How to Exchange Cryptocurrency – Beginners’ Guide

How to Exchange Cryptocurrency – Beginners' Guide

If you want to trade or exchange cryptocurrency, you need online services. These online services are similar to stockbrokers in that they allow you to purchase and sell digital currencies such as bitcoin, ethereum, and dogecoin. With cheap fees and solid security features, the best crypto exchanges make it simple to purchase and sell your desired currencies.

You cannot simply go out of your bank or an investment agency to buy or sell cryptocurrency. You will need to open an account on a crypto trading platform to swap your US dollars or other money for digital assets once you have decided to purchase Bitcoin, Ethereum, or another cryptocurrency.

This article will guide you on what crypto exchange is, what factors you need to consider while exchanging cryptocurrency, and an overview of some platforms that offer a crypto exchange.

What is Crypto Exchange? 

Crypto exchange is a platform through which one can buy or sell cryptocurrency. One can use the exchange to trade one crypto to convert – for example, bitcoin to litecoin or buy the crypto using regular currency such as US dollars.

The exchange results reflect the current market rates of the cryptocurrency they offer. The users are given leverage to convert cryptocurrency back into UD dollar or any other currency on the exchange, leaving the cash into account or withdrawing to the regular bank account.

What do you need to consider to Exchange Cryptocurrency? 

[1] Accessibility. Your geographical location may block you from buying or sell crypto on certain exchanges due to the regulations of that particular area. Countries like China have banned their citizens from accessing crypto exchanges completely.

There is huge regulatory uncertainty around cryptocurrency in the US, and many states have made their own regulations regarding its exchange. For example, New York needs exchanges for obtaining bitLicence while operating within the state. It only allows few companies to offer certain approved coins.

To protect yourself from regulatory hindrance, it is suggested to find geographic limitation information of crypto exchanges and accessibility factors on the relevant websites or in terms of service section.

[2] Security. Keep in mind that any central institution does not support cryptocurrency. Therefore, cryptocurrency holding is not protected the same way our money is protected in the bank account or traditional investment. Some exchanges like Coinbase and Gemini keep balances in US dollars that you hold with them in FDIC-insured bank account. But still, FDIC insurance is not applicable to cryptocurrency balances.

To provide protection to your crypto, some exchanges have insurance policies for protecting digital currency users hold in the exchange from fraud attempts.

[3] Fees. The fee is another thing to consider. But, don’t let the high fee structure turn off your crypto exchange. The exchange fee might be a fixed price but is often a percentage of your whole trade. Some exchange platforms, such as Cash App, charge fluctuating fees based on price volatility. The fee is charged per transaction and differs where you are buying or selling the crypto.

Moreover, the fees are different depending upon which currency you trade. It is crucial to understand how and when exchange plans for charging your crypto transaction before handing over your money.

Top Cryptocurrency Exchanges & Investing Platforms

[1] Coinbase. It is the most popular and is the best cryptocurrency exchange platform. This is because it allows you to invest directly with UD dollars. Also, you can purchase bitcoin, litecoin, ethereum, and more than 30 other coins and tokens on this platform.  It also offers you to earn interest on USD and exciting tokens and rewards by completing various activities.

  • Pros
  • Easy user interface
  • An intelligent selection of tokens & coins to invest in
  • High security and trustworthiness level


  • Cons
  • High fee unless you are using Pro version
  • Users cannot control private keys in the wallet
  • Bit slower for adopting new cryptocurrencies

[2] Gemini. It is also a popular platform to invest and exchange crypto because of its high security and transparency. Unlike some other exchanges, Gemini is focused on protecting its customers and their data. Gemini is the only crypto exchange platform that provides FDIC-protection on USD deposits. It also supports DOGE.

  • Pros
  • User-friendly app-based interface
  • Available in majority of locations including 50 states of America
  • Provides solid interest rates


  • Cons
  • High fee & pricing structure
  • A bit poor customer support

[3] Kraken. It is among the original crypto trading platforms with a good selection of coins and tokens for trading and investing. It also allows margin trading and is hence famous among many crypto traders. It is an accurate exchange and somehow a bit difficult to use as compared to other crypto platforms.

  • Pros
  • Considered as the longest-running crypto exchange
  • High security and trust level
  • Variety of crypto & tokens for trading


  • Cons
  • Difficult platform to use
  • Bit poor customer service

[4] eToro. It has been fully operational in UK and Europe for a while. It is also allowing crypto trading in the USA, recently. It allows a massive variety of digital assets to buy and sell through this platform.

  • Pros
  • Allows crypto trading, worldwide
  • Low minimum to start


  • Cons
  • Does not support many tokens as compared to other platforms

[5] Bitcoin IRA. This platform is a bit different than other platforms. Unlike others that allow exchanges and wallets, you exchange the currency and pay taxes on your grains. Therefore, the platform stands for being the best crypto wallet and exchange along with IRA. This means your grains inside the account are tax-deferred or tax-free.

  • Pros
  • Allows investing in the cryptocurrency inside IRA
  • Highly secured


  • Cons
  • High fee charges
  • High minimums

Summing Up 

We are dedicated to helping those interested in cryptocurrency investment and exchange to help them make the right decisions. We have provided here unbiased reviews of the top cryptocurrency exchanges for investors of all levels. The structure of cryptocurrency is a bit difficult to understand. We have tried to deliver you reliable, secure, easy ways of crypto exchange and investment.