Image Source: Unsplash
Introduction
Are you interested in entering the exciting world of cryptocurrencies? If so, you'll need to find a trusted crypto exchange to facilitate your trading activities. Cryptocurrency exchanges are platforms that allow traders to buy and sell cryptocurrencies, derivatives, and other crypto-related assets. With the growing popularity of cryptocurrencies, there is now a wide variety of exchanges to choose from, each with its own advantages and features. In this comprehensive guide, we will explore the top crypto exchanges globally, discuss how these exchanges make money, highlight the best exchanges for trading derivatives, and delve into the emerging trend of play-to-earn tokens on exchanges. So, let's dive in and find the perfect crypto exchange to help you achieve your investment goals.
Top Crypto Exchanges Globally
Since the release of the Bitcoin white paper in 2008, crypto exchanges have been striving to make crypto trading legal and accessible to more people. Despite the initial turbulence faced by many exchanges, a few have managed to rise to the top and maintain their position as leaders in the industry.
Binance
One of the most prominent names in the crypto exchanges industry is Binance. Established in 2017, Binance quickly rose to the number one spot in terms of trade volumes, processing over USD 36 billion in trades by the beginning of 2021. The exchange offers a user-friendly interface, a wide range of cryptocurrencies for trading, and competitive fees. Binance has become a go-to choice for both beginner and experienced traders.
Gemini
Gemini, founded in 2014 by the Winklevoss twins, is another major player in the cryptocurrency exchange sphere. With over USD 175 million in trading volume generated, Gemini has solidified its position in the charts. The exchange offers a secure and regulated platform, making it a trusted choice for traders. In addition to its exchange services, Gemini also launched the Gemini Dollar token, adding another dimension to its offerings.
Coinbase
Coinbase, founded in 2012, is the largest exchange by trading volume in the United States and one of the most well-known names in the crypto space. With customers in over 190 countries, Coinbase has established itself as a global leader. The exchange boasts high liquidity, a user-friendly interface, and a wide range of supported cryptocurrencies. Coinbase is a trusted platform for both individual traders and institutional investors.
How Crypto Exchanges Make Money
Now that we've explored some of the top crypto exchanges, let's take a closer look at how these platforms make money. Cryptocurrency exchanges employ various methods to generate revenue, most of which involve fees for processing transactions.
Percentage-Based Fees
One popular method is to charge a percentage-based fee on each trade. This means that the exchange deducts a percentage of the traded value as a fee for facilitating the transaction. The exact percentage fee varies between platforms, so it's important to research and compare fees before selecting an exchange. This fee structure is suitable for traders of all sizes, as it scales with the value of the trade.
Flat-Fee Charges
In addition to percentage-based fees, some exchanges offer flat-fee charges. Instead of being based on the traded value, these charges remain constant for every successful transaction. Flat fees are advantageous for traders dealing with large volumes of cryptocurrency, as the fee does not increase proportionally with the trade value. However, it's essential to consider the specific fee structure and compare it to your trading needs.
Best Crypto Exchanges for Trading Derivatives
As the cryptocurrency market continues to grow, exchanges have started introducing derivative trading options to cater to the evolving needs of traders. Derivatives are financial instruments that derive their value from an underlying asset, such as cryptocurrencies. Let's explore two of the best crypto exchanges for trading derivatives.
Huobi Global
Huobi Global, founded in 2013, is one of the top exchanges for trading derivatives. The platform offers a wide range of derivative products, including options and futures. Huobi Global charges a percentage fee on each trade, with a taker's fee of 0.04%. Despite facing regulatory challenges in China, Huobi has expanded internationally and is now one of the longest-lasting exchanges in the industry. It is a trusted platform for traders looking to delve into the world of crypto derivatives.
FTX
FTX, founded in 2019, is a relatively new player in the crypto derivatives niche. However, it has quickly gained recognition for its innovative approach and comprehensive range of derivative trading options. FTX charges maker and taker fees similar to those of Binance and Huobi. Despite its short operating history, FTX has made significant strides in the industry and is now considered a reputable platform for traders interested in crypto derivatives.
Play-to-Earn Tokens on Exchanges
In recent years, play-to-earn (P2E) games have emerged as a major trend in the crypto space. Unlike traditional gaming models, P2E games allow players to earn income by participating in the game and acquiring in-game assets. One popular P2E game is Axie Infinity, a Pokemon-inspired game where players collect digital pets called Axies. These Axies can be bred and battled against other players, earning players in-game reward tokens called Smooth Love Potion (SLP). Players in countries like the Philippines can cash out their earnings by trading SLP on crypto exchanges that support the token. Binance, for example, is one such exchange where players can trade SLP and convert their virtual earnings into real-world value.
Conclusion
Selecting the best crypto exchange for your investment goals is a crucial step in your cryptocurrency journey. By considering factors such as reputation, fees, supported cryptocurrencies, and trading options, you can find a trusted exchange that aligns with your needs. Whether you're a beginner looking for user-friendly platforms or an experienced trader interested in derivative trading, the crypto exchange market offers a diverse range of options. Remember to conduct thorough research, compare different exchanges, and stay informed about the latest developments in the industry. With the right exchange by your side, you can navigate the exciting world of cryptocurrencies with confidence.