Selection of some alternative cryptocurrencies

Best Exchanges to Buy Alternative Cryptocurrency

Although Bitcoin (BTC) gets a lot of attention, there are thousands of alternative cryptocurrencies (i.e., ‘altcoins’). The majority of them are absolute junk, but there are some diamonds in the rough which you might want to get your hands on. In this post, I’ve put together an overview of the two most popular cryptocurrency exchanges. I’ve also embedded a quick tutorial which explains how you can find out where any cryptocurrency is available for purchase.

You cannot deposit GBP (or any other fiat currency) on these exchanges – only Bitcoin (BTC) and other non-fiat coins. Read about the cheapest method of buying Bitcoin in the UK here.

Binance

Binance has gone from being unknown and obscure to one of the most popular and well-recommended cryptocurrency exchanges in 2017. On the 28th December 2017, Binance announced that it had more than 3 million users – which was only 8 days after they’d announced that they had signed up more than 2 million users. They have also overtaken Bittrex as the #1 cryptocurrency trading platform (when ranking by 24-hour trading volume), with a recent trading volume of over $5.5 billion. They have previously had to close new user registrations due to overwhelming demand, but they have since re-opened.

Benefits

  • Support a large number of cryptocurrencies (99+)
    • Many of these cryptocurrencies are not listed on other large exchanges.
  • Can register and trade cryptocurrencies without verification (2 BTC 24-hour withdrawal limit).
    • No restrictions on cryptocurrency deposits.
  • Fees are only 0.1% for each trade.
    • Reduced to 0.05% (i.e., 50% off) if you pay fees using Binance Coin (BNB).
  • Can trade Bitcoin (BTC), Ethereum (ETH), USD Tether (USDT), or Binance Coin (BNB) for other cryptocurrencies.

Drawbacks

  • Withdrawal fees are (unnecessarily) high for some cryptocurrencies.
  • Can be intimidating to use for beginners.
  • Couldn’t find much information concerning fund security.

Bittrex

Until quite recently (Q4 2017), Bittrex was the recommended cryptocurrency exchange which offered access to an excellent number of alternative cryptocurrencies with high trading volume. With the increased demand towards the end of 2017, they weren’t able to keep up and have subsequently temporarily suspended new users from signing up.

Benefits

Drawbacks

What if the cryptocurrency I want isn’t listed on Binance or Bittrex?

Not all cryptocurrencies are listed on a single exchange, so you might need to open accounts with more than one. If you’re interested in a specific cryptocurrency, find it on CoinMarketCap (or equivalent) and select ‘Markets’.

What does this tell you?

  1. The name of the exchange.
  2. What other currency you’ll need to trade to get the cryptocurrency. This is usually Bitcoin (BTC), Ethereum (ETH), or Litecoin (LTC).
  3. The volume of trades happening through that specific exchange. By default, the list is ranked by volume.
  4. The fiat currency (e.g., USD, GBP, EUR, etc.,) price of purchasing from that specific exchange.

Market lists are, by default, organised by 24-hour trading volume. In the example above, you could open an account with Poloniex if you don’t have access to Bittrex or use Bittylicious if your priority is convenience (and you don’t mind paying a premium).

Other options

Check out Changelly or Shapeshift. Both offer an equivalent service where you can exchange one cryptocurrency for another without much faff. Changelly allows you to exchange between 83+ currencies, while Shapeshift allows you to exchange between 48+. They’re both quick, simple, and convenient. I’ve not had a problem using these services, but it would be wise to experiment using these options with smaller amounts before trusting them with large cryptocurrency exchanges.

Other popular options:

  • KuCoin
    • Similar to Binance.
    • 197 trading pairs (link)
  • Poloniex
    • Slow verification process at the moment.
    • 99 trading pairs (link)
  • Coss
    • Recently improved UI.
    • 80 trading pairs (link)
  • Kraken
    • Recently upgraded infrastructure.
    • Slow verification process at the moment.
    • 45 trading pairs (link)
  • Bitfinex
    • Minimum $10,000 account balance required.
    • 71 trading pairs (link)

Tracking your trades

Make sure you’re tracking every single transaction and movement you make with cryptocurrency. Not only will this improve the quality of your trades (because you’ll be able to analyse them properly), but also makes determining your tax obligations a shit-ton easier.

I use CoinTracking and 100% recommend it. There is a free version, but the full-featured package is worth the investment. I’ve written an overview of CoinTracking (and listed all the alternatives I know of) in this post.

Last words

When using any cryptocurrency exchange, take these precautions:

  • Use a unique and long password.
  • Immediately enable 2-factor authentication
  • Withdraw the majority of your funds to your own private wallet. I recommend using a Ledger Nano S whenever possible.

Anything to add?

Did I miss something? Or do you have a question? Let me know in the comments below (or tweet me).

2 Comments

  1. Hyperlord 4th January 2018
    • Penguin 5th January 2018

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