Best Crypto Exchange In India

Quality of this staff

Crypto Compare ranks exchanges based on characteristics such as how much of a customer's crypto assets is held in cold wallets, which are not linked to the internet and so cannot be hacked, and what types of money or insurance are in place in the event of a hack. It also tries to assess the integrity of a platform's data and pricing, as well as the efficiency of monitoring procedures in place to prevent money laundering, which has long been a source of concern for the sector.

Coinbase has the best score in the study, followed by other US and European crypto exchanges that were founded in the years after Bitcoin's rise and have been satisfying higher regulatory criteria. Gemini, situated in New York, was created by the Facebook-famous Winklevoss twins; Bitstamp, based in London; and Kraken, based in San Francisco.

Each of the four exchanges is a major participant in the industry with well-known names. According to a survey from CryptoCompare, the largest by far is Binance, a startup founded just four years ago in China that has developed rapidly, selling more than 350 currencies and generating a spot trading volume of $757 billion in March, over ten times that of Coinbase.

While Binance is ranked lower than Coinbase in terms of quality and security, it is usually regarded as the most creative, having launched one of the first crypto derivatives platforms for more advanced traders. After China tightened down on cryptocurrency in 2018, the business moved its operations abroad, but it has gone afoul of regulations in other places, forcing it to provide a stripped-down version of its online trading platform in the US.

Since Mt. Gox, the first major platform, collapsed in 2014 after many of its digital assets were stolen, the main exchanges have avoided the type of dramatic hacking incidents that have plagued the industry. Binance was hacked in 2019 and had $40 million stolen from its accounts. The losses were reimbursed by a fund set up specifically for such instances. Insurance for exchange accounts is currently restricted due to the volatility of crypto values, however cash holdings at businesses like Coinbase are covered by the Federal Deposit Insurance Corp.

Common and Famous Field

More than half of the trade tracked by CryptoCompare takes place on Asian exchanges, positioning Asia as a candidate for the industry's center of gravity. Huobi Global, another of the top crypto platforms, was created in China but relocated its headquarters to the Seychelles. Huobi has almost as many currencies as Binance, 325 to 358, but it doesn't get nearly as much traffic, with trading volumes of around $210 billion in March compared to $757 billion for the market leader.

Before going public in April, Coinbase made a complaint about its offshore competitors in a securities filing, claiming that its "commitment to compliance... has led in our clients shifting substantial cash and crypto assets to unregulated or less regulated competitors." Nonetheless, when crypto invades financial markets with tokenized versions of goods like stocks and bonds, as well as other regulated industries in which US institutions are proven leaders, its reputation provides it an edge.

How these platforms make money?

The biggest source of revenue for exchanges is the trading fees that investors pay when they convert their fiat currency into crypto and when they trade coins on platforms. With increased margin trading, leverage, and derivatives on certain platforms, the scope of services and markets is also expanding. In that way, the exchanges are similar to established stock trading platforms such as Charles Schwab in that they rely heavily on transactions to generate money.

Crypto exchange volumes are, predictably, significantly impacted by cryptocurrency price volatility. Bitcoin continues to have the most power at the moment. In the fourth quarter of last year, Coinbase's overall trade volumes than quadrupled, rising to $89 billion from $46 billion in the previous three months. This is similar to the price of Bitcoin, which nearly quadrupled in those three months. Coinbase is aggressively extending the number of coins it supports, believing that diversity would give some sort of stability.

The majority of Coinbase's income comes from transactions, with ordinary investors paying as much as 4% in trading fees, while institutional investors, who trade in larger quantities, paid under 10% on average last year. This compared to the 0.1 percent cost charged by rival Binance and established brokerages like Charles Schwab, who are increasingly charging nothing for online stock trading. Coinbase feels it has pricing power at the moment since it offers integrated safe asset storage and fraud protection. However, if brokerages like Robinhood Financial grow into crypto markets, costs may need to be reduced.

Other income streams include subscriptions and services, which include custodial services for institutional investors. While this element of Coinbase's revenue is still insignificant, at $45 million on $1.3 billion in overall revenue, it is rising quickly, with a year-over-year increase of 126 percent in 2020, albeit at a slower rate than transaction revenue, which increased by 139 percent. These services are part of Coinbase's effort to appeal to consumers that place a premium on security and regulatory compliance.

Nobody knows where the industry will go from here. In only a few weeks this year, India suggested outright bans on cryptocurrencies, while China unveiled its own state controlled digital coin. Crypto purists are flocking to so-called decentralized exchanges, an option that offers the type of trading secrecy that has ruffled regulators' feathers in the past. Coinbase's experience negotiating changing regulatory regimes should be a plus, and it has supporters like Marc Andreessen, co-founder of Netscape, who can help it spot challenges from incumbents.

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