BinaryOptionsNow – As Bitcoin is emerging as the dominant alternative virtual currency on the market, more and more Bitcoin exchanges see the light of the day allowing people to exchange Bitcoins into USD as well as vice-versa. However, the increasing number of service providers makes it difficult for people to decide which one offers the best quality services.
On this page we’ll teach you how to choose the best Bitcoin exchange.
What are Bitcoins?
Bitcoin is a virtual currency that is created by computers all over the world solving complicated algorithmic problems. People can acquire Bitcoins by either using their computers to solve such problems (an extremely demanding and log process) or purchasing them for real money.
Bitcoins can then be used to purchase products or services online much as it’s the case with real money. The advantage of trading with Bitcoins instead of real money is that Bitcoin purchases offer complete anonymity.
In order to buy or sell Bitcoins for real money people will have to register at so-called Bitcoin exchanges. The largest exchanges of this kind are MtGox, BitStamp and BTC-E. We reviewed and compared these exchanges based on multiple factors such as size of liquidity, user interface, trading platform and special features.
Naturally, it’s also possible to trade Bitcoins with the intention of making profits, much like it’s the case with traditional forex trading. Below we’ll also detail which one of these three brokers is suited for casual trading as well as professional trading.
MtGox was the first company to offer Bitcoin/USD exchanges. As such, at this moment it’s also the largest company when it comes to user base as well as liquidity. It’s around 5 times larger than the second largest exchange, which is BitStamp.
MtGox’s user interface is of decent quality however a bit less elegant and professional than the interface used by exchanges that were launched just recently. On the other hand, it’s one of the user-friendliest platforms available.
A great advantage of MtGox over other exchanges is the fact that the services offered by the company are available on mobile devices as well. Due to its very large size, the exchange was recently in the attention of US authorities as well. As a consequence, a few months ago trading activity was suspended. However, right now everything is back to normal and it’s business as usual.
BitStamp is at this moment the second largest Bitcoin exchange when it comes to trader volume as well as liquidity. It’s an exchange that was launched after MtGox and as such the website’s as well as platform’s interface is a bit more elegant and stylish than that of MtGox.
Right now the Bitcoin exchange offers free deposits and withdrawals with a fee of just 0.90 €. Trading fees are as low as just 0.20%. The company also provides interactive graphs that depict the USD/Bitcoin exchange rate over time. While definitely user friendly, the BitStamp platform seems to have been developed having experienced traders in mind.
Naturally, people who just wish to convert their Bitcoins to USD and vice versa are also welcome. Professional traders on the other hand will have the possibility to profit from special feature such as an advanced charting interface, inter exchange and live market quotes.
The last major Bitcoin exchange we want to talk about is BTC-E. BTC-E is the smallest exchange out of these three but the third largest on the market when it comes to trader volumes and liquidity. However, in our opinion it’s the exchange with the least elegant interface and website.
This however is compensated by the extremely large number of special features provided such as the multitude of market indicators, price quotes and more. Unlike most other exchanges, BTC-E also makes it possible for traders to trade Bitcoins with other currencies than just USD, such as EUR.
In our opinion BTC-E is mostly recommended to experienced traders who trade Bitcoins with the intention of making profits, much like they do with other currencies in regular forex trading. Causal traders and people who just want to buy some Bitcoins or exchange their Bitcoins into traditional money should perhaps visit MtGox or BitStamp instead.
All of these three exchanges are in our opinion extremely professional. When deciding which one to choose it all comes down to traders’ intentions and expectations. Below you’ll find a short summary of the three exchanges.
- MtGox – Made for casual and professional traders alike. It’s the oldest company of this kind with the largest liquidity, decent interface and full mobile capabilities.
- BitStamp – Recommended both to professionals and causal traders, however casual traders might prefer it the most due to the extremely simple interface and platform.
- BTC-E – Mostly recommended to professionals who are interested in trading Bitcoins professionally for profits.