, your position will be closed automatically. You lose $500 in this case, but if the price continues to fall down, your Stop Loss Order prevents you from further losses.

Trailing Stops is a kind of Stop Loss Order. It varies from standard SL as it will follow the price at a certain set distance once placed.

Fill or Kill is a Limit Order, which his to be completely done or canceled.

OCO (One cancels Other) allows placing a couple of orders. If one of them is done, another cancels automatically.

Conclusion

We have described the main steps of cryptocurrency trading. They are very important as trading success comprises many aspects including the right choice of exchange, analysis, rules of money and risk management.

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