Bitstamp Review (2021)

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Bitstamp Review (2021)

Summary

Founded in 2013, Bitstamp is a recognizable name in the crypto-industry. It currently allows you to trade 40 cryptocurrencies, which includes Bitcoin (BTC), Ethereum (ETH), and more.

Trading fees are on the higher side for a cryptocurrency exchange (up to 0.5%). However, it’s quick, easy, and free for UK residents to deposit GBP using a UK bank transfer (via FPS). You can deposit GBP with a debit card, but there are cheaper places to do this.

Bitstamp launched in 2013 as the main alternative to Mt. Gox in Europe. In 2021, it finds itself comfortably within the top 15 exchanges based on daily spot volume and lists a total of 40 cryptocurrencies – all of which can be purchased using GBP.

If you’re looking for an in-depth review of Bitstamp, the services it offers, and its pros and cons, then look no further – it’s all included below!

Advantages & Disadvantages

Advantages

  • Accepts UK residents.
  • Easy deposit options for GBP (bank transfer and cards).
  • Decent exchange trading fees (max 0.5%).
  • Supports 40 cryptocurrencies in the UK (all with GBP pairs).
  • Has a simple and easy to use mobile application.
  • Fast APIs and a quality trading platform.
  • Provides access to its own Lightning Network node.
  • Ethereum 2.0 (ETH2) can be staked.

Disadvantages

  • Very minimal staking options (only two supported).
  • No lending program.
  • Cost of using a credit or debit card is high (5% fees).
  • Low Trustpilot rating (1.9-star, 400+ reviews).

What Is Bitstamp?

Bitstamp was founded in 2011 by two Slovenian entrepreneurs named Nejc Kodric and Damijan Merlak. In 2013, the pair registered the company in the UK where it operated for three years.

By 2016, Bitstamp became fully licensed in Luxemburg, allowing it to operate as a payment processor in all 28 EU member states. Two years later, the exchange was acquired by NXHM, a Belgium-based European investment firm that manages over £2.5 billion in assets.

As of now, Bitstamp remains one of the most well-known exchanges in operation and currently serves over 3 million users, the majority of which are based in Europe.

While the platform is safe and easy to use, it does lack several features that have become commonplace amongst most top cryptocurrency exchanges.

Where is Bitstamp headquartered?

Bitstamps lists its main location as London, England.

It also has offices in New York and Luxembourg.

Is Bitstamp registered in the UK?

Bitstamp is registered as a company in the UK (see here).

According to the Bitstamp website, “Bitstamp Ltd has been temporarily registered in the UK under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations of 2017 as a cryptoasset business until 31 March 2022, pending the determination of our application by the Financial Conduct Authority.”

Who runs Bitstamp?

Bitstamp is still run by founder and current CEO Nejc Kodric.

Along with Nejc, the exchange employs Edward Kemp as CFO and Executive Director. Before Bitstamp, Kemp served as Senior Financial Officer and Executive Director at JP Morgan Bank Luxembourg.

Other notable names include CTO David Osojnik and COO Vasja Jupan.

What Services Does Bitstamp Offer?

The number of services offered by Bitstamp is limited compared to other exchanges like Binance, Kraken, and KuCoin.

Here’s what you’ll be able to do:

  • Spot Trading
  • Bitstamp Earn
  • ProTrader Interface
  • Bitstamp Mobile App
  • Access to the Bitcoin Lightning Network

Spot Trading

With only 40 coins and 108 markets available, Bitstamp’s spot market is noticeably limited compared to other popular cryptocurrency exchanges. In fact, of all top 15 exchanges, only FTX US currently lists fewer coins.

That said, what is available makes up a decent collection of many popular assets – such as Bitcoin (BTC), Ethereum (ETH), Polygon (MATIC), Ripple (XRP), and others.

While the number of cryptocurrencies listed on Bitstamp is low, all of them can be bought and sold using GBP.

Bitstamp Earn

Like most exchanges, Bitstamp has implemented a staking program allowing users to earn passive income off their crypto holdings. 

Unfortunately, the only two options currently supported are Ethereum 2.0 (ETH2) and Algorand (ALGO). It claims that it’ll be adding more shortly, though.

If you’re looking for more options than this, then you might want to check out Binance or KuCoin. When I checked, both these alternatives also offer a better APY on Algorand (ALGO) than Bitstamp.

Still, it’s worth noting that most exchanges – Binance, KuCoin, and Kraken included – don’t currently offer staking options for Ethereum 2.0 (ETH2).

Can UK residents stake coins on Bitstamp?

Yes, UK residents can stake both Algorand (ALGO) and Ethereum 2.0 (ETH2) on Bitstamp.

Bitstamp Earn isn’t available to US residents at this time, though.

What is PoS?

Proof of Stake (PoS) is a type of blockchain consensus mechanism used for processing and verifying transactions. It’s also relied upon to provide security and decentralization to a blockchain network.

An alternative consensus method is Proof of Work (PoW), which is currently used by Bitcoin (BTC) and Ethereum (ETH).

For a quality overview of how both systems operate, and an easy-to-understand comparison between the two, check out this article.

Although Bitstamp doesn’t charge any direct fees for staking or unstaking assets, it does collect a commission from its nodes and rewards pool. As of now, this commission is set to 15% and is deducted before rewards are distributed to holders.

ProTrader Interface

Bitstamp’s ProTrader interface is built for professional and high-frequency traders. It comes equipped with many of the standard drawing tools, technical indicators, and customizable features one would expect of a trading station.

If you’re familiar with TradingView, then you’ll feel comfortable using Bitstamp’s ProTrader platform – as it utilizes TradingView’s proprietary trading software.

Only instant, market, limit, and stop orders are currently available through this interface. If you’re looking to access more advanced order types – like stop-limit loss and take profit limit – you might want to check out alternatives like FTX, Binance, or Kraken.

Still, Bistamp’s APIs provide users with real-time market data and are considered one of the fastest around. As of now, the platform supports FIX, HTTP, and WebSockets APIs.

What is an API?

An Application Programming Interface (API) can be thought of as a bridge or communication channel between two computers or software programs.

In the context of cryptocurrency trading, an API links a user’s trading account with the exchange’s automated trading system and is the primary mechanism through which buy and sell orders are processed. APIs are also used to run automated trading tools like bots.

WebSockets, FIX, and HTTP are three of the most popular APIs currently in use.

To learn more about APIs and how they can be used on Bitstamp, visit here.

Why are fast APIs important?

It’s not uncommon for trading bots to execute several trades in just a few seconds. While the profit on each individual trade may be low, it can add up when a sizable chunk of transactions are made.

Of course, the price of cryptocurrencies are in constant flux, and if an order is executed too slowly, it might mean that you unexpectedly realise a loss. Because of this, serious traders only use APIs that can deliver market data and execute buy/sell orders at a near-instant rate.

Does Bitstamp support trading bots?

Yes. Through WebSockets, FIX, and HTTP APIs, users can use trading bots.

Even though the ProTrader interface is nicely laid out and easy to read, the higher than average trading fees may make it impractical for high-frequency trading.

On top of this, alternatives like FTX, KuCoin, Binance, and Kraken all offer more advanced trading interfaces, access to more cryptocurrencies, and lower trading fees.

Mobile App

Bitstamp’s mobile app is lightweight and easy to use. 

In fact, the layout is very similar to Coinbase’s mobile app – giving users quick access to their portfolio, markets, and a quick trade function.

Bitcoin Lightning Network on Bitstamp

The Lightning Network is a layer-2 scaling solution that enables Bitcoin to handle millions of transactions per second – all with very low fees.

Bitstamp runs its own set of Lighting Network nodes that users can connect to and use. Participating in these nodes gives people access to instant Bitcoin (BTC) payments with almost no fees.

To read more about the Bitcoin Lightning Network and its implementation on Bitstamp, visit here

What is a layer-2 solution?

Some networks, like Bitcoin and Ethereum, are limited in the number of transactions they can process per second. If lots of people are trying to submit transactions to the network, then it might cost more, and/or take longer, for it to be processed.

A layer-2 solution operates on top of its parent blockchain, to which it is connected via a 2-way communication channel. Layer-2 solutions can process information and transactions much faster and at a fraction of the cost compared to their parent chain.

Once processed, the information is relayed back to the parent’s chain. Popular Layer-2 cryptocurrencies include Bitcoin Lightning and Polygon.

How to Buy Cryptocurrency on Bitstamp

You can buy cryptocurrencies on Bitstamp by making a bank transfer or using a card.

Card Payments

For card payments, all major credit/debit cards are accepted and purchases can be made in GBP, EUR, or USD. All card payments are processed instantly and come with a flat 5% fee.

Daily card purchases are limited to 2500 GBP/USD/EUR while monthly purchases are capped at 20,000 GBP/USD/EUR.

To buy cryptocurrency from the Bitstamp website, go to the deposit section and select the card payment option. From there, simply enter your card details, desired cryptocurrency, and the purchase amount.

To link a credit or debit card, users must complete the KYC process. Those who don’t will be limited to depositing cryptocurrency from an external wallet or exchange.

Can I withdraw funds back to my debit or credit card?

No. Although you can use a debit or credit card to purchase cryptocurrencies on Bitstamp, fiat currency can only be withdrawn via a bank transfer.

If you’re set on withdrawing funds to your debit card or bank account, it’s worth mentioning that Coinbase supports withdrawals through PayPal (which can be directly linked to your debit card/bank account).

To take advantage of this workaround, simply send cryptocurrency from your Bitstamp account to your Coinbase account, sell it, and choose PayPal as the withdrawal option.

You can find out more here.

Bank Transfers

UK residents can deposit GBP for free into their account using a UK bank transfer (via the Faster Payments network).

Some European customers will be able to make deposits using the Instant SEPA service. Those who don’t have access to this service will be limited to traditional SEPA transfers. 

ACH and international wire transfers are also available and can take up to 5 business days to arrive.

To learn more about bank transfers on Bitstamp, visit here.

What is Instant SEPA?

Instant SEPA transfers work like traditional SEPA transfers but, as the name suggests, are significantly faster. As of now, residents of Belgium, Estonia, Finland, Germany, Lithuania, Luxembourg, and Spain can deposit EUR using an Instant SEPA bank transfer on Bitstamp.

Check out this page to learn more about Instant SEPA deposits on Bitstamp.

Supported Cryptocurrencies

Bitstamp currently supports a total of 40 cryptocurrencies

This includes popular cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Chainlink (LINK), Compound (COMP), and more.

Full list of supported cryptocurrencies on Bitstamp
  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Tether (USDT)
  • Ripple (XRP)
  • USD Coin (USDC)
  • Uniswap (UNI)
  • Litecoin (LTC)
  • Chainlink (LINK)
  • Bitcoin Cash (BCH)
  • Algorand (ALGO)
  • Polygon (MATIC)
  • Stellar Lumens (XLM)
  • Axie Infinity (AXS)
  • FTX Token (FTT)
  • Dai (DAI)
  • Hedera (HBAR)
  • Aave (AAVE)
  • The Graph (GRT)
  • Maker (MKR)
  • OMG Network
  • Chilliz (CHZ)
  • Compound (COMP)
  • Sushi Swap (SUSHI)
  • Enjin (ENJ)
  • Yearn.finance (YFI)
  • Curve (CRV)
  • Basic Attention Token (BAT)
  • Paxos Standard (PAX)
  • 0x (ZRX)
  • Uma (UMA)
  • Audius (AUDIO)
  • The Sandbox (SAND)
  • Alpha Finance (ALPHA)
  • StorJ (STORJ)
  • Gemini Dollar (GUSD)
  • Kyber Network (KNC)
  • Euro Tether (EUROT)
  • Ethereum 2 (ETH2)
  • Ethereum 2 Rewards (ETH2R)
What GBP trading pairs are available on Bitstamp?

All cryptocurrencies listed on Bitstamp can be bought and sold using GBP.

However, when trading through the ProTrader interface, only 11 GBP trading pairs are available – two of which are fiat currency pairs:

  • BTC/GBP
  • ETH/GBP
  • XRP/GBP
  • LTC/GBP
  • LINK/GBP
  • XLM/GBP
  • BCH/GBP
  • OMG/GBP
  • PAX/GBP
  • GBP/USD*
  • GBP/EUR*

*Fiat trading pairs

Supported Countries

Bitstamp accepts users from the UK, all members of the European Union, and over 50 other countries/territories.

Check out this page for a full list of the supported regions.

Anyone opening a Bitstamp account from a country/region not included in the list of supported countries won’t be able to conduct card transactions or deposit money with a bank transfer.

Bitstamp Fees

Trading Fees

Starting at 0.50% for both makers and takers, Bitstamp’s trading fees are higher than some other popular cryptocurrency exchanges available to the UK residents (e.g., Kraken). 

However, fees are reduced to 0.25% for those who trade over $10,000 USD within a 30 day period.

Check out this page for a complete overview of trading fees and the volume-based discounts available.

Card Purchase

All card purchases come with a flat 5% fee

When using a credit card, be aware that some providers may classify any purchases made with Bitstamp as a cash advance (which comes with extra charges or interest payments). Some credit card companies will also block transactions on crypto exchanges like Bitstamp.

UK Bank Transfer (via FPS)

All GBP deposits made using a UK bank transfer (via Faster Payments) are accepted free of charge. Withdrawals will cost £2.00 per transaction.

SEPA Transfers

All SEPA deposits (normal and instant) are accepted free of charge. When conducting a withdrawal via the SEPA network, users will be charged €3.00 for the transaction though.

Cryptocurrency Deposits & Withdrawals

As is the standard, all cryptocurrency deposits are accepted free of charge. When withdrawing cryptocurrency to an external exchange or wallet, users can expect to pay a network fee to cover the cost of the transaction.

For some coins, like Bitcoin (BTC) or Ethereum (BTC), this fee can sometimes be higher than you might expect. However, cryptocurrencies like Stellar Lumens (XLM) or Tether (USDT), might cost you next to nothing to withdraw.

Check out this page for a complete overview of the withdrawal fees for each listed cryptocurrency.

Bitstamp Alternatives

Compared to other popular cryptocurrency exchanges, Bitstamp is limited in the services it offers. Depending on what exactly you’re after, there might be better options out there.

For example, if you’re looking to get access to the highest number of cryptocurrencies, then KuCoin or Binance (which list more than 300) might be worth checking out. Serious cryptocurrency traders will also find better support on cryptocurrency exchanges like Kraken or FTX.

When it comes to staking pools and earning programs, both Binance and KuCoin also offer more options for you.

ProviderSupported Cryptocurrencies (UK)GBP Trading Pairs
Bitstamp4040
KuCoin450+1
Binance300+18
Kraken80+37
Coinbase Pro100+42
FTX250+0
Gemini35+2
Bitfinex50+2
Huobi350+32
CEX.IO100+17

Is Bitstamp Safe?

With a 10.2 security rating on CryptoCompare, Bitstamp is considered one of the safer exchanges in operation.

On top of this, Bitstamp is licensed in Europe – which some users may see as being more trustworthy compared to exchanges that are licensed in places like Seychelles or Asia.

Bitstamp did experience a hack in 2015 in which 19,000 Bitcoin (BTC) were stolen. At the time of this hack, the total value of the stolen Bitcoin (BTC) was USD$5 million.

Since then, the exchange has implemented several additional safety features to help keep users accounts safe, including:

  • PGP data encryption: All transactions and data exchanged on Bitstamp are encrypted using PGP encryption.
  • Pin secured mobile device: Bitstamp requires all users to secure their mobile app with a 6-digit pin.
  • Withdrawal address whitelisting: When this feature is enabled, your account will only be able to send cryptocurrencies to addresses you’ve included in your whitelist. To learn more about the security feature, visit here.
  • 2FA verification: In 2017, Bitstamp added a 2FA verification option to help users further secure their accounts. There is also a 2FA verification reset process available in case users lose access to their authenticator application.
  • Ledger Vault technology: Ledger Vault is a leading provider of custodial technology. By using Ledger Vault, Bitstamp can secure its private keys while still maintaining a high level of liquidity on its platform.
  • Intense KYC process: Along with uploading documents and personal/employment information, Bitstamp’s KYC process also includes a short video that has you speak three numbers and move your head based on given instructions.

Final Thoughts: Bitstamp Exchange Review

Despite its limitations, Bitstamp is a quality exchange best suited for individuals who value simplicity and security over anything else. 

Here’s what stood out to me:

  • You can deposit GBP with a UK bank transfer (via Faster Payments) or make a credit/debit card payment.
  • You can buy all of the cryptocurrencies supported by Bitstamp with GBP.
  • For some European users, you can deposit EUR using a SEPA Instant transfer (which should be noticeably faster than a normal SEPA transfer).
  • Bitstamp is one of the few reputable cryptocurrency exchanges that offers an Ethereum 2.0 staking program

Check out the Bitstamp website to learn more!

Bitstamp Website

Thanks for Reading!

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