Trading cryptocurrencies for dummies

A short guide to where you can buy, sell and exchange cryptocurrencies, and the associated costs.

Sites that buy and sell cryptocurrencies directly

On these web sites you can buy cryptocurrencies with a traditional currency, like EUR or USD, directly from site, and vice versa when you sell. The exchange rate is given upfront when you initiate a buy or sell.

These sites tend to charge a really high premium — the difference between the buy and sell rate may be 5% to 10%. Below, all exchange rates are compared to the current rate at Coinmarketcap, when buying or selling in amounts of about 300 EUR.

  • Coinbase has a difference between the buy and sell rate of 15 ~ 20%.
  • BTCX sells Bitcoin for about 10% over the rate, and buys them for about 4% under the rate. It sells Ether for about 4% over the rate, and doesn’t buy it.
  • Safello sells Bitcoin for about 5% over the rate, and buys them for about 8% under the rate. It accepts payments in EUR, GBP, SEK, DKK, NOK, CZK, CHF, and HUF (no USD), and a variety of payment methods. The smallest amount you can buy is 300 EUR, and the smallest you can sell is 0.05 BTC.
  • Bitpanda sells Bitcoin for about 4.5% over the rate, and buys them for about 2% under the rate.
  • CoinCorner only sells and buys Bitcoins, and is based on Isle of Man. You can’t transfer your Bitcoins to/from the site. They charge a deposit fee of 2.5% for all deposits up to €2000.

Exchange markets

Markets where buyers and sellers make offers, and the exchange market matches them. They’re similar to professional stock and commodity exchanges, and require some learning to use.

There is no fixed exchange rate; what price you get depends on what other traders are prepared to offer at any given moment. When you put an order, you specify what price you will accept, and that also affects the chance the order will go through.

The exchange may be between a cryptocurrency and a traditional currency (eg, USD <-> Bitcoin), or between two cryptocurrencies (eg, Bitcoin <-> Ether).

These sites tend to charge a fee for each transaction, typically a fraction of a percent. There may also be fees for transferring your money to/from bank accounts.

  • Bitfinex (0.1% to 0.2% transaction fee for small volumes)
  • GDAX (0.25% to 0.3% transaction fee for small volumes)
  • Bitstamp (0.25% transaction fee for small volumes) has markets for BTC, ETH, BCH, LTC, XRP, USD, EUR, and many others.
  • Kraken (0.16%/0.26% transaction fee for small volumes) har markets for many cryptocurrency pairs, such as BTX, ETH, ETC, BCT, and XRP, as well as EUR and USD. The site was upgraded in 2018, and no longer suffers from performance problems. It also boasts with its flawless security record.
  • Poloniex (0.15%/0.25% transaction fee for small volumes) has markets for a number of cryptocurrency pairs, such as BTC, ETH, ETC, BCH, XRP, XMR, and USDT. However, it doesn’t offer markets with traditional currencies, such as USD or EUR.

Exchange traded certificates

Exchange traded certificates are tied to the price of a commodity, in this case Bitcoin, Ether, Litecoin, etc. You do not buy actual Bitcoins when you buy a Bitcoin certificate, and the certificates cannot be directly exchanged to the virtual currency they represent.

They can, however, be easily traded on exchange markets, just like stocks and bonds. The issuer takes a yearly fee, and the exchange takes a small fee for each transaction, typically a fraction of a percent.

With exchange traded certificates, you take the additional risk the issuer will go bankrupt, besides the risks of the underlying asset.

  • Bitcoin XBT and Ethereum XBT can be traded on Avanza. There may be issues with the issuer.

 

Special

  • ShapeShift exchanges between cryptocurrencies. You make the offer directly to ShapeShift, and are offered an exchange rate upfront.
    I found the fee varies, but typically was around 1% to 5%.
    Shapeshift is also built-in to the Jaxx wallet app.

Disclaimer

Cryptocurrencies are a high-risk investment, and highly speculative. Make sure you know what you’re doing before you start trading in them. Only put a small portion of your savings in high-risk investments.

This information is only provided as a free service, and I can’t guarantee its correctness. It is also subject to change. Check the rates and fees at a service before you make use of it.

This page may be updated and corrected. Check the date for last update.

Tip

If you appreciate this page, please tip at:

Bitcoin Cash (BCH): 139qRoqWR6kiLG6FvUbo2mmJBJ767s6vhw
Litecoin (LTC): LbAZrFdhaDW8s96bQKNqtJvymg1FEHmcaQ
Ethereum (ETH): 0xb9be715217de9beef11f0cf802b61ae345491b55
Bitcoin (BTC/XBT): 13KYNdrLvhAFy7LKgonZVqY1UsNtUVuBhU

 

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