What are Crypto Exchanges
Just as you would look for a trading platform if you wanted to buy stocks or bonds, if you want to buy, sell or trade cryptocurrencies, you’ll need to find a crypto exchange. While there are some trading platforms, such as Webull that facilitate crypto transactions, many brokerages do not offer crypto trading.
Without a crypto exchange, you would be dealing peer to peer, finding someone who wants to trade at an agreed rate and transferring the coins between crypto wallets. This is not only potentially very complicated, but there is great potential for scams. You could send your money to your trading partner only to find that the agreed crypto never appears in your wallet.
So, a crypto exchange provides a secure way to buy, sell and trade in various cryptocurrencies. These are professional platforms with proper security that you can rely on to make your crypto transactions.
How does a cryptocurrency Exchange Work
Crypto exchanges operate in different ways depending on the type of platform. Most exchanges are centralized, so they are like a brokerage, providing intermediary services between the buyers and sellers.
With this type of platform, you deposit your money into your exchange account to trade for coins, buy crypto or trade one type of crypto for another. There is typically a fee for converting crypto, making a purchase or selling crypto.
To fund your crypto purchases, exchanges typically have a variety of accepted payment methods such as wire transfers, ACH transfers, or even debit and credit card payments. To withdraw your crypto, you can transfer to a wallet of your choice.
The other type of exchange in India is a decentralized exchange. These are blockchain based, so there is no central point of control, as they have servers around the world. This means that even if one location or computer is cyber attacked, the network will keep running.
The key difference between decentralized and centralized exchanges is the fundamentals of how they operate. While a centralized exchange functions as a brokerage, decentralized exchanges are more like a marketplace, allowing peer to peer trading.
How to buy and sell cryptocurrency in India
Now we’ve covered the basics of crypto trading platform options and exchanges, we can delve into the picks for the best crypto exchange India based traders can access.
Best Crypto Exchanges in India: Binance
Binance is one of the leading and best crypto exchanges in India and in the world. It is a global platform that operates in over 180 countries with more than a million transactions per second. Binance India has a wide variety of features that will suit the more advanced crypto trader, such as a P2P marketplace and margin trading. However, newbies may find these features to be a little overwhelming. Binance is also one of the best crypto exchanges in Canada.
However, Binance has anticipated this and included a “Convert” feature on the platform. This allows you to convert the more complex platform into a basic interface. While this removes the complicated functions, you can quickly use it to swap currencies. So, you’ll see a basic screen to swap Indian Rupees to whatever cryptocurrency you want to buy.
Binance trades in over 600 cryptocurrencies, but bear in mind that this is not an Indian crypto exchange. This means there may be limitations on certain currency pairings. However, there is integration with WazirX wallets.
Binance acquired WazirX back in 2019, so you can select the wallet and click on the WazirX pop up to link your account between the two platforms. This will allow you to trade in Indian Rupees, as you can browse the crypto markets and submit the appropriate purchase request. Transfers take place almost immediately, and your crypto will be transferred into your WazirX wallet.
Best Crypto Exchange in India: Kraken
Kraken is one of the go to crypto exchanges in India, but it is also another global platform. It is based in the U.S, so it does need to comply with the stringent U.S regulations. However, this means that you need to be prepared to trade in the US dollar.
One of the advantages of Kraken is that it prioritizes security, and it is considered to be one of the most secure exchanges. The platform is easy to use and has some nice trading features that you may find beneficial as you grow your trading confidence.
For example, the Kraken staking feature, which allows you to earn a percentage on your crypto. You can earn rewards on both your crypto and cash holdings. You can start staking with a couple of clicks and you’ll earn rewards automatically twice a week. If you change your mind, you can unstake instantly with no penalties.
Another advantage of Kraken is its 24/7 Live Chat. Although there are numerous exchanges that claim they offer comprehensive support, it often involves waiting for a response to a submitted ticket. On the other hand, Kraken has round the clock live support that is operated by real people.
Kraken has a premium feel but the trading fees are competitive. Although it may appear a little complicated for newbies, this platform can grow with your trading confidence.
Best Crypto Exchange in India: Gemini
Gemini is another U.S based crypto exchange that has been around since 2014. Like Kraken, Gemini needs to comply with the standard security measures in the U.S. However, Gemini takes it one step further, placing even greater emphasis on security.
There is not only identity verification when you open your account, but two factor authentication each time you log in. Gemini also has free crypto wallet coverage in the form of hot wallet insurance. This provides protection in the event that the platform has a security breach.
Gemini facilitates trading in more than 75 crypto coins, but newbies may find the advanced features a little challenging. However, you can access a Gemini reward card which allows you to pay for certain purchases using your crypto holdings.
Another area where newbies may have difficulties is the fee structure. Gemini has a main trading platform and then an active trader platform. The main platform has fixed amount trading fees, but there is a $200 cap. If you go above this, the fees are an eye watering 1.49%. The active trader platform has a different fee structure. This is ideal for those who are trading more frequently or in larger amounts. The fees are on a sliding scale, so the larger your trading volume, the smaller the fees.
While the fee structure may be a little high for newbies or casual investors, you may be prepared to pay more for the reassurance of Gemini’s robust security.
Best Crypto Exchange in India: Paxful
Paxful is a peer to peer exchange that has been around since 2015. It was developed to provide simplified access to Bitcoin and the list of supported coins has not expanded a great deal since then. Unless you’re interested in the main coins, such as Bitcoin or Ethereum, this is not likely to be the best crypto exchange for you.
This platform is essentially a direct exchange where the buyer and seller can meet and directly transact with each other. As a buyer, you can make a cash deposit via gift card code or prepaid Visa to the seller’s account. The seller will then confirm receipt via the Paxful escrow service. The coins are then released directly to the buyer. Paxful buyers can accept more than 300 payment methods, making it a flexible choice for traders in India and other countries.
Paxful is a great option if you don’t want to share a lot of personal information. You don’t need to create a username or password for the platform, you only need to provide an email address, unless you are trading more than $1,500.
While Paxful is not regulated in India or any of the countries where it operates, the platform does have anti money laundering and Know Your Customer processes to secure the marketplace. The platform generates a new, free crypto wallet for every deposit and withdrawal session, to reduce the chances of cyber attack.
Another attractive aspect of Paxful is its fees. There is a 1% service fee to process withdrawals from the Paxful exchange to your personal account. There are no fees to buy crypto on the platform, but you do still need to consider transactional charges.
Best Crypto Exchange in India: Cex.io
CEX.io is a global exchange available in 99% of countries including India. It has been around since 2013 and enables traders to buy, sell, borrow, and earn crypto. CEX supports over 100 cryptocurrencies, but new crypto coins are added to its list regularly.
There are three tiers to the CEX platform. The “Everyone” tier has an instant buy feature that makes it easy to buy cryptocurrencies with a variety of payment methods. You can also earn crypto or use your crypto holdings as collateral for loans at this level.
The “Traders” level adds margin trading and spot platforms, which will appeal to the more experienced trader. Finally, the “Businesses” tier allows institutions sized buyers to sign up for Prime and access liquidity. They can also use the CEX Direct payment gateway to integrate crypto payments.
CEX has a tiered fee structure that is based on a 30 day trading volume. The higher your trading volume, the lower your fees. If you’re a low volume or new user, the fees are 0.25% and 0.15% for taker and maker fees respectively. As your volume increases, the fees will drop.
How to Find the Best Cryptocurrency Exchange
If you’re still feeling a little overwhelmed about how to find the best cryptocurrency exchange, we have some pointers to help you. It is important to evaluate each potential platform, and there are several factors to consider.
The Supported Currencies
If you’re only interested in trading in the most popular coins such as Bitcoin or Ethereum, there are lots of platforms. However, if you want to trade in smaller coins and alt coins, you will need to look carefully at the list of supported currencies for each platform.
It is important to bear in mind that you’ll be using real money to trade in crypto. While many consider crypto to be a light investment option, you still need to ensure that your assets are protected. Without proper security measures, you could not only lose your funds, but cyber criminals may have access to the financial data from your linked cards or bank accounts.
Unless you’re a computer whizz, you may find the security features on sites to be a little confusing, but there are a few aspects of exchange security that are worthy of note.
Two Factor Authentication: This requires that you not only provide a username and password to log into your account, but also a piece of information that is only known to you. This could take the form of a security question or an SMS code.
Fund Insurance: Crypto exchanges don’t have the financial regulation and protection of banks and financial institutions. However, there are a number of exchanges that offset this with their own fund insurance. Essentially, this means that if there is a platform security breach, the insurance cover will cover your lost funds.
Cold Storage: Deposits on a crypto exchange platform should be stored in cold storage. This means that the funds are stored offline.
Transparency: Finally, be wary of any company that is not transparent about its ownership. The platform should detail where it is headquartered and some basic legal details about the exchange.
Fees can have a massive impact on the profitability of your crypto trading, so it is important to check what fees will apply to your transactions. Trading fees are typically 1% or less, but some platforms have hidden charges that can apply beyond the basic transaction fee.
Most platforms have deposit and withdrawal fees, but these should be reasonable. If you prefer to fund your trades with a credit card, does the platform impose a fee? Is the fee far higher than if you sent a wire transfer? There are a number of platforms that have extremely low trading fees, but you’ll pay a hefty price when you want to withdraw your funds.
It is worth considering your future trading activity and look at platforms that have a sliding fee structure. This means as your trading volume increases, you’ll pay less in fees and charges.
The term “liquidity” is often used in relation to crypto exchanges, but it is actually a very important consideration. When looking for the best crypto exchange, India based traders should look at the liquidity of the platform. Essentially, liquidity refers to the speed and ease of performing trades.
If a platform has low liquidity, there is a risk of price volatility affecting your trades. For example, when the price of a crypto is $500 per coin, you may decide you want to buy. However, if your platform has low liquidity, by the time the trade is actioned, the price may have increased to $550, which is what you will pay. Some platforms have addressed this potential issue with price “lock ins”. This means that the price you pay is the price at the time you placed a buy order, even if there is a delay in settling it.
Bear in mind that liquidity does vary with different trading pairs. For example, the liquidity for Bitcoin may be higher when dealing in US dollars compared to Rupees. So, if you’re not using a crypto exchange in India, be sure to check the specific liquidity.
Ease of Use
Whether you’re a newbie or a more experienced trader, the ease of use will depend on your preferences. As a newbie, you may appreciate a simple interface, while frequent traders will prioritize an intuitive platform that has all the features within easy reach.
You will need to consider what is important to you and what will make trading easier for you. If you have security concerns, you may be prepared to pay slightly higher fees for reassurance of greater security measures. If you prefer anonymity, you may prefer a platform that doesn’t require ID verification.
It is a good idea to check the review websites for listings of potential platforms. This will give you an idea of what previous and existing users have to say. If you see several issues highlighted across multiple reviews, it may be a red flag.
Hopefully, we’ve shown that if you’re looking for the best crypto exchange, India based traders will find lots of options. Each platform may have different features, perks and potential drawbacks. So, be sure to consider what you need from your crypto exchange.
If you're looking for the best crypto exchange outside India, visit our comparison page.
With its WazirX integration, many people consider the best crypto exchange in India to be Binance. However, you’ll need to consider if Binance offers the features and currencies you’re interested in.
WazirX is the most popular crypto exchange app. India users have ranked the app 4.2/5 on both the Apple Store and Google Play.