A cryptocurrency exchange founded by genuine enthusiasts always inspires a degree of confidence. We'll take a look in our review today at Bitstamp, the brainchild of a software developer and a computer salesman from Slovenia and one of the longest running Bitcoin exchanges.
Back in 2011, European investors were forced to avail themselves of the Japanese Mt Gox exchange to buy bitcoins. The snag was, wiring funds took time and, in a highly volatile market, speed is obviously of the essence.
Damijan Merlak and Nejc Kodri plugged the gap in this market with the creation of this particular digital marketplace. Bitstamp first provided a more expedient option for European users. Following the 2014 implosion of Mt Gox, however, the new crypto exchange started to gain a little more traction and a lot more trade.
These slices of luck often shape the fortunes of crypto coin exchanges.
After shifting to London in 2013, Bitstamp upped the ante with regulation and started complying with Anti-Money Laundering and Know Your Customer requirements. By mid-2016, Bitstamp moved their HQ to Luxembourg where they were able to operate as a licensed payment institution.
This made Bitstamp the first fully regulated European crypto exchange.
With offices in Europe and the US supporting over 50 countries, we'll look today at whether or not Bitstamp makes sense for your virtual currency trading needs.
Now let?s dig into our review and take a look at the nitty gritty details of this digital exchange.
Until the beginning of 2017, Bitstamp was purely an arena for trading in Bitcoin.
You can now also legit use Ethereum although the choice of currencies on the marketplace is restricted to just four in total:
There's a low barrier to entry with a $5 minimum for trading. As we'll investigate later in our review though, proportionally higher fees make dealing in smaller quantities of coins rather unattractive.
You can use either the web-based service or mobile applications for trading on this exchange. You'll even be able to develop your own software for account management if you're that way inclined.
Only two currencies are supported for buying in, USD and Euro.
Bitcoin trading remains the most popular service on this platform since it's carried out as a user-to-user trade. If you want to trade in Ripple, the exchange is unfavorably slanted toward Bit stamp and the fees are higher.
So, if it's BTC you want to trade in, Bitsamp is a legit arena for doing so in large volumes.
Next, we'll take a glimpse at whether or not this platform is safe and legit, something of prime concern to all investors in a market glutted with scams and riddled with insecurity.
Over the past few years, Bitstamp has continued to grow in popularity.
With a solid reputation and a keen eye on security, while some find the identification and verification requirements invasive, for many this is an advantage.
Although, like many exchanges, Bitstamp has suffered from security breaches, the February 2014 DDoS was foiled by Bitstamp suspending withdrawals until it was resolved. A year down the track, Bitstamp was hacked with coins stolen and some private keys compromised. Since users did not lose funds, this has done little to dissuade traders from using this currency exchange.
The nature of crypto platforms means security is more about the way in which incursions are handled rather than expecting them not to happen in the first place. Hacking is sadly part of the territory.
It's always tough to find any consistency in reviews when you're trying to research the best crypto exchange (find others here) but some common threads emerge. In this review we have distilled these into a concise snapshot of the chief pros and cons so you can see at a glance if Bitstam gels with your investment needs:
Now you have a reasonable overview of the services up for grabs on the Bitstamp platform, we'll look at some of the nuts and bolts concerning funding, fees and verification?
Due to the way in which this exhange platform wants itself regulated, ID and verification requirements can seem more burdensome than the procedures in place on more anonymous platforms.
Security comes fully to the fore when you register your account. After completing a simple form, you'll get an email containing your ID and an exchange-generated password. Change this password straight away.
Before you start trading, you'll need to provide your full name, DOB, postal address and phone number. You'll also be required to verify this information by uploading a government-issued ID along with a recent utility bill.
Three days later or so, you'll be ready to start trading.
Although verification has no impact on the amount you can trade, you can?t deposit or withdraw funds with an unverified account so it's a practical necessity to jump through these hoops.
Although buying cryptocoins on Bitstamp is possible with a credit card, think twice about using this method. There's an 8% fee straight off the bat for amounts of $500 or less. This drops to 5% if you spend in excess of $5000.
Withdrawing onto a credit card commands a $10 flat fee for amounts up to $1000. After this threshold, a 2% fee kicks in.
Your credit card company will often treat legit payments as cash advances so think closely before whipping out the plastic.
You?ll also be able to use a debit card if it's issued from the EU-28 or any of the other countries listed here.
You deposit funds onto the exchange using either credit card, debit card or by executing a wire transfer.
This is a significant advantage over the crypto to crypto exchanges where you need virtual currency in place before buying in.
While depositing funds is supposedly free, there are charges involved which we outline below.
Fees are slightly more complicated than on coin exchanges embracing a flat-fee structure, but they are displayed transparently and there are no hidden surprises.
On Bitstamp, fees depend purely on trading volume. Unless you are braced to trade in seriously high quantities of crypto, expect to pay 0.25% in fees when trading unless you breach $20,000 a month in trading. This can come down to 0.10% as you jack up the amount you trade in.
Don?t get too excited, though -- This lower threshold is only in place if you're trading $20 million monthly so it's the preserve of seriously heavy-hitters. For the casual user, trading fees are on the high side of average.
For international wire transfer deposits, there's a 0.05% fee from the site. There's a $7.50 minimum in place. The fees for withdrawal by this same method rise to 0.09% with a $50 minimum. These transactions take anywhere from 2 to 5 days.
Keep your eyes peeled for a list of other fees such as nominal monthly account charges, levies for declined withdrawals and a dormancy fee if you leave your account to stagnate.
One of the prevailing advantages of Bitstamp is the fact it's much easier to navigate than many exchange sites. Whether you're just dipping your toes into the crypto waters or you're an experienced trader, the intuitive interface is a pleasure to use.
For trading, you'll be able to carry out instant orders harnessing the best bid currently available. You can use limit orders as well if you're a more advanced user.
Once you've deposited funds using cryptocoins or fiat currency, buying and selling is a breeze.
Unlike many platforms where executing simple trades can seem impenetrable, it's child's play on this platform.
Click Trade in the main menu and you can choose from Instant Order or Limit Order. The immediacy and simplicity of instant orders is ideal for anyone looking to get straight down to business.
More experienced traders will enjoy the flexibility of choosing the price you want to buy or pay for your cryptocoins
Assuming you want to execute an Instant Order and you have deposited funds to enable this transaction, click Buy or Sell then simply enter the amount of your chosen crypto currency. You?ll be given the chance to confirm this so don't worry if you make a mistake. Buying and selling virtual currency doesn't get much easier!
Advanced trading falls well outside the scope of this basic overview. If you know your stuff then check out Bitstamp's trade view and refer to their handy list of FAQs for further guidance.
As one of the oldest and most respected crypto currency exchanges, Bitstamp is well worth exploring and is a legit place to invest, particularly if you are a trader and you?re looking to deal in more substantial volumes of virtual currency.
While you'll only be able to trade in four coins, the security, simple interface and lower fees for bulk trading continue to attract new customers to the site while ensuring that existing traders continue to use the platform enthusiastically.
If you're still on the fence and looking for comparable alternatives, Coinbase is also suitable for beginners and supports card payments and bank transfers. CEX offers similar facilities and is also a rudimentary platform to use.
In an industry where trust and safety needs to be legit, Bitstamp's reputation and relative long-standing ensures it remains among the go-to options for anyone looking to trade in Bitcoin.