Bitstamp Exchange Review
Bitstamp is a well-respected exchange that gets credited with being one of the most reliable exchanges with some of the lowest transaction fees.
The exchange is better suited for intermediate to advanced users investing with larger amounts of capital, and may be a bit too complex for beginners. There are limited payment methods, and Bitstamp charges pretty high deposit fees on small amounts of money.
Bitstamp Key Information
|Site Type||Cryptocurrency Exchange|
|Company Location||Luxembourg, Luxembourg; Slovenia|
|Deposit Methods||Bank Transfer, Credit Card, Cryptocurrency|
|Withdrawal Methods||Bank Transfer, Cryptocurrency|
|Available Cryptocurrencies||Bitcoin, Litecoin, Ethereum, and Ripple|
Bitstamp is one of the oldest Bitcoin exchanges and has been around since 2011. That mean’s Bitstamp has seen a lot go down in the cryptocurrency world, and has been able to adjust as necessary.
The only thing really stopping Bitstamp from being much more competitive in terms of popularity is that its user interface isn’t as intuitive as its competitors, as well as the lack of convenient payment methods.
If you’re looking to trade with larger sums of money, Bitstamp is an excellent tool for you. Be sure to utilize a wire transfer so you don’t eat as much of the fees as you would on other similar exchanges.
Bitstamp was originally founded as a European-based exchange and alternative to Mt. Gox, which was the more popular exchange at the time.
If you aren’t familiar with Mt. Gox, it was a massive exchange based in Tokyo that handled roughly 70% of all bitcoin transactions at one point. The Mt. Gox story ended in infamy as over 850,000 bitcoins (valued at $450 million at the time) suddenly went missing due to a hack.
Anyway, it’s useful to understand the whole Mt. Gox situation because it helps us appreciate exchanges such as Bitstamp.
Bitstamp, based in Luxembourg, allows trading between USD and EUR for a variety of cryptocurrencies including Bitcoin, Litecoin, Ethereum, and Ripple.
As a European-based exchange, Bitstamp enjoys popularity among many Europeans cryptocurrency traders. It’s very convenient for European users to deposit Euros.
Bitstamp also offers its API to allow users to create custom software to access and use their accounts.
The court of public opinion shines a fairly positive light on Bitstamp. Since it has been around for awhile, we looked at some of the more recent reviews to paint a more contemporary picture.
The Positive: People love the low trading fees of .25% or lower. Europeans prefer to use Bitstamp because you can deposit Euros with SEPA for free. You also don’t have to pay a transaction fee when withdrawing BTC. There are claims that the Bitstamp customer support is notably better than on many other exchanges, but can still be very slow. Once a trade has been entered, it is extremely quick. The analytics are compared to those of typical trading floor analytics. Additionally, Bitstamp is licensed.
The Negative: Depositing money via credit card can be obscenely expensive. This is pretty standard among most cryptocurrency exchanges. Avoid using your credit card on any exchange or eat some pretty steep fees. The verification process can take a bit long, but this is mostly due to the massive influx of cryptocurrency traders. The amount of tokens is a bit limited (BTC, LTC, XRP, and ETH) in comparison to some more diverse exchanges out there. One thing that has a few people fuming is that wiring money out of Bitstamp to European banks can be a pain, since many European banks don’t allow transactions with Bitcoin-related companies. This isn’t so much Bitstamp’s fault, but they still get some heat for it.
Is Bitstamp Safe?
Bitstamp is one of the most secure exchanges out there.
While Bitstamp is considered extremely reputable and reliable, it has not been without its unfortunate events. It’s important to look at how the Bitstamp handled these events, as the cryptocurrency exchange industry has traveled a pretty bumpy road.
On February 2014, Bitstamp had to suspend withdrawals for a few days due to threats of a DDOS attack by hackers. The hackers supposedly sent CEO Nejc Kodrič a ransom demanding 75 bitcoins.
Kodrič pulled a power move and refused the ransom on the grounds that his company does not negotiate with terrorists. After restoring service, Bitstamp suspended withdrawals as a security measure.
On January 2015, Bitstamp chose to suspend its service for about a week after it was hacked for 19,000 bitcoins. Not ideal, but definitely not near the cataclysmic 850,000 bitcoins that got hacked from Mt. Gox.
You might look at these events and feel a bit uneasy, but please realize that with each security threat comes a new wave of security precautions to ensure the safety and security of users. Since the hack in 2015, things have been relatively smooth for Bitstamp.
Bitstamp keeps around 98% of all of its coins in cold wallets and keeps its customers’ funds offline in secure vaults. The rest is kept for live trading via the exchange.
Bitstamp sets the standard for best security practices with its fully insured cold-storage, Two-Factor Authentication (2FA), and mandatory confirmation emails. Bitstamp offers email and SMS alerts. It also uses PGP (Pretty Good Privacy) data encryption to authenticate all the uploaded files.
Bitstamp Trading Fees
Bitstamp’s deposit and trading fees hang around on the lower side of what exchanges charge.
International wire deposits have a .05% fee with a minimum of 7.50 USD/EUR. These take anywhere between 2-5 days.
International wire withdrawals have a .09% fee with a minimum of 15.00 USD/EUR. The minimum you can withdraw via international wire is $50 USD/EUR, with about 2-5 business days to complete.
The minimum trading amount is $5. Bitcoin trading fees cost .25% for monthly volumes less than $20, with the percentage dropping with an increase in volume down to .10% for a monthly volume of $20 million. A few of the fees are as follows:
.24% for less than $100,000
.22% for less than $200,000
.20% for less than $400,000
.15% for less than $600,000
.14% for less than $1,000,000
As you can see, Bitstamp is better for high-volume traders, so take note of how much you plan to trade. To see the full breakdown of their trading fees, check this out.
A notable feature of Bitstamp is that you don’t have to pay transaction fees when withdrawing BTC. This is super useful if you want to trade alt-coins on different exchanges because those small BTC withdrawal fees will eat into your margins. Bitstamp accomplishes this by aggregating your payment with a bunch of other payments, and then they cover the fee for you.
It seems that customer support is really a toss up for many cryptocurrency exchanges. Some people claim that their issues got resolved in a few hours, while others claim it has taken them weeks just to get an email back.
Your best bet is to make sure you 100% know what you’re doing when depositing funds and are aware of all the fees and limits so you don’t get into a situation where you need to contact customer support.
Once you become a member, Bitstamp customer support can be found here.
Final Thoughts – Bitstamp Exchange Review Summary
Overall, Bitstamp is a fairly good option for intermediate to advanced high level traders, especially those living in Europe.
If you’re just getting started, Bitstamp might not be the best option for you. The fees associated with smaller volume trades make Bitstamp a more expensive exchange, and for fees that high you would be better off with an exchange that offers a simpler and easier to understand UI.
Be sure to familiarize yourself with the Bitstamp policies and fees before making an account, and watch a few tutorials on how to use it. This way you can avoid having to interact with their customer support, one of the main causes of pain for many of their uses.
Other than their customer support blemish, Bitstamp is a pretty good exchange.
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ABOUT THE AUTHOR
Alex Moskov is the Founder and Editor-in-Chief of CoinCentral. Alex leans on his formal educational background (BSBA with a Major in Finance from the University of Florida) and his on-the-ground experiences with cryptocurrency starting in 2012. Alex works with cryptocurrency and blockchain-based companies on content strategy and business development. He privately consults entrepreneurs and venture capitalists on movements within the cryptocurrency industry.
His writing has been seen in The Hustle, VentureBeat, Yahoo Finance, Harvard Business Review, and Business Insider. His articles on CoinCentral have been cited on publications like Forbes, TechCrunch, Vice, The Guardian, Investopedia, The Motley Fool, Seeking Alpha, and more.
He also regrets not buying more Bitcoin back in 2012, just like you.
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