best cryptocurrency exchanges

Edit: This list of cryptocurrency exchanges was updated on January 16, 2019 to include new developments.

Welcome to the most comprehensive and detailed guide to the best cryptocurrency exchanges in 2019. Choosing the best cryptocurrency exchange is an important part of your crypto journey. It might be the first place you ever buy bitcoin. Or if you’re a seasoned trader, you might use a bitcoin exchange to trade hundreds of altcoins.

But how do you differentiate between the options? CoinMarketCap lists at least 100 crypto exchanges all over the world, each tracking cryptocurrency prices and each with varying cryptocurrency exchange rates.

Block Explorer took on the challenge of narrowing down the options and compiling as much information as possible to help you decide. First…

What is a cryptocurrency exchange?

In its simplest form, a crypto exchange is a place to buy and sell cryptocurrencies. However, crypto exchanges are not all equal. Some are designed for beginners, while others have complex features for pro traders.

Some exchanges accept fiat currency like dollars and euros, while others only exchange between cryptocurrencies themselves.

Many are actually “brokers.” In other words, you’re buying directly from the exchange company itself. Others facilitate a real peer-to-peer exchange between crypto users.

best cryptocurrency exchanges

How to choose the best cryptocurrency exchange

We began this task with the aim of ranking the best cryptocurrency exchanges. But we quickly realized this wasn’t possible. There isn’t necessarily a “best exchange,” only the best option for you.

While Coinbase might be the top exchange for beginners, it’s not the best option for a pro trader or someone looking to trade lots of altcoins.

And while the Kraken exchange might be the best option for experts, it’s a poor choice for beginners.

Instead, Block Explorer gathered as much (useful) information as possible taking the following points into consideration:

Beginners or advanced? – We’ve split the entire list into two parts: beginner and advanced. The beginner group includes simple exchanges with easy-to-use functionality. There’s little jargon, and setup times are quick. The second group is for intermediates or advanced users. These exchanges are more powerful and have advanced features, but require some knowledge and experience with crypto.

Security – Crypto exchanges are the single biggest target for hackers. $1 billion was hacked and stolen from cryptocurrency exchanges in 2018 alone. We highlight security features like 2FA, cold storage, and encrypted email options.

Hacked? – We also highlight whether an exchange has been hacked and, if so, how they responded to the hack. Did keep it quiet or immediately inform users? This information is essential in deciding whether to trust your money to an exchange.

Number of trading pairs – We highlight the number of trading pairs available on each exchange. For beginners, a small handful of trading pairs is sufficient (to buy or sell bitcoin, for example). Advanced users, however, may wish to trade between various altcoins.

Volume – Volume is the measure of how much cryptocurrency is trading on the platform on a daily basis. It’s a relatively good indicator of reputation and liquidity.

Important note: Research suggests that some cryptocurrency exchanges fake their own volume in a bid to appear bigger. Where appropriate, we have highlighted the known offenders.

Fees – You should always understand the fee structure before trusting an exchange. How much will each trade cost and how are the fees calculated? We outline the fee structure for each exchange.

Without further ado, here are the best cryptocurrency exchanges in 2019 and beyond.

Please note: Block Explorer has no affiliation with the exchanges listed below.

Best Beginner Exchanges

Beginner exchanges are exchanges that offer a simple way to buy bitcoin and other cryptocurrencies, with as little confusing jargon and setup time as possible.

Coinbase

Coinbase

Trading Type Fiat / Crypto
Number of Trading Pairs 4
Hacked before? No
Available Countries 33
Security Features Two Factor Authentication
30d Volume (Fiat) $82,496,871.00
30d Volume (BTC) $82,496,871.00
Fees Flat 0.5% + a fee based on location and amount

Coinbase is the best-known cryptocurrency exchange in the US. It is the simplest and easiest on-ramp for crypto beginners.

The user interface is intuitive, and the design is clean and simple. You can link up your bank account or pay with a card. There’s also a deep library of guides and explainers for newcomers.

Coinbase has a limited choice of cryptocurrency options to keep things simple. However, they considering the addition of more altcoins.

As for security, Coinbase stores 98% of customer funds in cold storage, in safe deposit boxes and vaults around the world, making it relatively secure. The remaining 2% is insured in case of hacks. 

Lastly, there’s a handy mobile app to buy and sell cryptocurrency on the go.

Get started on Coinbase.

ShapeShift

ShapeShift crypto exchange

Trading Type Crypto / Crypto
Trading Pairs 940+ (Total unknown – each crypto can be traded with any other)
Hacked before? Yes, see below for transparency.
Available Countries Available to all countries
Security Features Two Factor Authentication
24h Volume (Fiat) No USD Trade
24h Volume (BTC) 34.12
Fees No fees applied, profit is made similar to how day trading is profitable.

Shapeshift is a crypto only exchange, which means you can’t buy cryptocurrency with dollars or euros. You can only trade between cryptocurrencies. However, due to its simplicity, we still recommend it for beginners. 

ShapeShift allows you to transfer currency between addresses of your choosing, rather than between accounts on its platform. It means ShapeShift doesn’t hold any customer deposits, making it relatively safe. 

ShapeShift has been hacked three times, which all occurred in the same month due to internal sabotage. The exchange was extremely transparent in what happened over the hack, with the CEO going so far as to write a blow-by-blow explanation of what exactly happened.

Get started on ShapeShift.

Gemini

Gemini bitcoin exchange

Trading Type Both Crypto / Crypto and Fiat / Crypto
Trading Pairs 9
Hacked before? No
Available Countries 15
Security Features Two Factor Authentication, withdrawal address whitelisting
30d Volume (Fiat) $19,134,737.00
30d Volume (BTC) 4,887.00
Fees Maker / Taker: Minimum 0.0% / 0.05%, Maximum 1.0% / 1.0%. Calculated on a 30-day rolling window

Gemini was founded by the Winklevoss Twins. It’s a US-based exchange noted for being a licensed platform (Regulated by NYSDFS). Gemini gained headlines earlier this year by announcing full insurance coverage for funds on its exchange and in custody.

Gemini and the Winklevoss Twins pride themselves on being fully compliant and working within existing regulations. As such, there’s a decent amount of safety from fraud and insurance coverage on this exchange. Of course, that comes at a cost: handing over a lot of personal information.

Gemini offers a decent chunk of volume, though few trading pairs compared to other exchanges. Security wise, aside from the standard 2FA, withdrawal address whitelisting is a welcome sight.

The Gemini app is also slick and easy-to-use for beginners.

Get started on Gemini.

Changelly

Changelly bitcoin exchange

Trading Type Both Crypto / Crypto and Crypto / Fiat
Trading Pairs 200+ (Total unknown)
Hacked before? No
Available Countries All countries accepted for Crypto / Crypto trades
Security Features Two Factor Authentication
30d Volume (Fiat) Not Published
30d Volume (BTC) Not Published
Fees Flat 0.5% fee

Changelly is a crypto exchange similar to ShapeShift. It is address-to-address so Changelly never holds your funds.

There’s a simple frontend for buying bitcoin and converting it to whatever cryptocurrency you would like. Much like ShapeShift, changelly transfers happen between addresses you own, rather than between accounts that the exchange controls.

It’s super fast and efficient. There’s a mobile app too for making transactions on the go.

Get started on Changelly.

Luno

Luno buy bitcoin exchange

Trading Type Fiat / Crypto
Trading Pairs 5
Hacked before? No
Available Countries 40
Security Features Two Factor Authentication
30d Volume (Fiat) $3,140,452.00
30d Volume (BTC) 805.06
Fees Maker / Taker. Makers are a flat 0% and takers range from 0.20% to 1.0%

Luno offers a great platform for African and European traders looking to get started. Alongside their exchange, Luno offers a wallet service with a companion mobile app. The exchange has been around since 2013 and has never been hacked, giving it a fairly solid reputation for security.

It’s designed to be as simple as possible, including an “instant buy” feature.

Get started on Luno.

Coinmama

Coinmama bitcoin exchange

Trading Type Fiat / Crypto
Trading Pairs 16
Hacked before? No
Available Countries 226
Security Features Two Factor Authentication
30d Volume (Fiat) Not Published
30d Volume (BTC) Not Published
Fees 5.9% flat fee with an additional 5% for credit card purchases

Coinmama is a good choice for those looking to buy crypto using a credit card or other fiat sources. Coinmama is a broker so you’re buying directly from the company itself which makes transactions fast.

However, there are some things to be aware of. Coinmama is “buy only” so you cannot sell cryptocurrencies on the platform. There is also no wallet feature on the exchange, so you need to withdraw directly to a wallet. This is no bad thing as keeping your funds on an exchange is risky, but you will need a wallet set up first.

Unfortunately, Coinmama’s simplicity is offset by the incredibly high fees charged for every transaction – 5.9% flat fee and an additional 5% for credit card purchases.

Get started on Coinmama.

Best Intermediate-Advanced Crypto Exchanges

Advanced exchanges offer a lot more information and power to the trader. Unlike simpler exchanges that give you a set price, advanced exchanges allow you to control your buy and sell orders. Meaning that you can choose to create orders at whatever price you want.

Some advanced crypto exchanges also offer pro features like margin and leveraged trading. Some allow you to bet against crypto prices by “shorting” an asset, and most have expert charting tools. Most allow you to trade between cryptocurrencies, where many of the beginner exchanges do not.

Binance

binance crypto exchange

Trading Type Crypto / Crypto
Trading Pairs 100+
Hacked before? No
Available Countries Any not on UN sanction lists
Security Features Two Factor Authentication, client-side account freezing
30d Volume (Fiat) $695,837,008.00
30d Volume (BTC) 180,701.00
Fees 0.1% flat fee

Launched in 2017, Binance quickly grew to become one of the largest cryptocurrency exchanges on the planet.

Binance offers hundreds of crypto trading pairs so it’s perfect if you’re looking to get into some of the more obscure altcoins out there. It is crypto-to-crypto only, so you’ll have to load up your account with bitcoin or ethereum to get started; there’s no fiat currency option.

Edit: On January 16th, Binance launched Binance Jersey – a fiat-to-crypto exchange which allows buyers in the UK and Europe to trade with pounds and euros. 

There’s a “basic” exchange mode and an “advanced” mode, although even the basic mode requires some understanding of trading screens and cryptocurrency. Originally based in China, Binance has relocated to Malta after crypto crackdowns in China and Japan.

The 0.1% flat fee makes Binance a very competitive option.

Get started on Binance.

Kraken

Kraken exchange

Trading Type Both Fiat / Crypto and Crypto / Crypto
Trading Pairs 72
Hacked before? No
Available Countries All but 7 countries
Security Features Two Factor Authentication, with the option for an additional recovery factor, PGP based email encryption and verification
30d Volume (Fiat) $92,208,762.00
30d Volume (BTC) 23,568.00
Fees Per currency Maker / Taker, low end around 0.0% / 0.25%

Based in the US and operating in Canada, Kraken is a large scale cryptocurrency exchange that serves almost the entire planet.

The Kraken exchange was recently crowned the most secure cryptocurrency exchange by cyber-security firm Group-IB. Kraken was the only exchange in the report’s top-tier group, essentially putting it in a security league of its own.

The report cited Kraken’s proof of reserves audits, private key storage, protection of customer data, and technical security details as key reasons for the ranking.

Among Kraken’s security features is the ability to have a second 2FA set up for account recovery, and the ability to use PGP to encrypt and verify email communication.

In terms of trading, Kraken offers 72 trading pairs and leveraged margin trading on bitcoin.

Get started on Kraken.

Coinbase Pro

CoinbasePro crypto exchange

Trading Type Both Fiat / Crypto and Crypto / Crypto
Trading Pairs 25
Hacked before? No
Available Countries 31
Security Features Two Factor Authentication
30d Volume (Fiat) $93,599,262.00
30d Volume (BTC) 23,904.00
Fees Maker / Taker based on the last 30 days in a rolling window. Maker fee is always 0%, taker goes from 0.30% to 0.10%

Coinbase Pro is Coinbase’s bigger (but younger) sibling. It was recently known as GDAX until it changed to Coinbase Pro. The platform offers some very competitive low-end fees, meaning that if you expect to move a lot of crypto they are a good choice.

It comes with all the reputational clout of Coinbase, with its FDIC insurance and regulatory checklist. Coinbase Pro also features additional trading pairs not currently available on the basic Coinbase platform.

Coins like Golem (GNT), Decentraland (MANA), 0x (ZRX), and Basic Attention Token (BAT) are all available on Coinbase Pro, but not Coinbase.

Get started on Coinbase Pro.

Poloniex

Poloniex cryptocurrency exchange

Trading Type Both Crypto / Crypto and Fiat / Crypto
Trading Pairs 116
Hacked before? Yes, see below
Available Countries All but three countries and a few US states
Security Features Two Factor Authentication
30d Volume (Fiat) $27,719,009.00
30d Volume (BTC) 7,764.00
Fees Maker / Taker. Minimum 0.0% / 0.1%, Maximum 0.1%, 0.2%

Poloniex is a relatively large cryptocurrency exchange based in the USA. Poloniex offers a pretty large amount of volume on its platform and backs it up with competitive fees. A good choice for any trader looking to move mid-to-large amounts of crypto.

Poloniex’s backend has been hacked once. After it happened the then-CEO was transparent, and promised that Poloniex would cover any losses, and discussed exactly how the hack took place.

The vast majority of funds are kept in “air-gapped cold storage” and suspicious activity is monitored closely.

As for trading, Poloniex offers one of the most advanced suite of trading tools and technical indicators. It was the first exchange to offer pre-fork trading on the two Bitcoin Cash protocols, providing a crucial gauge of investor support.

Get started on Poloniex.

Bittrex

Bittrex cryptocurrency exchange

Trading Type Both Crypto / Crypto and Fiat / Crypto
Trading Pairs 288
Hacked before? No
Available Countries Almost all
Security Features Two Factor Authentication, IP and cryptocurrency address whitelisting, and client-side account freezing
30d Volume (Fiat) $42,818,083.00
30d Volume (BTC) 11,080.00
Fees 0.25% flat fee on all trades

Bittrex is a crypto exchange with decent volume, a good number of trading pairs, and above average security options. Specifically, the ability to whitelist IPs that can access your account and addresses you can withdraw to is very handy.

The exchange has never been hacked, which is the least you should expect from an exchange founded by three cybersecurity engineers! The vast majority of funds are stored in safe cold storage wallets.

Bittrex is designed for experienced traders, built with a scalable trading engine which executes orders in seconds. The flat 0.25% fee means you always know where you stand, too.

Get started on Bittrex.

Bitfinex

Bitfinex cryptocurrency exchange

Trading Type Both Crypto / Crypto and Fiat / Crypto
Trading Pairs 100
Hacked before? Yes – Not that much response from Bitfinex
Security Features Almost all, none that are listed on UN sanctions
Available Security Two Factor Authentication or Universal Second Factor (Yubikey or similar), IP whitelist for accounts, PGP encrypted email
30d Volume (Fiat) 311
30d Volume (BTC) $311,032,908.00
Fees Maker / Taker based on your last 30 days volume. Maximum 0.1% / 0.2%, Minimum 0.0% / 0.055%

Bitfinex is a Hong Kong-based cryptocurrency exchange with expert-level features like spot trading and leveraged margin trading. You can leverage up to 3.3x (effectively borrowing money to increase your position). 

The charts on Bitfinex are particularly great, allowing to set your own patterns and set price alerts. The exchange also has high liquidity and large volume, meaning you can buy and sell without lag time.

Bitfinex was hacked in 2016 with $72 million worth of bitcoin stolen, but the exchange now has above-average security options. Specifically, the inclusion of U2F and PGP encryption for email is a welcome sight.

One thing we should note is that Bitfinex has been accused of artificially pumping bitcoin prices during the 2017 bull run.

Get started on Bitfinex.

Bitstamp

Bitstamp bitcoin exchange

Trading Type Both, though mostly Fiat / Crypto
Trading Pairs 14
Hacked before? Yes, employees’ credentials compromised. Bitstamp released an incident report, but it is no longer available.
Available Countries 56 for MasterCard transactions, no information otherwise.
Security Features Two Factor Authentication, a PGP key is offered for email encryption and email-based withdrawal confirmations.
30d Volume (Fiat) $93,538,791.00
30d Volume (BTC) 24,205.00
Fees Based on your last 30-day volume in USD. Ranges from 0.25% to 0.10%

Bitstamp started out in a garage, with $1,000 and two laptops in 2011. Fast forward to today, and it’s one of the largest cryptocurrency exchanges in the world.

Based in London, it’s an ideal option for British crypto traders. Bitstamp was one of the first fully-licensed digital cryptocurrency exchanges. That didn’t stop hackers in 2015 stealing $5 million from the exchange. The company did release an incident report to explain the situation, but it is no longer available.

Since then, it has implemented some strong security features. Namely, PGP encrypted communication and email based withdrawal confirmations stand out here. PGP is a must to verify the identity of who you are communicating with.

Get started on Bistamp.

Bithumb

bithumb cryptocurrency exchange

Trading Type Fiat / Crypto (specifically Korean won)
Trading Pairs 66
Hacked before? Yes
Available Countries All countries, though still only in KRW
Security Features Two Factor Authentication
30d Volume (Fiat) $1,419,838,544.00
30d Volume (BTC) 367.00
Fees Flat 0.15% fee

Caution: A recent report found evidence of wash trading on Bithumb – a manipulative practice to exaggerate its volume figures.

According to CoinMarketCap, Bithumb is the largest exchange by reported volume (at the time of writing). But there’s a catch – the only fiat option available is Korean won (KRW).  

Bithumb is open to all countries, but traders without a connection to South Korea will struggle to trade, as it is notoriously difficult to buy and sell KRW for other fiat currencies. Though this does leave an opening to buy KRW with crypto, assuming you have the crypto-side capital for it.

Bithumb has been hacked at least twice – first in June 2017 hitting 3% of all Bithumb users. And secondly, in June 2018, when $31 million was stolen from the exchange.

Get started on Bithumb.

CEX.io

Cex.io bitcoin exchange

Trading Type Both Crypto / Crypto and Crypto / Fiat
Trading Pairs 28
Hacked before? No
Available Countries All countries aside from 24 small countries and 27 States
Security Features Two Factor Authentication
30d Volume (Fiat) $7,056,167.00
30d Volume (BTC) 1,827.00
Fees Maker / Taker based on your last 30 days volume in BTC. Maximum fee of 0.16% / 0.25%, minimum fee of 0.0% / 0.1%

CEX.io is a UK based cryptocurrency exchange that sports a low but respectable volume and very competitive fees.

It offers an impressive dashboard for expert traders with margin trading, order-matching algorithms, and high-frequency trading for scalp traders.

It’s a good choice assuming what you are looking to trade is available in their somewhat small pool of trading pairs. 

Get started on CEX.io.

Bitpanda

bitpanda crypto exchange

Trading Type Fiat / Crypto
Trading Pairs 80
Hacked before? No
Available Countries All for buy / sell via Neteller, otherwise EU only
Security Features Two Factor Authentication, email confirmation for most account actions
30d Volume (Fiat) Not Reported
30d Volume (BTC) Not Reported
Fees Change often – Between 1% and 3%

Bitpanda is an Austrian cryptocurrency exchange and one of the most accessible options for traders in Europe. Bitpanda acts as a broker, meaning you’re purchasing the cryptocurrency from Bitpanda itself, rather than exchanging it with other users.

Bitpanda accepts euros, British pounds, Swiss francs, and US dollars and offers a decent array of cryptocurrencies. It has a slick user interface that is welcoming and relatively intuitive for users.

The only downside here is that their fees are somewhat high and they don’t report volume.

Get started on Bitpanda.

Coinsquare

Coinsquare crypto exchange

Trading Type Fiat / Crypto (Specifically CAD)
Trading Pairs 9
Hacked before? No
Available Countries 1 – Canada only
Security Features Two Factor Authentication
30d Volume (Fiat) $7,058,585.00
30d Volume (BTC) 1,804.00
Fees Flat fee for makers and takers, 0.10% and 0.20% respectively

Coinsquare is the largest cryptocurrency exchange in Canada, built to cater directly to Canadian traders, meaning that external traders will find themselves falling flat. Security, however, is a high priority. Coinsquare has never been hacked and 95% of all funds are held in cold storage. 

Its trading functionality is somewhat basic, so experts will probably look elsewhere for superior features. 

Get started on Coinsquare.

HitBTC

HitBTC cryptocurrency exchange

Trading Type Crypto / Crypto
Trading Pairs 803
Hacked before? No
Available Countries Almost all
Security Features Two Factor Authentication
30d Volume (Fiat) $222,941,259.00
30d Volume (BTC) 57,732.00
Fees Flat Maker / Taker fee structure: -0.01% / 0.1%

Caution: A recent report found some evidence of wash trading on HitBTC – a manipulative practice to exaggerate its volume figures. If correct, only 25% of reported trading volume on HitBTC is real.

HitBTC is a Chile-based cryptocurrency exchange that calls itself “the most advanced bitcoin exchange.” HitBTC offers incredibly competitive fees, a high amount of volume, and a good number of trading pairs. 

Unlike most other cryptocurrency exchanges, HitBTC offers a rebate for makers in their fee structure, meaning that makers receive 0.01% of the trade amount as a credit when a trade is made.

In terms of security, HitBTC offers 2-factor authentication, encryption technology, and cold storage. A 24-hour support team is also a nice touch.

However, the reports of manipulative wash trading should be taken into account before trading here.

Get started on HitBTC.

OKEx

OXEx crypto exchange

Trading Type Crypto / Crypto
Trading Pairs 412
Hacked before? No
Available Countries Accepts all countries
Security Features Two Factor Authentication
30d Volume (Fiat) $567,722,732.00
30d Volume (BTC) 146,920.00
Fees Complex Maker / Taker scheme

Caution: A recent report found evidence of wash trading on OKEx – a manipulative practice to exaggerate its volume figures. If correct, only 11% of reported trading volume on OXEx is real.

OKEx is a Hong Kong-based cryptocurrency exchange that offers a massive number of trading pairs with an equally large amount of liquidity to back it up.

OKEx was rated Crypto Exchange of the Year at last year’s Malta Blockchain Awards.

However, in a recent investigation, OKEx was considered “completely uninsurable” and ranked in the lowest bracket for security. Additionally, OKEx was singled out for manipulating its volume. A recent report found evidence of wash trading on at least 30 of its trading pairs.

Another downside here is a complex fee structure.

Get started on OKEx.

Conclusion

There are lots of factors to consider when picking the right crypto exchange: ease of use, security features, reputation, trading pairs and trading tools. Remember, when signing up to an exchange, you are trusting them with your funds. Always do your due diligence before you transfer any money.

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People love to compare the bitcoin crash to the dot-com bubble.

I get it. It makes a good headline. At the end of 2018, Bloomberg, CNBC, and Fortune were quick to print stories like this:

The Crypto Crash of 2018 Is Now Worse Than the Dotcom Bust

Crypto’s 80% Plunge Is Now Worse Than the Dot-Com Crash

Bitcoin is unfolding like the dot-com crash, just 15 times faster

If you look at bitcoin’s run-up in 2017, it does look worse than the dot-com bubble.

bitcoin vs dot com bubble chart
Source: WSJ

But these charts ignore one crucial thing:

The dot-com bubble was EIGHT times bigger than crypto

We’ll start with market capitalization.

The market cap of the NASDAQ Composite Index (which tracks tech stocks) during the peak of the dot-com boom was $6.7 trillion.

The crypto market cap at its peak was $828 billion.

In other words, the dot-com bubble was eight times bigger than crypto.

crypto market cap vs nasdaq market cap

The absence of Wall Street

The second big difference between the dot-com bubble and the crypto bubble is a complete absence of institutional traders.

Almost no-one on Wall Street was trading bitcoin in 2017. Most family investment offices and hedge funds didn’t hold crypto either.

Whether it’s a good thing or a bad thing, the “big money” hasn’t come to crypto yet. The two bubbles are completely incomparable when the investor base is so widely different.

Bitcoin was a bubble…

Don’t get me wrong. The bitcoin spike in 2017 was a bubble. A big one.

It had all the hallmarks of a big financial bubble: mania, greed, delusion, and capitulation. And the 80% drop is painful.

But if we’re going to put this in context with historic bubbles, let’s use a relative scale, not percentage drops. 

Bitcoin’s “dot-com moment” may yet be still to come

Bitcoin’s “dot-com moment” won’t happen until we see much bigger volumes of money flowing into it.

This infrastructure is building… Nasdaq and NYSE are launching on-ramps for crypto. A bitcoin ETF may be on the horizon. Institutional-grade custody is coming.

Only when these things are in place will we see the kind of money required for a “dot-com” level run-up.

And if that happens, the fall will be truly enormous when it bursts.

A version of this article appeared in our exclusive newsletter. If you’d like Block Explorer’s cutting-edge analysis in your inbox every Tuesday, sign up now.

Bitcoin whales

Bitcoin has been lauded as the “answer to income equality” and “the dawn of the single greatest wealth transfer in history.”

It’s not.

The vast majority of bitcoin in circulation is owned by a tiny elite. Just like the vast majority of global money is owned by the 1%.

It’s time to reassess the idea that bitcoin is a model for redistribution of wealth and equality.

The 1% own 87% of Bitcoin Supply

According to research published in China’s National Business Daily, almost 90% of circulating bitcoin supply is held in just 0.7% of wallets.

The huge concentration of crypto wealth can probably be attributed to cryptocurrency exchanges like Coinbase and Binance. Crypto exchanges hold funds in their wallets on behalf of its users, so that wallet may represent thousands of crypto users.

In terms of monetary value, the 0.7% of wallets control $62 billion in bitcoin (correct on January 7th).

Limited Bitcoin Supply

The research also revealed that 97% of crypto wallets held less than one bitcoin.

The limited bitcoin supply (only 21 million bitcoin will ever be created) means that only a fraction of people on earth can own a full bitcoin. As Jameson Lopp pointed out, there aren’t even enough bitcoins for each Coinbase user.

To become part of the bitcoin 1%, you need only a modest 0.28 BTC, according to one estimate. And that’s before you consider lost and stolen coins.

While bitcoin is a model for economic freedom, it is unlikely to alter existing wealth structures. The 1% will still hold the vast majority of money supply, whether it’s fiat or digital.

Further reading: Who are the Bitcoin Whales? (Criminals, Traders, and Early Adopters)

Gemini insurance

In a recent Reddit Ask Me Anything (AMA) session, Cameron and Tyler Winklevoss, the identical twin founders of crypto exchange Gemini, maintained their optimistic stance on bitcoin.

In one exchange, Tyler Winklevoss claimed that bitcoin’s market capitalization would surpass gold:

“Our thesis around bitcoin’s upside remains unchanged. We believe bitcoin is better at being gold than gold. If we’re right, then over time the market cap of bitcoin will surpass the ~7trillion dollar market cap of gold.”

Bitcoin’s market cap is currently at $71 billion, a far cry from gold’s $7 trillion.

“Crypto Needs Rules”

The Reddit AMA comes a week after Gemini launched a controversial new marketing campaign. Gemini posters erected near Wall Street in New York declared that “crypto needs rules.”

Further adverts in the New York Times claimed “the revolution needs rules” and promoted “crypto without chaos.”

It’s a controversial position among many in the cryptocurrency community who resent the presence of regulators in the space.

Since the launch of the Gemini exchange, the Winklevoss twins have operated within strict regulations and licenses. As Chris Roan, head of marketing at Gemini told the Wall Street Journal, “We believe that investors coming into cryptocurrency deserve the exact same protections as investors in more traditional markets.”

Committed to Bitcoin ETF

In the Reddit AMA, the Winklevoss twins also doubled down on their goal to launch a bitcoin exchange-traded fund (ETF). Cameron Winklevoss said, “We are committed as ever to making an ETF a reality!”

He also outlined some of the Securities and Exchange Commission’s concerns and how Gemini would work to satisfy them. This includes the addition of a Nasdaq-style market surveillance system.

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bitcoin price 2018

2018 was a brutal year for the bitcoin price. Shortly after hitting an all-time high, the crypto bubble popped. Over the following twelve months, the bitcoin price slowly bled out to end the year on a low note.

Bitcoin began 2018 at $13,464 and ended the year at $3,742 – a 72% loss in value.

The total cryptocurrency market capitalization fell from $626.6 billion to $125.6 billion – an 80% drop.

Bitcoin price chart 2018
Bitcoin price chart 2018. Source: CoinMarketCap

How did bitcoin lose 72% in price?

To understand the phenomenal fall in price, we must go back to 2017 – a year of irrational exuberance and hype in the crypto space. Bitcoin became a mainstream talking point and hundreds of new cryptocurrencies emerged. “Initial coin offerings” promised easy returns.

But the mania quickly turned into anguish. As millions flooded to cryptocurrency, Bitcoin came up against severe scaling issues, hindering its adoption as a currency alternative.

And the reality of ICOs was laid bare. Most projects couldn’t possibly deliver on their wild promises. Many were nothing more than scams designed to part investors with their cash.

The subesequent 72% price crash in 2018 was the dose of reality.

Bitcoin price fall triggers layoffs across the industry

As the year progressed, blockchain and cryptocurrency firms began to announce layoffs. Many of these companies had raised money in crypto so the dramatic price falls tore away at their operating funds.

ConsenSys, a company that supports new projects on the Ethereum blockchain, announced a 50-60% staff cull. Steemit, a blogging platform powered by cryptocurrency, shed 70% of its staff.

In more high-profile layoffs, Bitmain -the world’s largest bitcoin mining company – is reportedly downsizing with up to 50% of staff members at risk. And cryptocurrency exchange Huobi is streamlining its team, although exact numbers are yet to be revealed.

This is the harsh reality of “crypto-winter.”

$1 billion crypto hacks

The discussion of cryptocurrency security reared its head again after the biggest exchange hack in history took place in January 2018. Coincheck was hacked to the tune of $532.6 million with further hacks at Bitgrail and Bithumb through the year.

The constant hacks weakened trust in the crypto exchange ecosystem and put further selling pressure on the bitcoin price.

Some progress is being made with a landmark move into crypto insurance from the Winklevoss Twins. All funds on their Gemini exchange and custody service are now fully insured.

Even traditional players are stepping into the ring as Fidelity announced a crypto custody service. Expect secure custody services, aka bitcoin banks, to develop at pace in 2019.

Bitcoin hits a regulatory brick wall

Cryptocurrency regulation continued to hinder progress throughout 2018.

The US Securities and Exchange Commission (SEC) took action against numerous ICOs. The SEC chairman concluded that “every ICO I’ve seen is a security,” which means stricter investor rules should be applied.

China maintained its ban on cryptocurrency exchanges, while South Korea authorities raided exchanges on suspicion of money laundering and tax evasion.

Most notably, the SEC rejected or pushed back at least nine bitcoin exchange-traded funds (ETFs). The inevitable launch of a bitcoin ETF is often cited as a major catalyst for the bitcoin price, but the continuous delays weighed on crypto prices throughout 2018.

Any good news for the bitcoin price?

There are plenty of potential price triggers to look forward to in 2019. The much-hyped Bakkt platform is expected in early 2019. Bakkt is a futures trading service settled in real bitcoin and is backed by ICE, the parent company of the New York Stock Exchange.

We will continue to see bitcoin ETF proposals thrown at the SEC. At least one SEC commissioner, Hester Peirce, is supportive of bitcoin and serious discussions are taking place. Expect this to dominate bitcoin conversation for the coming year.

Elsewhere, huge leaps are being made in cryptocurrency technology. The lightning network is rapidly gaining pace in a bid to facilitate micropayments for bitcoin. Blockstream’s satellites are now beaming the blockchain to every landmass on earth, eliminating the need for internet access for bitcoin transactions.

Ethereum and Ripple 2018 price roundup

Ethereum fared worse than bitcoin through 2018, falling 85%. ETH started the year at $880 and ended at $133.

Ethereum price chart 2018. Source: CoinMarketCap

Ripple XRP also fell 85%, starting the year at $2.31 and closing at $0.35.

Ripple XRP price chart 2018
Ripple XRP price chart 2018. Source: CoinMarketCap

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