Cryptocurrencies and the crypto trading market have seen widespread growth during the past few years. From being a niche interest, you can now find them at most mainstream brokerages. Specialized platforms or cryptocurrency exchanges with the goal of enabling crypto trades have also come up.
These cryptocurrency exchanges offer several types of crypto trades- spot, margin and derivatives. Among these, spot trading is one of the basic and perhaps safest methods for investing in cryptocurrencies. Here, traders buy cryptocurrencies at low prices to sell them in the future when their value rises.
In this article, you will learn more about crypto spot trading meaning, how spot trading works in cryptocurrency and various spot trading platforms and spot trading crypto exchanges.
What is Spot Trading in Cryptocurrency?
In simple terms, spot trading is about buying low and selling high. Buying Bitcoin at the time its price is low with the goal of making a profit in the future when its price rises is an example of this.
In spot trading, the three main concepts are spot price, settlement date and trade date. Spot price is the current price of any asset at which you can immediately sell said asset. This price keeps changing as old orders are fulfilled and new ones are placed.
The date the market actually carries out the trade is known as the trade date. It is also the date on which the transaction is initiated and recorded. Settlement date, on the other hand, is simply the date on which the assets in a transaction are actually transferred to the other party.
Spot trading is one of the safest investment methods as prices here are purely driven by demand and supply. Plus, since you have to buy the assets for spot trading with your own money, you don’t tend to buy more than you can afford.
How Does Spot Trading Work?
As we said earlier, the basic principle of spot trading is buying assets in this case cryptocurrencies at a low price and then waiting for their value to rise before selling them. You can conduct spot trades at centralized exchanges like Binance, decentralized ones like UniSwap or even Over-the-Counter(OTC) markets.
These platforms offer a variety of cryptocurrencies such as Bitcoin and Ether and more niche cryptocurrencies such as MKR and UFT. Some places offer fiat currencies as well. Centralized platforms often also levy various charges such as listing fees, trading fees and other charges.
Decentralized exchanges don’t have central order books and utilize blockchain technology and smart contracts for facilitating spot trades.
8 Best Crypto Spot Trading Exchanges
Spot trading is like, the most basic type of crypto trading. Therefore, it is supported by nearly all cryptocurrency exchanges of all types and sizes. Out of them, there are certain exchanges that are quite popular among spot traders.
Binance
Binance is one of the finest exchanges for cryptocurrency spot trading. It enables you to buy, sell, hold and trade 350+ cryptocurrencies at fees lower than 0.1%. While Binance is great for spot trading, you can also check out derivatives and P2P trading, swap farming and OTC services here. While trading, you can use the exchange’s native BNB token to get discounts on trading fees.
If your crypto assets are lying idle, you can use Binance Earn to earn passive income on them. You can also trade like a pro here with the exchange’s trading bots. They enable you to automate your trades and investments and replicate the trading strategies of other traders.
Institutions are also provided with premium solutions on Binance. They are given asset management and custody services plus rebates on spot and futures market trades. On Binance, you can also avail of crypto-secured loans.
Features
✔️Over 350 cryptocurrencies available for trading
✔️Biggest cryptocurrency exchange in the world
✔️BNB Coin is the native utility token
✔️Supports spot, margin and futures trading
Pros and Cons
✅Fantastic crypto collection ❌Legal problems in many places
✅Quick transactions ❌Exchange is not suitable for beginners
✅Trades are not costly
✅Trading bots for automated
trading
Trading Fees
VIP levels on Binance are charged fees according to the maker-taker system. Users after a certain level also get discounts on trading fees by using BNB for payments.
Trading fees for Binance
Customer Reviews
Binance is a great place for trading cryptocurrency
Binance’s customer support is not very helpful
Why We Picked It
Binance has a wide range of products for both individual and institutional investors. Trading here is not very expensive and you can get additional discounts by making payments with BNB. Plus, Binance supports P2P trading and enables you to put your idle assets to work to earn passive income.
Coinbase
Coinbase is a famous international cryptocurrency exchange for spot trading and a far simpler alternative to Binance. This platform is particularly known for its simple UI and minimalist approach to crypto trading. Once you register yourself and get your KYC verified, all you have to do is click on the “Buy/Sell” button. Even if you have never traded crypto before, you don’t have to worry as Coinbase has extensive tutorials for every step in the process.
Here, you get access to over 250 assets for spot trading and you can also stake your crypto assets for some additional income. Even if you just want to learn more about crypto trading, Coinbase is a good option. It has comprehensive educational resources that will help you increase your knowledge about blockchain technology and cryptocurrency.
For institutional investors, Coinbase has custody services and other premium solutions.
Features
✔️Over 250 assets available for trading
✔️Second-biggest crypto exchange
✔️Basic and pro versions are available
✔️Consultancy services for institutional investors
Pros and Cons
✅Public listed company ❌Trades on Basic version are expensive
✅KYC is mandatory ❌Bad customer support
✅Low fees on Coinbase Pro
✅Tutorials and educational
resources
Trading Fees
The final fees you pay on Coinbase for trading depend on several factors such as order size, asset type, payment method and market conditions.
Trading fees for Coinbase
Customer Reviews
Coinbase is an excellent option for crypto trading
The verification process on Coinbase can often be annoying
Why We Picked It
Coinbase is a simple and overall transparent and reliable platform. It has a minimalistic and straightforward UI, the mobile app functions well and is quite similar to the desktop version. If you want more advanced options, you can check out the Coinbase Pro platform which is meant for seasoned traders.
Kraken
Kraken, like Coinbase, is one of the OGs of the crypto world. Not only that, but it is also the first cryptocurrency company to be approved as an SPDI in the US.
On Kraken, you get not just a collection of 200+ cryptocurrencies but also high staking rewards. Along with that, there’s a plethora of learning material including a blog, a podcast and guides for individual cryptocurrencies.
Like all crypto exchanges, Kraken also uses 2-factor authentication(2FA) for security. Beyond that, the exchange also employs SSL encryption for a safe user experience. Emails are encrypted communication and phone number or SMS recovery is not allowed for safety. The platform ensures transparency with the help of Proof of Reserves audits conducted by external auditors.
Features
✔️Over 200 cryptocurrencies available
✔️Has a Pro version with advanced features
✔️Proof of Reserves audit conducted
Pros and Cons
✅Lower fee on Pro version ❌Has been previously hacked
✅High liquidity ❌High fees on basic version
✅Supports stop orders and ❌Not for amateur traders
crypto short sales
✅Multifaceted educational material
Trading Fees
There are no fixed trading fees on Kraken Instant Buy as it is determined by factors like asset type, order size and market conditions which keep changing. On Kraken Pro though, the usual maker-taker system is used.
Kraken Instant Buy fee
Kraken Pro fee
Customer Reviews
Kraken has a responsive customer support
Accounts are sometimes closed on Kraken
Why We Picked It
There is something for everyone on Kraken- be it the basic or the pro version. It is one of the oldest exchanges in the industry and one that is still going strong. The coin selection here is decent, it supports several fiat currencies as well and offers good rewards for staking.
KuCoin
KuCoin which is a Seychelles-based exchange derives its strength from its massive crypto collection. It has an enormous collection of over 700 crypto coins for traders to choose from.
Therefore, KuCoin is an excellent option for spot trading. It also supports margin trading where you can leverage your position. The exchange also features trading bots that you can use to automate your trades.
All the data is encrypted on KuCoin- whether in storage or in transit. Multi-factor authentication is also used for securing user accounts. In addition, there are API access controls and functional area isolation available for access security.
Features
✔️700+ available coins
✔️Supports spot and margin trading
✔️Multi-factor authentication and encryption for account safety
✔️Native token is KCS
Pros and Cons
✅Massive collection of crypto coins ❌Convoluted fee structure
✅Automate trades with trading bots ❌Not suitable for beginners
✅Low fees for trading
✅Enables crypto lending
Trading Fees
Higher levels on KuCoin are charged lower fees. The system here can be a tad bit complicated due to the use of multiple classes and categories.
KuCoin fee schedule
Customer Reviews
KuCoin is a decent platform with low fees
KuCoin has bad customer service
Why We Picked It
KuCoin is a great platform if you would like access to a wide variety of coins and find a few gems in its vast collection. The low trading fees are an added advantage. Plus, the exchange has several advanced features and an active referral program.
Bybit
Bybit is the largest USDC Options marketplace. However, despite its focus on derivatives trading, Bybit is also quite popular among spot traders. It has a great collection of spot trading pairs and even spot grid bots that can execute trades on your behalf.
Bybit also lets you customize your savings plan by choosing between fixed or flexible products or even a combination of them. Pretty much all the products have competitive and guaranteed APYs.
Data access is strictly controlled on Bybit due to security reasons. Only the users can access their private information. The use of 2FA, human-computer authentication and hardware authentication further help in securing user accounts and the platform.
Features
✔️One of the fastest-growing centralized exchanges
✔️280+ spot assets available
✔️Has spot trading, perpetual trading and options trading
✔️Supports multiple languages
Pros and Cons
✅Extremely low trading fees ❌Trade volume statistics are not verified
✅Transactions are settled fast
✅Intuitive design
Trading Fees
The maker-taker fees on Bybit are on the lower end even for the regular non-VIP users.
Details of Bybit fees
Customer Reviews
Bybit has a vibrant social community for crypto trading
Bybit may sometimes freeze
Why We Picked It
Multiple order types including spot trades are supported on Bybit. Plus, it has low trading fees and also maintains an insurance fund to protect traders from negative equity. Bybit is generally regarded as a safe exchange as it has never been hacked before.
OKX
Formerly known as OKEx, OKX is a Seychelles-registered exchange with its own blockchain, token and wallet. With over 350 coins, it has a healthy collection of cryptocurrencies for users to choose from.
OKX is a platform that is easy to navigate but beyond basic crypto buying and selling, you can also stake your crypto assets in OKX mining pools and earn some income. Beyond that, it also supports spot, margin and derivatives markets and you can explore DApps on it too.
OKX keeps most of the user funds in cold wallets for security. Even then, more than 1,000 BTC are not kept in one cold wallet address. It also has an asset risk reserve fund to protect user assets. Users are also encouraged to switch on 2FA, anti-phishing code and mobile verification for security.
Features
✔️Over 350 cryptocurrencies available
✔️Native blockchain known as OKX Chain and native token is OKB
✔️OKX Wallet supports several networks
✔️Customizable layout on advanced platform
Pros and Cons
✅Spot, futures and options trading ❌Several scandals involving the
✅Multiple options for buying crypto company
✅High APY for staking assets ❌Unsatisfactory customer support
✅Demo trading feature ❌Fee structure is complex
Trading Fees
Details of OKX fees
Customer Reviews
OKX is a platform that is quite easy to use
Issue of unrelenting spam on OKX
Why We Picked It
OKX’s UI makes it easy to use on both desktop and mobile. It is a good option for beginners due to its simplicity. It has an extensive FAQ section with detailed answers for nearly every possible query.
Bitstamp
Bitstamp is an old, reputable and reliable cryptocurrency exchange. Among other things, this platform has a whopping 50 licenses and registrations that it has obtained in various jurisdictions across the world.
While there may be fewer options for spot traders on Bitstamp as compared to other exchanges on this list, here you get the advantage and assurance of trading on a heavily regulated platform with a transparent fee structure.
Bitstamp does not have a lot of fancy stuff but it delivers on what it promises i.e. a simple and easy trading experience. Plus, you can check your account, stay updated on the latest market happenings and trade from anywhere with the Bitstamp mobile app.
As Bitstamp is committed to platform security, it keeps 95% of the in cold storage and uses encryption technology for all personal data. It also has the option of transaction confirmations that you can switch on for added security while trading.
Features
✔️More than 80 cryptocurrencies for trading
✔️One of the oldest platforms for crypto trading
✔️Funds kept in cold storage
Pros and Cons
✅Trading fees are adequate ❌Fewer crypto coins available
✅Easily navigable platform ❌Margin trading not supported
✅Excellent mobile app
Trading Fees
Bitstamp follows the simple maker-taker system for charging trading fees where the same is determined by the 30-day trading volume of the user.
Fees for Bitstamp exchange explained
Customer Reviews
Bitstamp is a trusted and reliable crypto exchange
Users have reported issues with withdrawals on Bitstamp
Why We Picked It
Bitstamp has been in the crypto industry for a long time and has a solid reputation for being a reliable platform for trading cryptocurrency. It does not have a fancy design or a long list of crypto products and services but it is a very accessible platform that makes it a great option for beginner traders.
Gate.io
Gate.io is a cryptocurrency exchange with a collection of nearly 1,400 cryptocurrencies. The sheer variety offered by it is a big reason why this platform is popular among spot traders. Another point in Gate.io’s favor is that it accepts around 20 fiat currencies which are way more than other major crypto exchanges.
Along with spot trading, Gate.io also supports leverage trading and copy trading where you can imitate the strategies of leading traders. The exchange also claims that it provides free NFT minting and enables free withdrawals.
Features
✔️1,400+ cryptocurrencies available
✔️Supports spot, leverage and copy trading
✔️Native coin is known as GateToken
Pros and Cons
✅Massive collection of coins ❌Poor English on the platform
✅Supports several fiat currencies ❌Not suitable for beginners
✅Advanced features for seasoned ❌Has been previously hacked
traders
Trading Fees
Gate.io follows the maker-taker model for determining fees. Here, users are categorized into VIP levels according to their 30-day trading volume and then fees are charged accordingly.
Gate.io trading fee explained
Customer Reviews
Gate.io has good choices for leveraged trading
KYC verification on Gate.io can take a long time
Why We Picked It
Gate.io has a massive variety of cryptocurrencies which is certainly good news for spot traders. For experienced traders, it also offers some more advanced trading features. If you want to dabble into lesser-known coins and can handle some risks and navigate a platform that is not primarily in English, you can go for Gate.io.