Traders

Fall 2015: Top Rated Bitcoin Exchanges

Welcome to our Fall 2015 edition of the top rated and reviewed bitcoin exchanges, where we highlight the best ranked bitcoin exchanges on the market according to community reviews.

For those unfamiliar with our website, we have the largest database of bitcoin exchanges where we monitor every exchange and provide tools to the bitcoin community to rate and review each one.

Through our ranking system, bitcoin exchanges can rank high or low, and for the Fall 2015 report we are taking the top three highest ranking exchanges to feature. Since our rankings are in real-time, there is a opportunity that after the publishing of this report, the exchange rankings may change based on community feedback and exchange rankings may fluctuate, which is to be expected, and overtime we expect the rankings to normalize. We encourage more community members to participate by rating and commenting on their favorite bitcoin exchanges.

On to the top three ranked bitcoin exchanges for Fall 2015

Ranked #1: LocalBitcoins

The best ranked bitcoin exchange according to community ratings is LocalBitcoins. At the time of publishing, the LocalBitcoins exchange listing is ranked 3.25 out of 5. LocalBitcoins may be the most unique exchange though of the group, as it’s formula to success has been the community of traders that use the the exchange which creates a decentralized way in which people can buy and sell bitcoins with each other.

LocalBitcoins isn’t a matching engine platform, it’s a place where members can find others to buy or sell bitcoins with each other locally. Since the exchange service is available to everyone, anyone across the world can setup a LocalBitcoins account and begin to buy or sell bitcoins locally. The exchange offers important features such as their escrow service.

LocalBitcoins started in 2012 in Finland, and according to their website they haven’t raised any venture capital to date, and appears to be privately funded.

Ranked# 2: Cryptonit

The second best ranked bitcoin exchange this year according to community ratings is Cryptonit. At the time of publishing, the Cryptonit exchange listing is ranked 3.24 out of 5, ranking second out of all bitcoin exchanges on the market. Launched in August 2012, Cryptonit is a bitcoin exchange and a registered money service business based in the UK which is focused on the European bitcoin market.

Cryptonit is a gateway for users to buy or sell bitcoins in exchange for fiat currencies, and they allow many different payment methods to on-board new users. Cryptonit also has a public API for developers. One lacking feature is the exchange doesn’t have any advanced trading functions such as market, limit, or stop orders for example. Overall, the exchange is a good starter exchange for bitcoin users to buy and sell bitcoins which may be one of the reasons for it’s popularity.

Ranked #3: Kraken

The third best ranked bitcoin exchange according to community ratings is Kraken. At the time of publishing, the Kraken exchange listing is ranked 3.22 out of 5, coming in a close third and out ranking the rest of the bitcoin exchanges on the market. Kraken is a US based bitcoin exchange, which has grown a lot over the years.

Kraken, like all exchanges, allows users to buy and sell bitcoins. However, earlier this year they expanded to allow margin trading, advancing their platform and user base with a feature rich trading experience. Kraken has also done many non-conventional things in the bitcoin space that has set them apart from others, for example taking over the Mt.Gox liquidation to help former Mt.Gox users get back some money they may have lost.

Kraken has also expanded to Japan and Canada most recently, and surprisingly left New York in a stand against the BitLicense. Just last year Kraken raised $5 million in new capital as part of a Series A fundraising round.

The Bitcoin Exchange Ecosystem

If there is one thing that we have learned over the past two years, it has been that the sheer number of bitcoin exchanges has exploded. From just a handful of exchanges, now there are new exchanges popping up every week. It’s become an extremely profitable business model, which venture capitalists see the profit margins and the possibilities with bitcoin and blockchain tech, and are jumping in feet first to help get these startups going. This is both exciting and worrisome at the same time, because the ecosystem is now becoming overly saturated with exchanges, brokers, trading platforms, and so on which creates additional hurdles for new users to overcome when entering into bitcoin because of the complex environment.

In the most recent CoinDesk State of Bitcoin report, the bitcoin exchange venture capital raised in just Q2-2015 was $35 million, well above bitcoin wallet companies. In total in 2015, there has been $52.94 million in venture capital raised for bitcoin exchanges so far, not including private funding, crowd funding, and funding we’re unaware of.

FinTech is the new buzzword this year, mainly due to the new blockchain phenomenon and banks working with bitcoin companies in attempts to learn more about it, which has garnered a tremendous amount of interest in financial services which is helping to lay the ground work for many new exchange startups in the U.S. and in the United Kingdom. Other regions seeing large booms of infrastructure and interest in exchanges and FinTech are in Asia.

In the U.S. this year, we saw a major divide in bitcoin exchanges when it came down to the NYDFS BitLicense. When the license was introduced, it was clear that many were against any sort of regulation that would stifle startups and innovation. However, that didn’t stop several bitcoin exchanges from applying for the BitLicense in efforts to dominate the market through regulation. Other bitcoin exchanges decided to leave New York or stop servicing New York all together in a stance opposing the license.

Unfortunately for exchanges in Australia, they have seen the tide turn against them. Recently some of Australia’s biggest banks decided to end financial support for several bitcoin companies. This has forced some exchanges to move out of Australia or to close down completely. Some haven’t communicated anything publicly yet, as they are still trying to find new banking partners in Australia, before deciding how to proceed.

Final Thoughts

In total, we are tracking and monitoring 150+ bitcoin exchanges across 59 different countries, and the number is rising as more venture capital being poured into bitcoin and blockchain technology. However as mentioned earlier, there won’t be all winners in this, as there is only room for so many bitcoin exchanges. Who is successful remains to be seen, but those with venture capital backing, a strong suite of tools, and in the right emerging market with the most favorable regulations stand to have the best chance.