If you’re looking to begin trading or investing in the cryptocurrency world, you might find yourself being quite intimidated by the sheer number of exchanges that are available for the same. Choosing the right exchange is a major but often overlooked part of being a profitable trader/investor. Each exchange is only slightly different in terms of its offerings, fees, and features, however, over the long run this can make quite a difference to your trading methodology.
To make the process of choosing the right exchange easier, we have reviewed several of the major crypto exchanges available in the market and rated them based on the most relevant criteria. This guide is an explainer of that 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
For each of the categories that we have listed, we gathered data from a variety of exchanges and then compared them, thereby forming a metric through which we could then rate the exchanges in each of these individual categories.
Each factor is scored on a 0-10 scale, with 0 being the worst and 10 being the highest rating that the exchange can receive. Every factor is explained in detail below.
Anonymous Live Accounts
All our reviews and data collection is done through live accounts that are made by the reviewers to test out the platform. The brokers are not informed that the account is being made to ensure maximum authenticity, and so that the reviewers can experience the platform in the same way as the customers would.
The fees that you pay for trading on an exchange are perhaps one of the biggest considerations for any trader before deciding on the right platform. While this only has a smaller effect for long-term investors, it becomes all the more important for regular traders who might make several trades in a day, so even a small difference in fees can pile up and become a major distraction.
For our rating process, the fees associated with a platform form 17% of the overall rating that is given to the exchange. Each exchange’s fees were graded on a 0-10 scale, and 3 types of fees were considered for this:
- Trading fees
- Deposit fees
- Withdrawal fees
Trading fees can be charged by exchanges either in the form of commissions or spreads, though most exchanges prefer to charge a combination of the two, with discounts given for higher trading volumes.
While rating the trading fees for the exchange, we looked at the basic trading fees they charged for a regular trading volume based on the average number of trades that a regular trade would make over the course of 30 days.
This included the trading fees across different product classes such as the spot market as well as futures and derivatives.
Additionally, we also looked at whether the exchange had a maker-taker structure, where trades that add liquidity to the market are charged lower fees than trades that take liquidity out of the market.
We also looked at the deposit fees associated with the exchange. This took on two forms:
- The deposit fees charged by the exchange for fiat currency deposits through methods such as credit/debit cards, bank transfers, and electronic wallets such as PayPal and Skrill.
- The deposit fees charged by the exchange for cryptocurrency deposits from an existing external wallet.
Crypto exchanges can also charge fees for the withdrawal of assets from the platform. Similar to the analysis for the deposit fees associated with the platform, we looked at the withdrawal fees associated with both fiat and cryptocurrency withdrawals from the platform.
With the frequency of trading increasing as well as the inherent volatility associated with the cryptocurrency markets, we also looked at whether or not the crypto exchanges had a mobile app that traders could use in order to make trades on the go. This section accounted for 16% of our overall rating, and incorporated 5 different elements:
- App availability
- Customer rating
- Update frequency
- Data privacy
The first question that we looked at was whether or not the exchange had an app that could be downloaded. We considered whether this app was available on both Android and iOS devices, with exchanges that were available across both operating systems getting a higher rating than exchanges that were only available on one OS.
When we determined that the exchange had an app, the next step was to look at the quality of the app, and the most effective way to do this was to look at the customer reviews that the app had received. For Android apps, the average rating received by the app on Google Play was considered, whereas iOS apps were judged based on their App Store ratings.
Whenever a mobile app is launched, it has to be frequently updated to make sure that any bugs or issues with the performance of the app can be fixed easily. Therefore, the frequency of updates becomes a major factor in considering how good an app is.
Therefore, we looked at the update frequency of the apps, and those that were being updated more frequently received a higher rating than those that had very few updates.
Privacy is also a major concern when it comes to mobile apps, and therefore, this was part of our metric while assigning scores to the mobile app of the platform.
The primary consideration in this regard was to look at whether the mobile app tracked the data of the user in order to show them targeted advertisements, and apps that did this received a lower rating than those that had a higher respect for customer privacy.
Lastly, we also looked at how compatible the apps were across different devices – for example, an iOS app might be downloaded on an iPad, iPhone, or an Apple Watch. The same comparisons can also be drawn for Android apps.
Therefore, apps that were compatible with more diverse devices received a higher rating in this regard than apps that were not compatible with as many devices.
Trading Platform Features
This was one of the most extensive parts of the rating process, where we looked at a number of factors with regard to the trading platform itself. The main criterion regarding the trading platform that we looked at included:
- Markets Supported
- Cryptocurrencies Available
- OTC Trading
- Order Types
The first factor that we looked at was the variety of markets that were supported by the exchange. For example, exchanges that had only spot markets scored lower than those that also offered access to crypto derivatives and futures. Exchanges that had even more novel markets such as leveraged tokens scored higher.
Additionally, considerations were made for platforms that offered access to non-crypto markets, such as equities, forex, and commodity markets.
The next consideration was to look at the variety of cryptocurrencies available on the platform, which was easily the single biggest consideration in this regard.
Quite intuitively, exchanges that offered users access to a higher number of cryptocurrencies received a higher score than those that had fewer cryptocurrencies available to trade through the platform.
Liquidity can also be a concern, because if you are trading through an exchange with very low liquidity, then you might face concerns such as:
- Not being able to sell your assets when you want to due to a lack of buyers
- Having to pay very high prices because of a lack of orders in the Order Book.
Therefore, we compared the liquidity associated with different exchanges by looking at the average daily trading volume on the exchange. Exchanges with higher trading volumes received higher scores than those with lower trading volumes.
Another factor that we looked at when rating a trading exchange was whether or not it offered OTC desks for larger orders. The major considerations in this regard were:
- Whether or not the exchange offered OTC trading
- What the minimum order limit for the OTC trading desk was ‘
- The level of competitiveness in the OTC pricing when compared to other exchanges
- Whether a dedicated OTC support representative was provided
The security measures associated with a platform also formed a large part of our rating while looking at the platform features, and the major things that we considered include:
- Whether the exchange had Two-factor authentication for major account changes and withdrawals
- Whether the exchange was insured or not
- Whether the exchange placed a majority of its assets under cold storage
- The history of the exchange when dealing with hacks and breaches
- Whether the exchange had a robust compliance system designed to flag and root out fraudulent activity
The number of order types supported by the platform also formed a major category that we considered because this is a direct factor in determining how suitable the exchange is for advanced investors. Exchanges were given ratings based on whether or not they supported different order types, such as:
- Market order
- Limit order
- Stop order
- Limit-stop order
With the number of scams and frauds in the crypto industry growing, investors and traders are now looking for exchanges that are more secure by virtue of being regulated by any regulatory authority across the world. Therefore, this formed a part of our rating process, accounting for 17% of the total score given to the exchange.
For example, the biggest consideration here was whether the exchange is regulated at all. Exchanges that were regulated received a higher score than those that were not. Furthermore, exchanges that were regulated by multiple authorities worldwide received even higher scores.
Customer support also forms a major part of the rating process, accounting for 17% of the overall rating given to an exchange. There are 4 considerations to be made in this regard:
- Live Chat Service
- Email Support
- Call Support
- FAQ Sections
Live Chat Service
The first thing that we looked at for any platform was whether or not they had a live chat service. For those that did, the next step was to analyze how helpful this service was in solving user queries.
The live chat service is usually the first line of defense for any platform and should be equipped to answer the simplest user queries. Platforms that had a 24X7 live chat service scored higher scores here.
The email support that a platform offers is usually among the most important considerations when it comes to how effective the customer service is, and therefore, it formed a key part of our rating process.
We looked at two factors here:
- The swiftness of the responses, in terms of the average turnaround times that were observed for email queries.
- The helpfulness of the responses, as in, did the responses provide clear solutions to the problems.
Most exchanges do not offer call support, and even those that do only offer it during limited times during the day. Considering the 24X7 nature of the cryptocurrency market, this can be a problem, so the main criterion here was whether or not the exchange had a call support helpline that was available 24X7 to deal with customer queries.
The other considerations here included the waiting times in order to speak to a representative, and the helpfulness of the responses and solutions being provided.
Lastly, we looked at the website itself to see whether it had an FAQ page that answered commonly asked questions in order to aid the support process. Exchanges that had an FAQ page scored higher than those that didn’t.
Additionally, for the exchanges that did have one, we looked at the following factors:
- How extensive the FAQ pages were
- How often they were updated to reflect new common questions
- How easy they were to navigate
Crypto exchanges are usually not limited to a single country or domicile, and they can be accessed by users all over the world. Therefore, it is important for them to support a wide variety of payment methods that users can use in order to add and withdraw funds from the exchange easily. We looked at some of the most commonly used methods and assigned a rating based on whether not the exchange supported this payment method.
The payment methods we considered in this regard were:
- Bank Transfers or Wire Transfers
- Credit or Debit Card Payments
- Cryptocurrency Wallet Transfers
- Electronic Wallet Transfers such as PayPal, Skrill, and Neteller
- International Wire Transfers
Additionally, we also looked at the number of fiat currencies in which the platform supported deposits and withdrawals, and exchanges received higher ratings for supporting more fiat currencies.