Reading time 16
Best Crypto Exchanges in Canada for July 2023
Despite recent setbacks, cryptocurrencies remain a new asset class that is very popular with investors. In 2022, bitcoin surpassed TikTok, Apple and NFL, and also almost equaled “restaurants near me.”
According to the latest estimates, there were more than 20,000 cryptocurrency projects in the world, and the total number of cryptocurrency users, according to Debthammer, is about 295 million people, and 20% of them are in the United States.
If you are interested in buying cryptocurrencies, you need to open an account on a cryptocurrency exchange. There are about 500 exchanges, and Forbes Advisor has analyzed the leading players to determine the best cryptocurrency exchanges for both beginners and experienced investors.
Compare the Best Crypto Exchanges
Methodology
We conducted an in-depth assessment of the opportunities and options offered by almost 25 cryptocurrency exchanges, cryptocurrency trading applications and brokerage platforms offering the opportunity to trade cryptocurrencies.
The trading fees indicated for each brokerage platform or cryptocurrency exchange represent trading fees for the minimum trading volume when using the most basic version of the platform.
Data on 10 key parameters were used to assess the quality of each platform:
The main trading characteristics
The key indicators were the number of cryptocurrencies available for trading, the number of fiat currencies accepted, the total liquidity of the exchange and trading commissions.
Enhanced trading opportunities
We paid attention to the presence of complex trading functions, such as advanced order types and volume discounts for frequent trades.
Margin trading
Assessment of tariffs for margin trading (if applicable).
Platform availability
Some of the best cryptocurrency exchanges are available everywhere, while others have the availability of various functions varies greatly depending on the country and state of the USA.
Customer service
Available types of customer support.
Educational resources
We have evaluated the educational content offered by each platform.
Cryptocurrency credit card
Some platforms offer credit cards with cryptocurrency rewards.
Security and storage
Types of storage options, available means of protection and insurance, as well as an assessment of large-scale hacks of each exchange during its existence.
Bids and rewards
Some platforms allow users to place bets on selected cryptocurrencies and receive interest payments.
Crypto lending
Some cryptocurrency exchanges allow users to lend their cryptocurrency.
These ten parameters are used to evaluate the capabilities and options of all cryptocurrency exchanges and brokers that participated in our study.
For each rating, the sum of weighted values for all or some of these key factors was calculated, on the basis of which the broker or exchange received its overall rating.
Margin trading, lending on the platform and advanced trading were not taken into account when choosing the best cryptocurrency exchanges for beginners.
What Is a Crypto Exchange and How Does It Work?
A cryptocurrency exchange is a trading platform where you can buy and sell cryptocurrencies such as Bitcoin, ether or Dogecoin.
Cryptocurrency exchanges are similar in many ways to other trading platforms that you may be familiar with.
They provide you with accounts where you can create various types of orders for buying, selling and speculating on the cryptocurrency market.
Some cryptocurrency exchanges support advanced trading opportunities such as margin accounts and futures trading, although they are less available to American users.
Others have features such as crypto stacking or crypto loans that allow you to receive interest on your cryptocurrency assets.
The best exchanges offer educational programs that allow you to be aware of all events related to cryptocurrencies.
Different Types of Crypto Exchanges
In general, there are two categories of cryptocurrency exchanges: centralized and decentralized. Each category has its advantages and disadvantages.
Centralized Exchanges
Centralized cryptocurrency Exchanges (CEX) are managed by one organization. Centralized exchanges simplify the start of cryptocurrency trading by allowing users to convert fiat currency, such as dollars, directly into cryptocurrency. The vast majority of cryptocurrency trading takes place on centralized exchanges.
Some crypto enthusiasts oppose centralized exchanges because they contradict the decentralized principle of cryptocurrencies.
Even worse, according to some cryptocurrency users, is that a company or organization may require users to comply with the “Know Your Customer” (KYC) rules.
These rules require each user to disclose their identity, as when registering a bank account, to combat money laundering and fraud.
There is another problem associated with centralized exchanges: hacker attacks.
In the case of CEX, the exchange stores cryptocurrency traded on its platform – at least in the short term, while transactions are taking place – which increases the risk of asset theft by hackers.
To eliminate this risk, centralized cryptocurrency exchanges have increased the level of security in recent years. In particular, they now store most of their clients’ assets offline and issue insurance policies in case of hacking.
If you like the convenience of a centralized exchange, you can reduce your risk by transferring cryptocurrency to a separate hot or cold wallet outside the exchange.
Decentralized Exchanges
Decentralized cryptocurrency exchanges (DEX) distribute among themselves the responsibility for facilitating and verifying cryptocurrency transactions.
Anyone who wants to join the DEX network can certify transactions, similar to how cryptocurrency blockchains work.
This can help increase accountability and transparency, as well as ensure that the exchange can continue to operate regardless of the state of the company that created it.
The problem is that decentralized exchanges are much less user-friendly, not only in terms of the interface, but also in terms of currency conversion.
For example, decentralized exchanges do not always allow users to deposit dollars and exchange them for cryptocurrency.
This means that you must either already own a cryptocurrency, or use a centralized exchange to receive cryptocurrency, which you then use on DEX.
In addition, you will most likely participate in direct peer-to-peer transactions.
This means that it may take you longer to find those willing to buy what you are selling, and with low liquidity, you may have to make price concessions in order to quickly buy or sell a cryptocurrency with a small volume of sales.
Global Crypto Exchanges
There are about 600 cryptocurrency exchanges in the world that invite investors to trade bitcoins, Ethereum and other digital assets.
However, the cost, quality and safety of their work vary greatly.
Paying special attention to compliance with regulatory requirements, Forbes Digital Assets has compiled a rating of the 60 best cryptocurrency exchanges in the world.
Crypto Exchange Fees
When buying and selling cryptocurrencies, you pay two types of commissions: commission for trading and commission for withdrawal of funds.
Trading Fees
The commission for trading can be charged as a fixed percentage of the amount of cryptocurrency purchased or sold, or the exchange can distinguish between orders that are executed and those that are executed, charging a different percentage for this.
At the basic level, makers are orders that add liquidity to the exchange, that is, they do not execute permanent orders. In turn, the “takers” remove liquidity from the exchange by executing orders awaiting transactions.
Depending on the exchange, the order execution fee is usually slightly lower than the order execution fee, although this is not always the case.
Although ideally it is necessary to choose an exchange with the lowest costs, excessive attention to the specifics of the commission of makers and takers may be unproductive.
This is due to the fact that you cannot choose whether your order will be processed as a “maker” or as a “taker”. Instead, it is better to pay attention to the general commissions and discounts provided for trading a certain volume per month or owning your own cryptocurrency exchange.
Important note: some applications for investing in cryptocurrencies claim zero commission, but this is not entirely true.
Instead of charging a fee right away, they charge a spread – the difference between the purchase and sale rate of a cryptocurrency.
Spreads can be, and often are, much more expensive than if you were paying a percentage trading commission.
Withdrawal Fees
Many exchanges charge a commission for withdrawing coins from their platform. This can be a problem if you prefer to transfer your cryptocurrencies to a reliable third-party wallet or to another exchange.
The withdrawal fee usually varies depending on the cryptocurrency.
If you plan to withdraw your cryptocurrencies from the exchange, you should choose a platform that allows you to withdraw a certain number of coins without commission, for example Gemini.
Other Fees
If you use more complex trading strategies, such as margin trading, then you will have to pay additional fees for attracting borrowed funds. Exchanges aimed at newcomers, such as Coinbase and Gemini, offer quick purchase features, for which increased commissions are charged.
You can avoid them by learning how to buy and sell on the exchange’s trading platform.
If you make purchases using a credit or debit card, the commission may be charged by both the exchange and the issuer of your card.
Therefore, it is best to buy cryptocurrencies for cash or by bank transfer.
How to Choose a Crypto Exchange?
When choosing the best cryptocurrency exchange for your needs, in addition to the commission, take into account factors such as security, trading volumes, educational resources and the presence on the exchange of a list of cryptocurrencies that you are interested in buying.
Security
With the growing popularity and value of cryptocurrencies, they have become a big target for hackers. Leading exchanges such as Binance and KuCoin were hacked, resulting in losses of tens of millions of dollars.
Although exchanges often compensate those whose coins were stolen, no one wants to be in this position.
You can minimize your risk by distributing cryptocurrency purchases across multiple exchanges.
In addition, make it a rule to transfer your cryptocurrency assets from the standard exchange wallet to your own secure “cold” wallet.
Such wallets are not connected to the Internet, so it is almost impossible to hack them, although it is necessary to carefully write down the password, otherwise you may lose access to your cryptocurrencies forever.
Available Coins
Carefully study the cryptocurrencies available on this exchange. Perhaps you will be quite satisfied with a cryptocurrency exchange where only a few coins are traded.
Conversely, if you’re a cryptocurrency fan, you might want to get access to all of the more than 600 coins available on Gate.io.
Educational Resources
If you are just starting to work with cryptocurrencies, look for an easy-to-use platform with a lot of educational resources that will help you understand this complex and rapidly developing market.
Accessibility
Finally, do not assume that the exchange is available in your country or even state just because you can visit its website. The governments of many states and federal states are still figuring out exactly how they want to treat cryptocurrencies from a legal and tax point of view.
FAQ
What is a cryptocurrency exchange?
A cryptocurrency exchange is a platform where you can buy and sell cryptocurrencies such as Bitcoin, Ether or Dogecoin.
How does a cryptocurrency exchange work?
Cryptocurrency exchanges are in many ways similar to brokerage platforms: each of them offers a portal on which you can create different types of orders for buying, selling and speculating with cryptocurrencies together with other users.
Crypto exchanges can be centralized, that is, managed by a single corporate body, like a brokerage company that ensures the security of transactions, or decentralized.
Decentralized exchanges, as a rule, distribute verification powers among everyone who wants to join the network and certify transactions, similar to cryptocurrency blockchains.
This can help to increase accountability and transparency, as well as ensure the continuity of the exchange if something happens to the company managing the exchange.
How to buy cryptocurrency?
To buy cryptocurrency, open an account on a cryptocurrency exchange or with an online broker that allows you to trade cryptocurrency.
In addition, you will need a crypto wallet to store cryptocurrencies, although the exchange can provide it.
Be careful when choosing a cryptocurrency exchange.
Some cryptocurrency trading applications, such as PayPal or Venmo, do not allow you to transfer coins outside the platform. This is a serious limitation for serious crypto investors.
How much money do you need to buy cryptocurrency?
Exchanges have different requirements, often depending on the type of cryptocurrency you want to buy.
You can purchase fractional fractions of coins for pennies or just a few dollars. Be sure to check the requirements of the selected cryptocurrency exchange for the coin you want to buy.
How to open an account on a cryptocurrency exchange?
To open an account on a crypto exchange, visit the exchange’s website or download its application.
Each cryptocurrency exchange has its own unique registration process.
On some of them, you can open an account and buy and sell small amounts of cryptocurrencies without confirming your identity and without providing a lot of confidential information.
However, as the industry has developed, the US government has introduced certain “Know Your Customer” rules to prevent money laundering and fraud.