Bitcoin was introduced to the world in 2008 and officially came into use in 2009. While it was intended to be a digital currency or an alternative to real-world money, Bitcoin and later other altcoins became more popular as speculative instruments.
People started investing in cryptocurrencies to take advantage of their volatile nature to make huge profits. Cryptocurrency exchanges developed as a means of providing easy access to crypto assets.
Over time, these exchanges started offering other services and custom solutions as well. However, as an emerging industry, the cryptocurrency space is rife with mismanagement and regulatory issues.
If the FTX crisis of 2022 has shown us anything, it is that cryptocurrency exchanges can easily collapse like a house of cards if not managed properly. Even before FTX, there were exchanges that were once thriving and then unceremoniously went down.
However, there still are platforms that have been there since the heydays of Bitcoin. In this article, we are going to learn about some such cryptocurrency exchanges which have been around since forever and are still running and thriving.
The Early Days of Bitcoin Trading
Getting Bitcoin(BTC) these days is very easy. There are so many options that have made cryptocurrency in general quite accessible to the public. If you do not want to take a risk with peer-to-peer(P2P) trading, you can simply buy BTC off a cryptocurrency exchange with fiat money like the US Dollar(USD).
However, it was not always like this. The Bitcoin Genesis Block was introduced in 2009 and back then, the only way to get BTC was to either mine it or buy it via P2P trades on forums like Bitcointalk. This forum was founded by Satoshi Nakamoto himself to host Bitcoin-related discussions. The trades arranged via these forums and IRCs hinged on trust between the transacting parties to fulfill their side of the deal. But remember that the risk involved in such trades was significantly lower than it is today because BTC was worth virtually nothing at the time.
In 2010, only a year after Bitcoin was officially launched, talks turned towards the creation of a real marketplace to buy and sell cryptocurrencies. A site called bitcoinmarket.com was proposed by “dwdollar” on the aforementioned forum. It initially accepted PayPal for exchanging BTC for fiat but it was removed as a payment method in 2011 after a string of fraudulent trades.
bitcoinmarket.com was soon replaced by the infamous Mt.Gox as the dominant Bitcoin trading platform. At one time, the Jed McCaleb-founded Mt.Gox was handling 70% of all global BTC trades but by 2014, confidence in the exchange had started waning.
In February 2014, Mt.Gox suspended trading and withdrawals and filed for bankruptcy. It was later revealed that the exchange had been suffering from a major hack since 2011 and had nearly 850,000 bitcoins stolen from its hot wallets.
In the meantime, exchanges such as Coinbase, Kraken, Gemini and Bithumb etc. had started emerging as alternatives to Mt.Gox. While a lot of exchanges had been hacked after 2014, most of them persevered and are still running their business quite successfully.
The Oldest Crypto Trading Platforms
Being in business for over a decade is a remarkable feat in an industry known for its extreme volatility. There are cryptocurrency exchanges that have come and gone but there are some that have weathered the storms and are still doing quite well.
Kraken
Kraken was founded in July 2011 in San Francisco by Jesse Powell and Thanh Luu. This makes it the oldest cryptocurrency exchange still in business. Since the beginning, Kraken has been at the forefront of the blockchain revolution and now offers 200+ cryptocurrencies to over 9 million clients in 190+ countries across the globe.
It caters to the needs of advanced crypto traders via its Kraken Pro platform. The Pro version is a highly-customizable platform where you can instantly switch between spot, margin, futures trading and staking. You get a consolidated portfolio with live market data to fetch you the best possible price.
In 2020, it became the first cryptocurrency exchange to receive a Special Purpose Depository Institution(SPDI) from the Wyoming Division of Banking. The Kraken Bank, therefore, will be the first crypto bank in the US and is expected to launch traditional and crypto banking products.
Founded: July 28, 2011
Founded by: Jesse Powell, Thanh Luu
Cryptocurrencies Available: 200+
Native Token: N/A
Fiat Supported: 07
Bitstamp
Bistamp, founded in August 2011 by Damijan Merlak and Nejc Kodrič, is the oldest European cryptocurrency exchange in existence. Initially established in Slovenia, it shifted its base to the UK in 2013 and then finally to Luxembourg in 2016.
Developed as a European alternative to the now-defunct Mt.Gox, Bitstamp runs on three simple principles of security, transparency and regulation. Established at a time when banks did not even know about Bitcoin, Bitstamp now serves 4 million customers globally.
In 2016, it became the first cryptocurrency exchange to obtain a Payment Institution license in the European Union(EU). This license has allowed Bitstamp to operate in all EU member states. Overall, it holds 50 licenses and registrations globally including the BitLicense issued by the New York Department of Financial Services.
Bitstamp now hosts 82 crypto assets and offers real-time market insights, analytical tools and powerful order types.
Founded: August 2011
Founded By: Damijan Merlak, Nejc Kodrič
Cryptocurrencies Available: 82
Native Token: N/A
Fiat Supported: 03
Coinbase
Coinbase was founded in 2012 in San Francisco and a decade later, it is now the largest cryptocurrency exchange in the United States by trading volume. It is also the second-largest cryptocurrency exchange globally after Binance.
Coinbase has many accolades to its name including being the largest public crypto company. It was listed on NASDAQ via a direct stock listing in April 2021. As a publicly traded company, it is required to publish quarterly financial statements and undergo annual audits conducted by an independent third party.
Coinbase is particularly known for being an accessible and secure crypto exchange. It is one of the most straightforward places to buy and sell cryptocurrency. You can explore 250+ cryptocurrencies on Coinbase and keep track of all your trades in your portfolio.
Founded: June 2012
Founded By: Brian Armstrong, Fred Ehrsam
Cryptocurrencies Available: 250+
Native Token: N/A
Fiat Supported: 03
Bitfinex
Bitfinex was established in 2012 with the aim of delivering the best cryptocurrency experience to all types of traders. It not only lists 200 cryptocurrencies and 400 spot trading pairs but also 60+ perpetual futures contracts.
In 2022, it became the first cryptocurrency exchange to launch a public statement of its guiding principles and strategy called the Freedom Manifesto. Apart from spot trades, Bitfinex also supports margin and derivatives trading and also offers OTC and lending services.
Bitfinex also has a close association with the stablecoin Tether(USDT) as they are both owned by the same company. It was further reported in 2018 that the two had common shareholders and management.
Bitfinex has often found itself the subject of controversies and scandals due to several reasons. These include hacks and security breaches, difficult banking relationships and a controversial association with Tether.
Founded: December 2012
Founded By: Raphael Nicolle, Giancarlo Devasini
Cryptocurrencies Available: 150+
Native Token: UNUS SED LEO
Fiat Supported: 04
CEX.io
CEX.io debuted as a centralized cryptocurrency exchange in 2013. It was founded by Oleksandr Lutskevych and his team who had earlier developed the most efficient Bitcoin mining chip of the time. CEX.io was established with the goal of removing technical complexities from cryptocurrency trading.
It was the first exchange to introduce BTC purchases with credit cards in 2014 and launched the Instant Buy feature for cryptocurrency in 2016. There are over 200 cryptocurrencies available for trading on CEX.io with an advanced order matching algorithm and a high liquidity order book.
CEX.io is now available in 194 countries and 49 US states. In addition, it has over 30 licenses and registrations around the world.
Founded: 2013
Founded By: Oleksandr Lutskevych
Cryptocurrencies Available: 200+
Native Token: N/A
Fiat Supported: 03
bitFlyer
bitFlyer was launched in January 2014 in Japan as a crypto asset exchange and financial instrument exchange operator. It is the largest Bitcoin operator in Japan and one of the most prominent cryptocurrency exchanges in the country.
bitFlyer has a simple and intuitive user interface meant to simplify the cryptocurrency trading process. You can start with as little as 1 JPY without needing to pay any fees on Buy/Sell and deposits made from Sumitomo Mitsui Banking Corp.
Apart from Instant Buy/Sell, bitFlyer supports limit orders for a better range of options. You can also access spot, margin and futures trades via the bitFlyer Lightning platform.
Founded: 9 January 2014
Founded By: Yuzo Kano
Cryptocurrencies Available: 21
Native Token: N/A
Fiat Supported: 03
Poloniex
Poloniex was founded by Tristan D’Agosta in 2014 for buying and selling cryptocurrencies, NFTs and crypto futures. Based out of Wilmington, Delaware in its early days, Poloniex was acquired by Circle Financial in 2018 and moved its headquarters to Bermuda.
In 2019, it was sold to an Asian-backed consortium that also included Justin Sun’s Tron. In the same year, it suspended trading for US residents. Most of Poloniex’s customers are, therefore, now based out of the US.
It offers 400+ cryptocurrencies for trading and perpetual swap contracts with upto 100x leverage. It has also introduced cross-margin trading with 3x leverage and an NFT marketplace to buy, sell, create and trade premium NFT collections.
Founded: January 2014
Founded By: Tristan D’Agosta
Cryptocurrencies Available: 400+
Native Token: N/A
Fiat Supported: 07
Moving Towards Regulation and Compliance
As cryptocurrency trading largely took place via the P2P route with little regulatory oversight, cryptocurrencies were largely associated with nefarious activities such as money laundering and terror financing. On a consumer level too, scams and fraudulent trades were a common problem in the absence of any sort of KYC verification and grievance redressal mechanisms.
While initially hostile, financial regulatory authorities in different countries in America, Europe and Asia have now adopted the regulatory approach and seek to bring the crypto industry within the regulatory regimes of the territories they operate in.
The crypto industry, too, has welcomed these developments as steps towards better acceptance of cryptocurrencies and their potential. Most reputed centralized exchanges now comply with various Know Your Customer(KYC), Anti-Money Laundering(AML) and Counter-Terrorism Financing(CFT) laws.
Some exchanges such as Coinbase have gone the public listing route and several others have started putting up their Proof-of-Reserve reports on their websites to be publicly reviewed by anyone.
Many countries have also introduced specific legislation to address the crypto industry or attempted to bring it within the purview of the existing legislative framework for financial services. The profits from the purchase and sale of crypto assets now also attract capital gains tax in many places.
Despite this, it is always a good idea to do thorough research before selecting a cryptocurrency exchange and investing in an asset class known for wild speculations and extreme price volatility.