For better or for worse, it's become incredibly easy to trade cryptocurrencies. It's been a brutal run for digital currencies and digital assets through the first half of 2022, though, and many newer investors have been burned by plummeting prices of top cryptos like Bitcoin (down 55% year to date as of this writing) and Ethereum (down 68% year to date).
Many investors both large and small are still HODLing (holding on for dear life) in spite of the pain. As ugly as it's been, the young crypto industry has suffered several massive sell-offs since the original crypto Bitcoin launched in 2009. Here are three crypto exchanges to use if you want to buy the dip.
Three top crypto exchanges
For more traditional investors who want to incorporate a little crypto into their portfolios that currently consist primarily of stocks and bonds, many online brokerages have enabled basic trading of a few digital currencies. However, if you want an expanded list of options beyond the biggest cryptos by market cap, here are three exchanges to consider.
For many investors looking to get familiar with the cryptocurrency industry, Coinbase Global (COIN 1.38%) is perhaps the closest thing there is to a household name among crypto exchanges. It was an early entrant in the space, founded in 2012. The company's stock went public in 2021.
A big draw here is Coinbase's easy-to-use mobile app. Whether you're new to the game or a seasoned investor, Coinbase's basic platform is geared toward getting started quickly.
There are dozens of cryptocurrencies available for trade. Coinbase offers educational resources (some of which reward users with small amounts of crypto) and some banking features, like a debit card. If you're learning how to stake crypto (a way to commit your crypto holdings to earn rewards from the management of a blockchain network, akin to earning a dividend), Coinbase has some capabilities in this department, as well.
There are some drawbacks to be aware of. Coinbase's basic app is easy to use, but fees are high. They're variable depending on the size of the trade and other factors like market volatility, with the actual fee disclosed at the time of trade confirmation. For crypto traders looking for more advanced tools and lower fees, there's another tier called Coinbase Pro, accessible via your same basic Coinbase login credentials.
Nevertheless, if an easy-to-use interface is what you're after, Coinbase is worth considering if you're looking to buy the dip in a crypto and hold for the long term.
Gemini is another full-featured crypto exchange, founded in 2014 by the Winklevoss twins. Its mobile app is also easy to learn and get started with, making it ideal for investors looking to quickly get up and running to invest in the crypto dip. Gemini also has a related exchange called Nifty Gateway, where it curates non-fungible tokens (NFTs) and allows investors to store their digital assets.
Gemini also has a wide selection of cryptos and blockchain tokens that can be traded, although some of the larger cryptocurrencies are missing. The exchange also has no minimum account balance and there's no multitier trading system like at Coinbase. One of the biggest benefits here is Gemini Earn, which offers tools for staking cryptos (like with Ethereum's new proof-of-stake blockchain network) to start earning passive income.
Some drawbacks of Gemini are the lack of some banking features that rival Coinbase offers (like an account-linked debit card). However, the app does feature a QR code scanner that allows for mobile payments at accepting merchants.
The fee structure for trading is also variable depending on the size of a trade, and these fees can add up for investors only looking to put a little money to work. Nevertheless, Gemini is a top crypto exchange, is easy to get started, and has all the features an investor would expect from an advanced trading platform.
If you're interested in buying Bitcoin specifically, give Binance.US a look. Binance (BNB -2.42%) is one of the world's largest crypto exchanges, but its primary offering is not available to U.S. investors. Binance.US is available with more limited features, though, and has one key differentiator: lower trading fees.
It's important to note that Binance has been dealing with regulatory issues in some countries, including probes into possible insider trading and market manipulation. This could cause issues for investors down the road (ease of withdrawing funds, for example) if the company winds up having some disciplinary action taken against it. Additionally, Binance isn't as easy to use as some of its peers, as it was designed with the advanced trader in mind.
However, the app for U.S. users is worth considering, especially after the company recently dropped Bitcoin trading fees down to $0 and the cost of trading other cryptos can be far less than its rivals.
No guarantees with trading crypto
There are other top crypto exchanges to consider, like SoFi and its app that also allows for stock trading and a full suite of digital banking services. There are also decentralized exchanges like Uniswap that allow for peer-to-peer trading with little to no fees.
However, whichever crypto trading platform you settle on, bear in mind the risks with investing in crypto. Buying the dip is not a guarantee you'll make money.
Though the crypto industry has come out of numerous crashes in the last decade or so, that doesn't mean every crypto asset will bounce back. There are thousands of digital asset and blockchain technology projects out there, and most of them have a high likelihood of going nowhere -- or worse. The crypto industry is a Wild West frontier in the investment universe at this juncture.
Investors interested in buying at this point should keep these risks in mind and invest accordingly. Remember that a crypto investment, if any, should be part of a diversified portfolio strategy.