When it comes to trading cryptocurrencies and crypto assets, one of the main mistakes that most traders make is not choosing the right trading platform that best suits their needs. Your choice of the right crypto exchange should be made considering the kind of coins you wish to trade, the frequency of your trades, as well as the level of experience that you have.
One of the oldest and most popular crypto exchanges that you should look at while choosing the one that is right for you is Bitstamp. In this Bitstamp review, we analyze Bitstamp and see what type of traders it is most suitable for.
What is Bitstamp?
Bitstamp is one of the world’s oldest and most popular cryptocurrency exchanges, and it is registered in the tiny European country of Luxembourg. However, it is headquartered in the United Kingdom.
The platform has been designed in a way that it can cater to both beginner and experienced traders, and this is something that we shall be discussing in more detail throughout the review.
Bitstamp Exchange allows users to buy and sell crypto assets such as Bitcoin (BTC), Bitcoin Cash, Ripple (XRP), Ethereum (ETH), and Litecoin (LTC). These cryptocurrencies can not only be traded for each other, but also for fiat currencies such as USD, EUR, and GBP.
Additionally, the Bitstamp platform also supports a variety of deposit and withdrawal methods such as a bank transfer as well as credit or debit cards.
Bitstamp Review – Pros
The Bitstamp trading platform has several advantages associated with it, which include:
Supports Credit or Debit Card Purchases
One of the biggest advantages associated with the platform is that it supports deposits and withdrawals made through credit and debit cards.
This makes it very convenient for users to purchase crypto assets through these forms of payments and gives Bitstamp an advantage over other exchanges that might not offer the same facilities.
While the exchange does charge fees for deposits and withdrawals made through credit or debit cards, the fact that this is present as an option makes it a lot more attractive as a crypto exchange than several other platforms.
Additionally, the fact that users can add funds through credit and debit cards also means that the deposit process is almost instantaneous, thereby adding to the appeal of the platform. With other platforms that only support bank transfers and wires, the process of adding funds can often take several days.
Competitive Trading Fees
Another advantage of using the Bitstamp platform is that it has highly competitive trading fees.
These fees will be discussed in detail later in the Fees section of this Bitstamp review, however, it is worth mentioning that Bitstamp follows a commission-based fee structure, where users are charged fees based on their trading volumes.
The fact that these commissions are much lower than the industry standards ensures that the platform is attractive to experienced traders and investors who might make a lot of trades, and wish to choose a platform that would reward them for their high trading volume in the form of lower trading fees.
Another advantage that the Bitstamp exchange has is that it is fully regulated and licensed in the European Union, which makes it among the safest platforms out there for users to trade and park their crypto assets into.
For an asset class as volatile as the cryptocurrencies market, regulated exchanges are quite rare, since most of them are still growing, and are not based in one country.
However, this is where Bitstamp stands out from the rest, and its regulatory compliance can reassure investors that their funds are being parked in a safe destination.
We shall discuss the regulations surrounding Bitstamp in detail when we talk about the safety measures associated with the Bitstamp platform.
One of the pillars on which the world of cryptocurrencies and blockchains has been built is that of accessibility since crypto assets allow users to transact with anyone, anywhere in the world.
However, a lot of prominent crypto exchanges usually are not very accessible to people worldwide because of regulations that prohibit them from operating in certain countries around the world.
Again, this is an advantage associated with using the Bitstamp platform, because its regulatory compliance with EU authorities ensures that anyone from anywhere in the world can access the platform and trade the different cryptocurrencies that are available.
However, it is important to note that in some countries, users may not be able to deposit funds into their accounts using bank transfers and/or credit and debit cards. In such countries, only the option of depositing crypto assets will be available to users.
Good Customer Support
Another major advantage associated with the platform is that it offers very active and useful customer support services that are available 24/7.
The platform’s customer support offerings have been divided into 3 parts:
- Users can initially get in touch with the Exchange through the live chat button, which can assist with solving most of the more common and basic queries. This function is available 24X7.
- If the issue is slightly more complicated than what the live chat services can handle, then the user can get it resolved through the phone support helpline of the platform. This is also available 24X7, ensuring that any user queries can be resolved instantly.
- For more complicated queries, email support is also available, and Bitstamp has very good turnaround times in this regard too.
In addition to this, users can also get most of their basic queries cleared through the very extensive FAQs page on the platform.
As we mentioned earlier, the platform has a variety of tools and features that make it suitable for both newer and advanced traders.
A major part of these trading tools that the platform offers is its charting tools, which are very extensive and can let a trader analyze a particular chart in almost any way that they want.
This ensures that advanced traders can make more informed decisions about their trades, and is another major reason why traders might choose to trade with the platform.
Most crypto-traders do not trade the market all the time, and most of them often choose to hold their crypto assets during periods of downtime in the market.
For such traders, it might be useful to trade through a cryptocurrency exchange that allows them to earn passive income on their idle cryptocurrencies through staking. however, most cryptocurrency exchanges do not have this option.
However, Bitstamp does. Staking is a way of depositing your cryptocurrencies so that you can earn rewards in exchange. Bitstamp offers staking services that help you conveniently stake your crypto assets.
The staking rewards that you will earn when using staking through Bitstamp will be transferred to your account minus a 15% fee, which is in line with the industry standards. Bitstamp charges these fees in exchange for providing a seamless way for you to stake your assets.
Currently, staking opportunities are available to users who have a Bitstamp account with cryptocurrencies like Ethereum and Algorand.
Bitstamp Review – Cons
Every coin has two sides, and the Bitstamp trading platform is no exception. There are several cons associated with the platform, which include:
Small Range of Cryptocurrencies
While it is true that the Bitstamp app has a variety of advantages associated with it that make it an active trading platform, there are also several disadvantages, which are mainly centered around the fact that the cryptocurrencies that you can trade through the platform are quite limited.
We shall be discussing the coins that you can trade through the cryptocurrency exchange in detail later in this review, however, it is important to note that the offering only includes a few of the major currencies, which makes it an unattractive crypto exchange for users that are looking to trade altcoins.
Long Verification Process
Since Bitstamp is a secure and trustworthy exchange, trading through the platform involves a long verification process where users have to verify their identity and their address.
However, the problem lies in the fact that as a part of the approval process, Bitstamp is known for asking users to submit a lot more personal information than most other platforms.
One of the biggest features of the crypto world is that users can trade with anonymity without having to reveal a lot of their personal information online, and the intrusive verification process associated with the verification process in setting up a Bitstamp account goes against this, and reduces the level of attractiveness of the platform.
No Shorting Available
There are two kinds of transactions that traders normally make on cryptocurrency exchanges: going long and going short. While the former is usually done when traders expect the prices of the asset to go up, shorting is done when traders are bearish on an asset and expect the prices to fall.
Unlike other exchanges, Bitstamp does not allow users to short crypto assets through the platform, either through the web platform or the Bitstamp mobile app. This is very inconvenient as a variety of trading strategies involve going short on assets, and the absence of this feature reduces Bitstamp’s appeal as an advanced trading platform.
No maker-taker commission structure
While this will be discussed in detail when we talk about the Bitstamp fees structure, it is important to mention this here as well.
Most other major exchanges usually have a maker-taker fee structure, through which they charge lower fees for traders that add liquidity to the market. On the other hand, traders that take liquidity away from the market are usually charged higher fees.
This provides incentive to users for making trades that add liquidity to the market. However, Bitstamp does not have a maker-taker fee structure, and this can dissuade a lot of advanced traders.
Therefore, Bitstamp actually charges a flat fee for all trades regardless of whether you are a maker or a taker.
Bitstamp – Cryptocurrencies Available
We mentioned in the past that even though Bitstamp offers users access to a variety of cryptocurrencies, this is quite limited with regard to some of the other major crypto exchanges.
Bitstamp offers access to over 54 different cryptocurrencies, which include:
- XRP (Ripple)
- Bitcoin Cash
- OMG Network
- USD Coin
These cryptocurrencies can be traded for other cryptocurrencies as well as for fiat currencies like USD, GBP, and EUR through the platform.
Bitstamp Review – Fees
Any trading platform charges two types of fees: trading fees and non-trading fees.
Bitstamp Trading Fees
Trading fees refer to the fees that users pay in order to place orders on the platform and have them executed. Most cryptocurrency exchanges charge trading fees in one of two ways: they either charge spreads or commissions.
Spreads refer to the difference between the bid price and the ask price. This model is primarily adopted by market-maker trading platforms that assume the position of the counterparty in the trade. Therefore, you are effectively trading against the platform.
When this happens, there is usually a difference between the price at which you can buy the asset and the price at which the asset can be sold at any given moment. The buying price, also called the bid price, is almost always higher, and the difference between these two prices is called a spread.
What this effectively means is that if you were to buy and sell an asset at the same time, you would actually incur a loss.
The other form of trading fee that might be charged by an exchange is a flat commission on every trade that you make. This is usually a very small percentage of the trading volume and is done in a decreasing manner, i.e. the higher your trading volume, the lower the fees that you will have to pay in this regard.
Bitstamp Fee Structure
Bitstamp has a straightforward fee structure in the form of a commission-based model, and the fees you pay depend on your 30-day trading volume.
The platform does not charge any spreads, and the fee structure has been given below:
|$0 – $10,000||0.50 percent|
|$10,000 – $20,000||0.25 percent|
|$20,000 – $100,000||0.24 percent|
|$100,000 – $200,000||0.22 percent|
|$200,000 – $400,000||0.20 percent|
|$400,000 – $600,000||0.15 percent|
|$600,000 – $1 million||0.14 percent|
|$1 million – $2 million||0.13 percent|
|$2 million – $4 million||0.12 percent|
|$4 million – $20 million||0.11 percent|
|$20 million – $50 million||0.10 percent|
|$50 million – $100 million||0.07 percent|
|$100 million – $500 million||0.05 percent|
|$500 million – $2 billion||0.03 percent|
|$2 billion – $6 billion||0.01 percent|
|$6 billion – $20 billion||0.005 percent|
|$20 billion and more||0 percent|
Bitstamp Non-Trading Fee
In addition to the trading fee, cryptocurrency platforms often also charge a variety of other incidental fees and charges. These have been discussed in detail below.
Most cryptocurrency exchanges charge fees in order to allow users to deposit money into their accounts.
On Bitstamp, the charges that you will pay for deposits will depend on the method of deposit you choose to use.
If you choose to add funds using your debit card, you will have to pay a fixed fee of $10, however, if you choose to add more than $10,000 to your account, you will be charged a flat fee of 2%.
Similarly, if you choose to deposit funds through a credit card, you will be charged a flat 5% of your deposit amount.
SEPA European Bank Transfers are free, as are cryptocurrency transfers, ACH transfers, and Faster Payments for UK users.
Similar to deposit fees, most cryptocurrency exchanges also charge fees if you wish to withdraw money out of the platform.
When you wish to withdraw money from your Bitstamp account, there is a withdrawal fee associated with it, depending on the method of withdrawal you choose.
Withdrawing funds using debit or credit cards is free and there are no withdrawal fees associated with it.
SEPA Bank withdrawals, as well as wire transfers to a bank account, are charged at 3 Euros and 25 Euros respectively.
Bitstamp Review – Platform Features
There are several features associated with the Bitstamp exchange that make it incredibly popular among cryptocurrency traders. These have been discussed below in detail.
One of the biggest advantages associated with using the Bitstamp platform is that it allows users to trade crypto using fiat currencies such as USD, GBP, and EUR.
Therefore, users can easily convert their fiat currencies to crypto and then back, while paying competitive fees and through a crypto exchange that provides a very high level of liquidity.
Bitstamp happens to be one of the oldest and most well-known crypto exchanges in the world, and they keep expanding their suite of crypto offerings through initial coin offerings and direct listings, which further make them popular with both beginner and advanced users.
The ability to effortlessly convert fiat currencies into crypto is one that is usually not offered by most crypto exchanges and is one that sets Bitstamp apart from its competition.
In an industry as new as the crypto world, regulation becomes extremely important, especially given the high volume of scams and frauds that are often perpetrated in the industry.
Most major crypto platforms are not regulated simply because they do not have a fixed base, and because the laws and regulations of most countries do not allow for the regulation of cryptocurrencies.
However, within all of Europe, Bitstammp was the first fully licensed custodial cryptocurrency exchange, which makes it an attractive option for those who want a safe and secure exchange to park their assets.
Bitstamp has been regulated by the Luxembourg Financial Industry Supervisory Commission (CSSF) and is one of the only exchanges in the world that has this license.
Debit and Credit Card Purchases
The Bitstamp platform also allows users to make credit card purchases and buy cryptocurrencies directly through their credit cards.
Therefore, you can make instant purchases on Bitstamp, without having to rely on more traditional forms of deposits such as bank transfers, which often take a few days to get processed.
With the instant buy feature offered by the Bitstamp mobile app, purchasing cryptocurrencies is as simple as heading over to the asset’s page, selecting the quantity you wish to buy, choosing the debit or credit card you wish to use with the transaction, and clicking on buy.
Your transaction will be executed almost instantaneously. It is important to note that the ability to buy instantly might be limited only to Bitcoin and a few other major cryptocurrencies, though this keeps expanding from time to time.
Low Fees for SEPA
Another advantage associated with the Bitstamp app is its support for a payment method other than credit or debit cards.
For instance, through the Bitstamp platform, European users can easily deposit and withdraw funds directly to their bank account using a SEPA transfer or international wire transfers.
While the wire transfer could be slightly more expensive as compared to the SEPA transfers, we have seen in the Non-Trading fees section of this review that these charges are quite low and competitive compared to the rest of the industry.
Therefore, by providing the option of an easy withdrawal and deposit process through a SEPA or bank transfer, the Bitstamp platform makes it remarkably easy for European users to trade with the platform too.
The Bitstamp mobile app is also very convenient to use and is available on both iOS and Android devices.
Users can download the mobile app, sign in using their account, and then directly begin to trade assets through the mobile interface of the platform.
The mobile app has been designed in a simple and straightforward way that ensures even beginners can use it intuitively.
Through the simple design and interface, Bitstamp wishes to ensure that the trading platform is relevant for people on all ends of the learning curve.
More advanced traders can customize the interface and add any other features that they may require on the platform in order to trade effectively.
Bitstamp Review – Safety Measures
In 2015, Bitstamp was the victim of a hack, wherein it lost over $5 million (19,000 BTC). This was a targeted phishing attack and was one of the most popular cyber attacks on a crypto exchange at the time.
The attack resulted in a massive loss of customer confidence in the Bitstamp platform and caused a lot of users to contemplate shifting their assets to other exchanges.
However, since then, Bitstamp has upgraded its security features to make them industry-grade and ensure that what happened in 2015 will never happen again. Some of the primary security features that the platform uses have been discussed below.
Over 85% of all the crypto assets on the platform are stored offline in cold wallets. Storing them offline ensures that they can not be accessed digitally, and therefore, they are safe from cyber attacks.
As a part of their revamp of the exchange’s security systems after 2015, Bitstamp introduced multi-signature wallets.
These wallets offer an added layer of security to the platform, as they require several private keys before any transaction can be approved. Therefore, this makes it harder for hackers to gain access to someone’s wallet and make crypto transactions sending all the money to themselves.
Since the exchange is regulated by the authorities, it also has to go through an annual audit of its finances and liquidity every year by one of the Big 4 auditing firms.
This audit helps to ensure that the finances and the liquidity of the exchange are stable.
Users of the exchange are encouraged to use two-factor authentication on their accounts, which means that no transactions can be done unless it is also verified using a code that is only available on the Google Authenticator app.
Therefore, this protects the wallet and the account from transactions being made by anyone unless they have access to the device of the user themselves.
Bitstamp Review – Final Verdict
In conclusion, although Bitstamp is one of the most popular trading platforms for cryptocurrencies in Europe, there are a lot of nuances that have to be considered before choosing it as a platform of choice.
For starters, the platform has a very easy-to-use interface and charges competitive fees. They also have very responsive and helpful customer service, alongside support for several different payment methods.
However, there are definite issues associated with the platform too. For starters, they do not have a maker-taker fee schedule, they were hacked in the past, and their cryptocurrency offering is quite limited when compared to some of the other larger crypto exchanges.
Therefore, before making your decision, it is important to carefully consider all these factors.