We are continuing with the series of articles reviewing leading exchanges and their products. In the first part, we had a closer look at eToro, BitMEX, and Bithumb, while here we are reviewing Binance, Coinbase, and OKEx.
Binance is the biggest cryptocurrency exchange by traded volume, according to Coinmarketcap. It reports an almost double monthly traded volume in contrast to the 2nd biggest, which is OKEx. Launched in 2017, the exchange has climbed to the top spot mainly due to the help of the extremely competitive trading fees.
Creating an account with Binance is easy and straightforward. There are two account levels: the first, where no verification is needed and the withdrawal limit is 2 Bitcoins a day, and the second, for which a photo ID is required. After the verification process has been completed, level 2 users are allowed to withdraw up to 100 BTC per day.
Binance has already announced plans to launch a decentralized exchange in 2019. On such platforms, users don’t create accounts or submit withdrawal requests, as trading is realized through blockchain technology.
Their trading platform offers two types of trading: basic and advanced. There is not a great deal of difference between the two, except that the latter offers more comprehensive tools for technical analysis. However, that doesn’t make the basic option very beginner-friendly as it is obviously not designed for those with little to no knowledge of trading.
According to Coinmarketcap, Binance currently offers 389 active markets for trading, out of which 159 are paired with Bitcoin. In addition, the exchange also supports numerous tokens as part of ICO listings. It is regarded as one of the quickest exchanges in terms of listing the new coins on the exchange. The available trading pars are in BTC, BNB, ETH, and USDT.
The funding of the account is available in multiple digital currencies as no fiat currencies are allowed. There is no limit to the amount you can deposit, and no fees are associated with depositing. Bitcoin and Ethereum deposits are usually the most popular options as they offer a certain amount of flexibility in the trading process.
Once you have connected your wallet to the account, it will depend on which currency you are using in the funding process before they reach your account. Similarly to depositing, withdrawals are a simple and straightforward process as well.
Binance charges 0.001 BTC on Bitcoins and 0.01 on ETH withdrawals. When it comes to the fees, the standard fee is 0.1% on each trade that is made. Those who choose to buy the Binance token get a 50% discount on fees, bringing the fee down to 0.05% which is currently unmatched in the exchange industry.
In March 2018, the platform suffered a major hacking attempt. It was an elaborate attempt made to collect users’ login information and withdraw their coins to a hacker’s own wallet. However, it was discovered by the platform and stopped. Still, the attempted hack showed that Binance has still work to do regarding the security of their exchange.
Coinbase is a digital currency exchange and wallet. Founded in 2012, it became the biggest cryptocurrency exchange in 2013 as it received financial backing from the world’s leading investors – Andreesen Horowitz, BBVA, USV, DFJ Growth etc. Today, the exchange operates in 32 countries serving over 12 million customers.
Coinbase offers several products: Pro, Custody, Commerce and Prime. In 2015, the company separated the exchange element of its company and called it GDAX, which was again rebranded in 2018 to Coinbase Pro. All of the company’s users automatically receive a Pro account.
As the name suggests, “Pro” targets more advanced traders, while the regular Coinbase platform is highly beginner-friendly. Although they are operated by the same company, they differ significantly in how they are designed.
Custody is a product designed by Coinbase to store large amounts of cryptocurrencies. As it is looking to attract only larger amounts, it primarily targets institutional clients. Currently, Custody takes care of over $20 billion of crypto assets.
Commerce is another product of Coinbase that allows merchants to accept payments in a variety of digital currencies such as Bitcoin, Bitcoin Cash, Ethereum and Litecoin. Currently, Commerce offers its services to more than 2,000 users.
Prime is a trading platform optimized for institutional traders looking to trade with business funds. In order to separate individuals from institutions, the interested subject submits the interest form, and if approved, receives an invitation to create an account with the Prime.
One of the downsides of using Coinbase is that there are only 6 coins available for trading – Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ethereum Classic, and the ZRX was added to Pro platform a couple of weeks ago.
The platform offers SHIFT Visa Debit Card for its users in certain locations (US), while there are no transaction fees on domestic transactions nor any fees associated with the exchange of Bitcoin to USD.
The platform is operating in 32 countries. The payment methods depend on the country while the Coinbase is one of the very few exchanges that accepts credit card transfers, although higher fees are applied when using this option.
In general, depositing and withdrawals are probably the biggest comparative advantage Coinbase holds over their rivals. Users can choose between withdrawing crypto to their wallet, or in fiat currencies whether through the personal wallet or a bank account. Coinbase is one of the few exchanges that offer withdrawals to Paypal.
The fees also vary by country, but in general, they are between 1.49% to 3.99%, depending on the location and the means of payment. While the depositing is free on Coinbase, the purchases are then commissioned by 1.49%. The Coinbase Pro, on the other hand, offers more competitive fees.
Similarly, transaction limits also depend on the payment method as well as on the level of account verification. A fully verified account can buy up to $50,000 worth of Bitcoin a day, while the limit for Europe-based accounts is $30,000.
Security is another of Coinbase’s strong suits. Users are offered three types of wallets: a standard wallet, a vault, and a multisig vault. Coinbase received widespread criticism for monitoring the spending habits of their users, thus allowing them to ban any transaction they find suspicious.
In general, Coinbase is a practical and easy-to-use exchange and wallets. It has a number of positive sides, such as deposits and withdrawals, while the limited number of available products for trading and monitoring of users’ accounts may hinder the company from having a high number of customers. It is especially recommended to users from the US and Europe due to its withdrawal options.
OKEx is a cryptocurrency exchange that allows users to trade cryptos and fiat-backed tokens. Founded by Start Xu, a Chinese businessman, OKEx has two main branches: the first one mainly focusing on Chinese customers, and the second one which targets users located worldwide with its HQ sitting in Hong Kong.
There is a list of approved and prohibited countries that pops up during the registration process. Assuming you are in an OKEx-approved country, the rest of the process is quite straightforward. There are three verification levels – the limit for the first one is $2,000, while for the second one it is set at $200,000. The third one is $500,000.
According to Coinmarketcap, the exchange has 516 active markets for trading, in trade pairings involving BTC, ETH, BCH, and USDT. OKEx offers a stand-alone desktop platform with the charting options that are better and more useful than some of its competitors. It has the usual setup with options to trade (buy-sell), volume information, order book, charting, etc.
OKEx offers futures trading, probably the hottest feature in its playbook. Currencies available for futures trading are BTC, LTC, ETH, ETC, BCH, XRP, EOS, and BTG. The user is able to choose the delivery date, order type and the leverage in the futures trading option.
In addition to futures trading, OKEx offers token trading, index trading and C2C trading (fiat to cryptocurrency).
OKEx accepts only cryptocurrency deposits. Both the depositing and withdrawing process are easy and straightforward to complete. There are certain withdrawal limits – a maximum of 100 BTC per day can be withdrawn. However, it is possible to increase that limit all the way to 1,000, again depending on the monthly traded volume.
Trading fees are straightforward and simple to understand. The exchange charges a standard 0.1% maker and taker fee for all cryptocurrency trades. As far as the future trading is concerned, the fees vary depending on the currency e.g. BTC fees are at 0.015, LTC 0.025 maker, while a taker fee is at 0.075 etc. OKEx offers certain discounts based on the monthly traded volume.
OKEx applies standard security measures such as cold storage with a portion of funds, secured documents with private keys and Service-oriented architecture (SoA) encryption. So far, there hasn’t been a confirmed major hack yet.
In general, OKEx offers a competitive package that includes a great trading platform, low fees and an extensive range of trading options such as futures, C2C trading, index trading etc. The deposits and withdrawals are not complicated, while the security is at the desired level as well. One of the major criticisms directed at OKEx is the high level of focus on the Chinese market and less on international users.
The verdict – Who wins?
In the first part of this series of reviews, we looked at eToro, BitMEX and BitHumb. One of the conclusions was that all three exchanges are somehow different and cannot be described with the “one size fits all” due to the fact that each of them is consciously targeting a specific user base.
Similarly, all three exchanges reviewed in the second part are somewhat different. Binance and OKEx are champions of traded volume as they hold the first and second position respectively. One of the main reasons they are so popular is the long list of available products for trading. This particularly applies to Binance, which is known to be very open to adding new and up-and-coming tokens to their product list.
Coinbase is different as its focus is more on the professional and institutional traders with products such as Pro, Custody, Commerce, and Prime. Its biggest competitive advantage is accepting fiat currencies and a wide range of deposit and withdrawal options. On the other hand, the US-based exchange has significantly fewer trading products available, especially compared to OKEx and Binance.
Thus, traders should decide based on their priorities. If you are looking for exotic currencies then OKEx and Binance are both good choices. However, if dealing with multiple wallets is a headache for you, then Coinbase is a go-to option as fiat currencies are well incorporated in their modus operandi.
Tags: eToro, Bithumb, BitMEX, Binance, OKEx, Coinbase, Exchange, Pro, Custody, Commerce, Prime, cryptocurrency, volume traded, deposits, withdrawals, trading platform, security