Cryptocurrency Exchanges Explained
Cryptocurrency exchanges are platforms that help investors trade (buy/sell) virtual currencies. There are dozens of exchanges all over the world and each of them have different features for traders. These platforms will be very useful if you want to buy cryptocurrencies or trade in this exciting market.
Coinbase is one of the largest and most trusted cryptocurrency exchanges in the world. This exchange also works as a wallet. You are able to buy, sell and hold cryptocurrencies using Coinbase.
Once you are verified, you can connect your bank account into Coinbase, deposit funds and start trading digital assets. The whole process is very fast and simple. Indeed, Coinbase is considered to be one of the best crypto exchanges for beginners all over the world.
You can deposit EUR, USD and GBP. Take into consideration that not all countries are supported by Coinbase if you want to deposit funds.
Coinbase provides you with a nice interface that would help you to follow your crypto portfolio and understand whether it is performing properly or not. Furthermore, you can also earn cryptocurrencies on the Earn Crypto section.
Sending and receiving funds is very easy using Coinbase. The platform is very intuitive and it will be very useful for newcomers and also for expert users.
Binance is one of the best cryptocurrency exchanges out there. The exchange is currently offering a large number of services and it allows users to buy virtual currencies through a wide range of methods, including debit and credit cards, peer-to-peer and through other third-party services.
In the “Markets” menu, you will have the possibility to see all the number of coins and trading pairs that are currently supported by Binance. You can filter by coin, fiat markets, altcoins, and many others.
The “Trade” menu would help traders select the platform and interface they want to use to trade virtual currencies. It is possible to select among “Basic”, “Classic”, “Advanced”, “OTC” and finally “P2P.”
The basic platform is the easiest way to convert your funds into another cryptocurrency. If you have BTC or any other currency you can exchange it for others. Although this is very easy and fast to do, the fees are higher than using limit orders in the classic exchange.
The Classic platform is the solution that you want to use if you are buying or selling digital currencies and you want to get valuable information about the market. Nonetheless, the Advanced Platform is very useful and it provides more clear information. You can use different orders to purchase or sell digital currencies using the Advanced or Classic platforms. For example, you can use limit orders to buy Bitcoin at a certain price rather than using a market order with higher fees.
Binance is also allowing you to trade crypto futures. Futures allow you to bet on Bitcoin going up or down. These are contracts that you are going to be trading rather than the real asset. These contracts represent the price of the underlying digital asset.
At the same time, you can also use leverage, which would allow you to trade with more money than what you have in your account. Although this can be very profitable, this can also be very risky.
Traders and investors can also control their funds using the different wallets that Binance is offering on its platform. Binance is also offering many other services, including savings in cryptocurrencies, staking and DeFi solutions.
Altcoin trader is one of the largest exchanges in South Africa. The main feature of this platform is the large number of coins that they are offering to traders. While most exchanges offer Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC), this platform gives access to investors to a wide range of tokens.
In this platform, you will be able to deposit fiat currencies and start trading virtual currencies. The exchange offers a clear dashboard and a more advanced trading interface. Additionally, you can buy other kinds of assets such as Gold and get it delivered to your home.
Okex is one of the most-used crypto exchanges in the world. The platform offers a large number of trading pairs and it tends to be among the exchanges with the largest trading volumes.
In the last few years, Okex has been expanding and offering new services and solutions in the cryptocurrency space. Nowadays, Okex is the first choice of newcomers that want to get access to the crypto market.
JustSwap is one of the so-called decentralized exchanges. This platform is based on top of the TRON network and it helps traders exchanging TRC20 tokens. Investors can exchange TRC20 tokens based on a sophisticated system price.
All the fees collected in each of the trades will be collected to liquidity providers of the protocol. This ensures decentralization and the security of the network.
Uniswap is one of the most advanced exchanges in terms of functionalities. The platform works as a decentralized exchange that handles smart contracts on top of the Ethereum (ETH) blockchain. Users can easily swap ERC20 tokens and Ether (ETH).
In the last few months, this platform attracted several users due to the expansion of the DeFi market and the possibility to get access to new and unique tokens.
How to Buy Your First Bitcoin
The first thing you need to know is that if you hold Bitcoin, then you will be part of a fast-growing market that may offer large opportunities to investors. This is why it is so important to understand how to buy your first Bitcoin.
Cryptocurrency exchanges are the platforms that are currently allowing us to buy Bitcoin or other virtual currencies. These platforms can be considered as banks for virtual currencies or brokers in traditional financial services.
These cryptocurrency exchanges allow you to deposit funds (including fiat currencies such as EUR, USD, GBP) and to buy virtual currencies with them. Other crypto exchanges will also allow you to easily trade virtual currencies if you want to perform trading activities.
The first thing you need to do to buy your first Bitcoin is to sign up to a crypto exchange, deposit funds and acquire your BTC. There are different exchanges in each country. For example, you can use Luno if you are in South Africa or Binance and Coinbase if you are in the United States or Europe.
How to Buy Altcoins on Altcoin Trader?
As we have explained in previous courses, altcoins are coins that are not Bitcoin. These altcoins can be used for different things, including speculation or participating in blockchain networks, among other things.
One of the best platforms to buy altcoins in South Africa is Altcoin Trader. This platform will help you to acquire several cryptocurrencies considering they have one of the largest numbers of altcoins in South Africa.
First of all, you will have to deposit your Bitcoin or even ZAR. However, you need to use a bank account to send the funds to this platform (if you use ZAR). Once you send the funds, you can start trading. You can select, buy, sell and hold several virtual currencies, including gold. Nonetheless, if you have deposited BTC, you will have to sell them and use ZAR to buy altcoins. The exchange does not offer a wide range of BTC trading pairs.
How to Buy and Trade Bitcoin on Luno?
Luno is one of the best cryptocurrency exchanges in South Africa. It is the easiest way to buy and trade cryptocurrencies. However, you can buy and trade Bitcoin (BTC), Ethereum (ETH), and many other cryptocurrencies. If you want to deposit funds to Luno, you can use your bank account and send ZAR to the exchange.
Once the funds arrive in your account, you will be able to trade against BTC, ETH and other coins. You can select the “Exchange” option and buy and sell virtual currencies. This would help you to make some profits. If you buy at a fair price and you sell BTC or ETH at a higher price, you can make some nice profits at the end of the month. Basically, you buy low and you sell high.
You can use limit orders and market orders on Luno. This would help you get BTC and ETH immediately and also at a specific price (if you are not happy with the market price). You need to have a clear trading strategy that will help you make profits on the funds you have. Luno will help you to make profits in both BTC and ZAR terms.
For example, if you bought 1 BTC at ZAR 100,000 then you can sell the same BTC at a higher price and make profit from the difference in price. However, if the market continues to grow and you sold your BTC for ZAR, then you will not be able to buy the same amount of BTC you previously bought.
Luno fees are currently at 0.10% taker and 0% if you are a market maker. However, if your trading volume is higher, there are some discounts for taker fees.
Peer-to-Peer Trading on Paxful
Paxful is one of the leading peer-to-peer cryptocurrency exchanges in the world. Peer-to-peer means that transactions are made between individuals rather than through an exchange.
For example, if you want to buy 1 BTC from person B, then you usually go through an exchange. However, in P2P platforms, you can do so by getting in touch with person B, sending the fund to their bank account (or cash in some cases) and once the funds are received, you will get the 1 BTC.
Paxful has over 300 different payment methods available, which would make the whole trading experience much more comfortable for users. When you register on Paxful, you will be able to get a free Bitcoin wallet to receive and send BTC.
You can use a safe account with 2FA authentication and also with 24/7 customer support in case you need help with your trades. With Paxful you will be able to buy and sell Bitcoin in just a few simple steps and without being worried about the payment method you use.
Buy and Sell Bitcoin Using Valr
Valr is a cryptocurrency exchange registered in South Africa that allows users to buy and sell Bitcoin (BTC) and other cryptocurrencies. The platform has been working for almost two years and it is offering users a simple-to-use platform to trade digital assets.
The exchange is currently operating with a scheme fee of 0.00027 withdrawal fee per transaction, 0.20% taker fee and a 0.10% maker fee. In addition, users can deposit funds using their bank accounts and other virtual currencies.
With Valr, you will have access to charts from TradingView and the possibility to also trade virtual currencies against each other, for example, ADA/BTC, ETH/BTC and RCN/BTC, among others. Additionally, ZAR trading pairs are also available for users that like to trade with fiat currencies.
Arbitrage Trading Strategy
Arbitrage is an activity that traders can perform in which they buy cryptocurrencies at a cheap price in one exchange and sell it for a higher price in another exchange. The difference between prices would allow traders to make some profits over time.
You can always do arbitrage trading when you are located in different countries. For example, you can buy Bitcoin in the United States or Europe for $10,000 and sell it for $10,500 in South Africa or another country.
However, there are some challenges. Banks are usually requesting lots of information from users that send and receive large amounts of money across borders. This is why it is always important to follow the regulations imposed by each of the countries you are in. In addition, you should always take into consideration price fluctuations. The price of Bitcoin can move when you make the transfer of your funds from one exchange to the other. This is why you can use stablecoins or faster digital assets such as Litecoin (LTC) or Bitcoin Cash (BCH) that would help you to reduce your exposure to price fluctuations.
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