Investing in cryptocurrencies, much like in anything else, needs careful consideration and analysis of different options available for you. With growing infrastructure and number of businesses operating in the industry, traders have an abundance of exchange choices. Many of these platforms have similar services but differ greatly in trade features.
This article is concerned with Bitstamp’s attractiveness in terms of fees, deposit methods, purchase limits, verification requirements and trade functions. The review seeks to uncover pros and cons, providing viewers with a fair analysis of the exchange. In addition to the platform’s analysis, the article also compares Bitstamp’s features with other rivals, further flashing out strengths and weaknesses.
General Information about Exchange
Bitstamp is a cryptocurrency online exchange, found by Slovenian entrepreneurs in 2011. The company is registered in the United Kingdom, Luxemburg and United States. Since British government did not take a specific stand towards digital coins, Bitstamp operates as a business in an industry that is unregulated. The firm nevertheless represents a cryptocurrency financial institution that follows anti-money laundering (AML) and counters terrorist financing (CTF) policies.
The exchange also has several key partnerships with financial firms that specialize in financial services, them being Swissquote, Caceis, and Ripple. Apart from web platform, Bitstamp also offers mobile marketplace that is downloadable free for iOS and Android users.
Account Registration and Verification
As with many other digital exchanges, registering an account at Bitstamp does not cost a thing. The process itself is a little bit more complicated than with other platforms but for a good reason. Firstly, when registering an account, you will get a username and password from the Bitstamp’s system.
You should change the password immediately, as hackers can break the generated code very easily in no time. Once you are done with personal details, the platform will demand form you to complete the verification process. Without that done, you cannot purchase or sell coins at Bitstamp.
The verification itself requires all personal details of the trader, as well as a scanned identity document (ID, passport or driver’s license) and proof of address. Thus, the exchange is not a place where you can get coins privately.
There are four cryptocurrencies available for trade at Bitstamp, bitcoins, Ethereum, Litecoin, and Ripple. Together with two fiat currencies, EUR and USD, they form 21 trading pars. This is a neat feature of the platform, providing you with necessary flexibility and choice. Bitstamp wcexas one of the first exchanges that listed Ripple. Nowadays Ripple is added to most exchanges and it´s possible yo buy Ripple with a credit card on Changelly and Cex.io.
Currently, you can deposit funds into your balance using either credit/debit cards and/or bank transfers, expressed in either EUR or USD. Furthermore, the accepted bank account transfers are SEPA and international wires. SEPA is available for European traders only while everyone else uses wire transfers.
It is important to mention that different countries have different options when it comes to funding the Bitstamp account. The limitation on the deposit choices is quite an issue, as many other exchanges have other methods.
Exchange Rate and Fees
The exchange rate of the coins is narrow since buy and sells orders very close to each other. In addition to the rate, transaction fees (organized in maker and taker costs) range from being completely free to 0.25%. Trade costs depend on the value traded on monthly basis, going down with sufficient amount of coins bought and sold.
Now for not so fun part, which is deposit and withdrawal costs. Bank transfers are cheap, charged at 0.5% of the money you wish to transfer or take out of your balance. Compared to Bitfinex, although low, these costs are still a little bit high, as Bitfinex charges 0.1% on deposit and withdrawals. Credit cards, on the other hand, can cost between 5% and 8%, which is very high, especially when compared to CEX.io’s 3.5%.
Bitstamp is considered to be one of the “big four” exchanges in the world, providing one of the best liquidity rates for USD and EUR transactions. Since 2011, the company built its customer base and resources through instant transactions and superior security.
You can use three trade functions when purchasing coins in Bitstamp - instant trading, limit order and stop loss. Instant trading is a regular swap between digital and fiat currencies, conducted at the immediate value of the requested pair. The limit order provides a selection of another price position, where time is given to your order to reach the desired value. Stop loss is similar to limit order except you choose the price at which you have an acceptable loss.
As you can see, Bitstamp geared its trade towards beginners, with the experienced player having little to do on the platform. When compared to Bitfinex and BitMex, Bitstamp has a very limited selection of order types.
Slovenian entrepreneurs, bent on providing easy access of coins to the cryptocurrency public, founded the platform in the year 2011. The headquarters location is London, UK while the firm opened other offices in Luxemburg and USA. Since its establishment, the management compiled audited annual reports regularly, with no hacking incidents recorded so far.
There are four safety features that you should definitely use to protect your funds at Bitstamp, them being two-factor authentication (2FA), email notifications about withdrawals, API FIX tool, and password management.
These tools are funky in many ways, as they add security layers to your account. Other exchanges such as Bitfinex and BitMex offer 2FA and email alerts, while password change policy is left to traders.
Pros and Cons
⬤ the exchange is a safe place to buy and sell coins, with adequate security features available for clients
⬤ 21 currency-trading pairs available
⬤ developed mobile platforms
⬤ the exchange is reachable form almost all regions of the world
⬤ enhanced API tools and scripts at the trader’s disposal
⬤ you have to verify your identity as part of the AML policy
⬤ large fees for credit or debit card purchases
⬤ only a few options available for account balance funding
⬤ order types & functions are very simple and limited in choice
Overall, Bitstamp is a decent choice for beginners who are looking for a place where they can safely learn how to trade coins. Experts would find the site lacking in order types, even though numerous API scripts are available.
Security is not a question but credit card fees are a little too high for our liking. We would definitely recommend this exchange to investors who are new in the industry but not to those who have been in the game for some time now.