10 Best Ethereum Exchanges in 2024

What Is an Ethereum Exchange?

Before Ethereum, blockchain technology was largely associated with cryptocurrencies and financial transactions. Vitalik Buterin believed that the technology was under-used and that different applications could be built from it. This resulted in Ethereum and its accompanying Ether token. The token powers all the transactions on the network and is used as a reward for miners when they add a block.

Ethereum has gained immense popularity, especially due to the numerous ICOs and platform launches on the network. The increasing value makes it an excellent choice for traders to buy and sell to make profits. Today, Ethereum exchanges offer varying levels of services, from very basic such as instant swaps to derivatives like Futures, Perpetual and even leveraged trading.

How Do Ethereum Exchanges Work?

Ethereum exchanges are platforms that work on the basic rule of trading: buying and selling of assets such as Bitcoin and Ethereum. These marketplaces connect different traders from all over the world who then agree to exchange their assets on agreed prices and rates.

To begin trading, a person should first register on one of the exchanges. If you are interested, use our above-given list for the best Ethereum exchanges in 2024. Head over to the exchange of your choice and tap on the signup or register option, usually located on the top right side of the website. Most crypto exchanges also have mobile apps so if you are using your cell phone, you can download their app from the relevant app store.

The registration process varies from crypto exchange to crypto exchange, but there are a few fundamentals that are the same across all, such as entering your name, email address, and creation of a username and password. Provisional information may require a mobile number and even the country of citizenship.

A reputable Ethereum exchange will also ask for additional information and documentation under Know Your Customer (KYC) and Anti Money Laundering (AML) regulations. This information may include:

• Uploading government-issued ID.
• Proof of residency.
• Income Source.
• Bank Statement.

Depending on where the Ethereum exchange is located, there may be other requirements as well. It is also the prerogative of the crypto exchange on when to ask for these checks. This may be a part of the registration process or mandatory immediately after the registration. Some exchanges even create different levels of KYC checks, each level unlocking different trading features and enhancing limits.

The regulation checks can be a bit cumbersome at times and a bit unnerving as a lot of private information is being handed over to the exchange. In this scenario, people might lean towards crypto exchanges that do not ask for any KYC documentation or information, but this has a far bigger implication. These exchanges are skirting the law already and the chances of you losing your crypto assets aren’t worth the risk.

After registration (and any KYC/AML approval), users can start trading. The next step in buying and selling Ethereum is getting the crypto exchange account funded. If you already own crypto assets, you can go to the wallet option in your exchange. Using this, traders can transfer their tokens and coins from their own Ethereum wallets to their exchange.

In case a user doesn’t have any cryptocurrencies, they can look for a fiat option in the exchange. Many exchanges support buying and selling of cryptocurrencies through fiat. If your exchange has this, look for options such as linking your bank account or using your credit and debit cards for purchasing. Alternatively, you can head over to a peer-to-peer exchange that allows fiat currency buying of crypto.

Once the account is funded, the user can head over to the trading interface. Depending on the type of customer the exchange is catering to, the interface can be very plain or show varied information. In any case, the user will need to select a trading pair. The pair is represented by the cryptocurrency in question and a base one. ETH/USDT trading pair, for example, shows the user the Ethereum price in terms of the USDT stablecoin. The trader can buy Ethereum by paying USDT or sell off Ethereum for USDT.

Withdrawing is also very straightforward in Ethereum exchanges. Navigating to the exchange wallet, traders can select the cryptocurrency they want to withdraw and enter the number of coins and the destination wallet’s public key.

People looking to deposit and withdraw cryptocurrencies are advised to be very careful in noting down the wallet addresses. Blockchain transactions are a one-way street and once executed, cannot be reversed back. Sending cryptos to the wrong address or a different blockchain network means the coins are lost forever.

Using an Exchange Vs a Broker

While Ethereum exchanges give users access to a whole new financial system for selling and buying cryptocurrencies to make profits, these platforms are aimed at people who would like to actively buy/sell and trade crypto directly. For people who would prefer to have an investment expert do trading on their behalf, a broker is a better option.

The client never actually buys the cryptocurrency and the broker only offers different contracts of cryptocurrencies, letting the client pocket the profit (minus the broker’s fee, of course).

Leveraged products offer anywhere from 3 times to 100x exposure, with the broker investing money along with the client’s, buying crypto, while charging an interest against the loan. When the position is closed at a higher position, the loaned amount is returned to the investor, along with any interest or other charge, giving the client his original money and the difference (profit). Through this, a client can multiply his or her profits many folds. A drawback to leveraging is that the elasticity of profits also means greater losses, as the broker can liquidate the order if the Ethereum price falls and recover the invested money, leaving nothing for the client.

Contract For Differences (CFDs) is a speculative contract that allows a person to buy a contract with speculation of the rise in the value of the underlying asset (Ethereum in this case), paying a premium above the market rate. The contract can be closed anytime, with the difference between the contract rate and the market value being pocketed as a profit (or a loss).

Futures is another speculative product that closes at a predetermined time, with speculation of the value of Ethereum (or any other underlying crypto) at that time. On expiry, if the crypto market price is lower, the difference is paid out to the buyer as profit, after the broker takes his cut of the fee.

Perpetual is a variation of the Futures that doesn’t have any expiry time as such, but interest rates do apply, along with the broker’s ability to liquidate the contract if the Loan to Value Ratio (LVR) falls below a certain point.

Types of Exchanges

• Centralised Exchanges: Using traditional central servers to host data and the whole platform, most Ethereum exchanges are centralised. They offer higher trading speeds and liquidity, but due to their single point of failure, can be hacked. The traders transfer over their Ethereum and other cryptocurrencies so technically they are at the mercy of these exchanges.
• Decentralised Exchanges: Running on the blockchain technology themselves, these exchanges are sometimes referred to as non-custodial trading platforms as traders don’t need to hand over their crypto assets to trade. Smart contracts and liquidity pools replace the escrow and order books. Traders connect their Ethereum wallets to the exchange and use smart contracts to swap digital assets. Drawbacks include the slower speed of exchange (due to block confirmation time) and price variation during the execution (slippage).
• Local Exchanges: Though many exchanges offer trading services at a global level, some are only catering for users within physical borders. These exchanges can be fully-fledged or even peer-to-peer ones.
• Fiat Vs Pure Exchanges: Pure exchanges only offer crypto to crypto trading pairs, with each crypto coin traded against another. Fiat exchanges, on the other hand, offer crypto to fiat pairs, enabling deposits and withdrawals of fiats.

Key Things to Consider When Choosing the Best Exchange to Buy Ethereum

One of the hardest things for crypto investors and traders is to select the right Ethereum exchange. Choosing the wrong Ethereum platform can lead to a lot of problems as you might find it hard to trade, battle with high fees, and face other difficulties in deposit and withdrawal of funds. Hence, it would help if you evaluated various features before choosing a platform. Some of these features are:

Usability – The Ethereum exchange you choose must have an easy-to-use platform with a simple and straightforward user interface.

Payment methods – The ideal platform must offer various deposit/withdrawal methods and charge low fees for the transactions.

Liquidity – An Ethereum exchange with high liquidity executes trades faster and easier. This means you can buy/sell ETH on the platform faster and with ease.

Fees – Choose an Ethereum exchange with low fees for various transactions, including deposits, withdrawals, buying and selling ETH, conversion and more. The exchange must be transparent regarding its fee structure.

Transaction speed – It is recommended to choose a platform with a fast transaction speed. This way, your trade is locked in at the desired rate and not higher due to volatility and price slippages.

Type of trades – Ethereum exchanges differs based on the type of trades they conduct. You have to know if the exchange is a derivative exchange, a decentralised exchange, P2P, or others and choose the platform that meets your trading demands.

Account verification – Choose a platform that offers account verification as it helps secure your account. However, if you value anonymity, it is best to choose an exchange that doesn’t require you to reveal a lot about your identity.

Reputation – The crypto space has experienced a lot of exit scams in the past. Hence, as a trader, you need to be careful when choosing an Ethereum exchange. It is important to trade with a reputable exchange that has never made the news for the wrong reasons.

Security – This should be top of the list due to how prone crypto exchanges are to hacks. Ensure the platform implements strict and updated security protocols such as two-factor authentication (2FA), cold storage wallets, and more.

Should I Buy or Trade Cryptocurrency?

Buying or trading cryptocurrencies depends on your objectives and knowledge of the market. If you desire to play the long-term game to earn profit from the market, then you should be an investor. However, if you intend to earn profits by leveraging the cryptocurrencies’ daily price volatility, you should be a trader.

As a novice trader or investor, you can start small and increase your investment capital over time. However, it is best to abstain from trading until you have an in-depth knowledge of cryptocurrency.

The cryptocurrency market has expanded over the past few years to offer other trading alternatives. The availability of trading instruments like futures, options and CFDs (Contract for Difference) allow users to trade cryptocurrencies without necessarily owning them. You can also find these trading instruments on derivative exchanges.

Options: These are cryptocurrency trading vehicles that allow the trader to buy/sell the cryptocurrency at a pre-agreed price on a specific future date.

Futures: They are popular trading instruments that involve agreeing on a price at which a cryptocurrency trade will be executed on a future set date. They are high-risk and high-reward investment vehicles due to the high volatility of the cryptocurrency market.

Contracts for Difference (CFDs): These allow you to speculate on the cryptocurrency price movements and take either short or long-term positions in the market so you can earn profits. You do all these without owning the underlying crypto asset. CFDs involve high risk and should be used by expert traders.

Final Thoughts

With this guide on Ethereum exchanges, you will now have a fair idea of what trading platforms will serve your interest. Each exchange for buying Ethereum has features that you may like. Weigh in all of the pros and cons to determine what exchange suits your needs, taking into account the key factors and the type of the exchange itself.