A cryptocurrency is an intangible digital asset devoid of a central authority, meaning it is free from government control and manipulation. Bitcoin, launched more than a decade ago, is considered the first cryptocurrency. While Bitcoin remains the preeminent cryptocurrency, there are now more than 4,000 kinds, all of which are known as altcoins.
Those looking to buy or sell cryptocurrencies must do so through one of many crypto exchanges. These function similarly to stockbrokers in that they provide the necessary tools and information to facilitate transactions. Not all crypto exchanges are created equal, however. The following is a look at three of the best exchanges in 2021.
Named the Best Overall Crypto Exchange for 2021 by Investopedia, Coinbase allows users to buy and sell more than 60 cryptocurrencies in a relatively simple manner. It also stands out for its security and pricing transparency. Fees range from $0.99 to $2.99 per transaction, but they are significantly lower on the free Coinbase Pro platform.
First-time crypto buyers are often a little overwhelmed, but Coinbase makes the process simple and has thus far avoided controversy regarding fraudulent coins and other security issues. Moreover, the exchange offers insurance against hacking and data breaches. Other benefits include its easy-to-use interface and the Earn platform, through which users can expand their crypto knowledge and receive cryptocurrency rewards while doing so.
Cash App was named Best for Beginners on Investopedia’s Best Crypto Exchanges of 2021 list. Like Coinbase, it has a simple user interface that makes buying and selling crypto easy for prospective first-time investors. Its peer-to-peer money transfer system is also a more practical platform that, like Venmo, allows users to purchase items at retailers that support Cash App, send money to others, or split bills. It functions like a bank account and allows users to invest in exchange-traded funds and stocks.
While most other exchanges allow transactions involving multiple cryptocurrencies, Cash App only supports Bitcoin. It also charges a fee of 3 percent of the total cost when sending funds via credit card and has daily and weekly withdrawal limits.
A domestic platform affiliated with the global crypto company Binance, this exchange features an easy-to-use platform that allows for transactions of less than $10,000 involving more than 50 cryptocurrencies. More experienced crypto investors can take advantage of additional features including limit, stop-limit, and market trading order types as well as trading dashboards that highlight crucial data like 24-hour highs and trading volume. Binance.US also ranks high regarding cybersecurity. Unfortunately, the platform is still restricted in the following states: Connecticut, New York, Vermont, Hawaii, Idaho, Louisiana, and Texas.