Over the last 12 months the media and the wider public have been discussing the rapid rise of cryptocurrencies, in particular bitcoin.
Here we will go over the basics of cryptocurrencies while performing an analysis on the major players in the cryptocurrency exchange market. Cryptocurrencies are a digital medium of exchange, that uses cryptography to secure the transactions. These currencies are held electronically online, with bitcoin being the original and most famous cryptocurrency. Bitcoin was conceptualised back in 2009 by a company under the pseudonym ‘Satoshi Nakamoto’.
The cryptocurrency market has come to public attention after the media showcased the huge growth in Bitcoin over the last few months. Since the start of the new year (January first, 2017) Bitcoin has seen its price quadruple. This has seen the evolution of a number of other alternate cryptocurrencies including ethereum, dash, and litecoin. Before we get into any more detail please do note that the cryptocurrency market can be extremely volatile. Only invest money you are prepared to lose, and understand this article is not investment advice. Having said all of that let us look at the best exchanges to invest your money, depending on what you are looking for.
Although the above table can be useful, it is important to understand that each investor will have different priorities and requirements.
Data collected from the official website of each organisation.
There might be features in an exchange that will provide differing levels of value for an individual. Let us take a deeper look at what each of the exchange facilitators provides. eToro, IQ Option, AVA Trade, Coinbase, and Kraken are some of the major players in the Singaporean market. Here is how they stack up against each other.
Each of the Providers Has a Differing Fee Structure. Your best option would depend on your trading style and organisational skills. IQ Option has the best fee structure for most individuals, with an approximate 2% spread with no overnight fees. The only catch is their exorbitant inactivity fees of 50 EUR a month after 90 consecutive days of non-activity. This is easily avoidable though if you are organised and close your account if you no longer wish to use their service. AVA Trade’s fee structure is similar to IQ Option’s, but contains an overnight fee of 0.0694%, which could easily add up if you hold a position long term. This is much the same with eToro and Kraken. Coinbase charges 1.49-3.99% when you buy and sell with them depending on how the transaction is funded.
Coinbase and Etoro Have by Far the Best User Interface. It is clean, logical and well thought out. Being unfamiliar with the platform is not an issue as everything is where you might reasonably expect it. However, this is not to say the other options are bad, with both IQ Option and Kraken’s user interface being perfectly fine to use after a small adjustment period. AVA Trade has an interesting interface as you will either love it or hate it. Those who like the old school early 2000’s look will find it easy to use and will love it, while others will be left longing for a sleeker more modern design. All of these companies have an IOS and Android application, except for Kraken who does not yet have an official Android application.
Screenshot taken from the AVA Trader platform.
Trade More Than Just Cryptocurrencies on the Same Platform. The importance you place on versatility will simply come down to how varied of an investor you are. With Coinbase and Kraken, you are limited to only trading cryptocurrencies, which is not convenient if you like to invest in a wider array of securities. AVA Trade allows you to not only trade six out of the top seven cryptocurrencies by market capitalisation, but everything from stocks through to bonds (forex, commodities, options, ETFs, and indices). IQ Option (stocks, forex, commodities, options, and indices) and eToro (stocks, forex, commodities, indices, and ETFs) allow you to trade a smaller but still versatile range of securities.. Whether you place any weight on these facts purely depends on whether you are interested in diversifying your portfolio with different forms of securities. From this comparison there are two companies that can come out on top. If you are the type of person who likes looking for the best deal value wise, can stay organised and does not mind investing some time to learn a platform, then IQ option is the exchange market for you. If on the other hand you do not hold many positions for a very long period of time, need a greater variety of securities to invest in, and prefer a bit simpler older style layout then AVA Trade could be of more use to you. Nonetheless all the exchanges presented in this article have their advantages and disadvantages. The right platform for you will depend on how much weight you put on the services each company has to offer.
I hope this blog has given you the knowledge to invest somewhere with confidence. Good luck and happy investing.