BitStamp Exchange Review

/BitStamp Exchange Review

BitStamp Exchange Review 2018-05-22T15:40:07+00:00
BitStamp Exchange Review

BitStamp Review: Best place to turn FIAT to Crypto?

Quick inner navigation:

  1. What is Bitstamp?
  2. How to use Bitstamp?
  3. Is Bitstamp safe?
  4. Trading on Bitstamp
  5. Bitstamp Fees
  6. Bitstamp Verification

When you consider the fact that decentralized forms of money like cryptocurrency are not regulated by any central body, it’s expected that centralized exchanges will also be non-existent. But in the age we live in, the reverse is the case. And if you have any experience trading digital currency, then you will agree that centralized exchanges are indispensable (at least for now) and form an important step in cryptocurrency trading.

What is Bitstamp?

Bitstamp happens to be one of the many cryptocurrency exchange platforms in the block. And if reputation and experience is anything to go by, then this company certainly deserves to be numbered among the top players. But even then, they’ve also got their flaws and as such, many areas they need to improve on.

Bitstamp came on the scene in August 2011, two years after the first decentralized cryptocurrency, bitcoin, was created. And ever since then, the company has grown to become one of the largest bitcoin exchanges with over 700k traders from various parts of the world.

  • By volume, Bitstamp currently ranks among the top cryptocurrency exchanges in the industry and actually came close to being first in 2016.
  • The founders of the company are Damijan Merlak and Nejc Kodric, who also happens to be the current CEO of the company.
  • Bitstamp was originally established to compete with Mt. Gox, a Japanese based cryptocurrency exchange. However, while Mt. Gox focused on the Japanese market, Bitstamp taught it better to take their business to Europe. And today they’ve successfully plunged into the European market allowing trading in USD and even EUR transfers.
  • Although now based in Luxembourg, Bitstamp started operation in Slovenia, which was also the native country of the founder, Nejc Kodric. The company later moved to the UK in April 2013, due to lack of financial and legal services in Slovenia to support their business. Unfortunately, they still encountered the same problem in the UK after they were denied license by regulatory bodies because bitcoin was not yet recognized as a currency in the UK.
  • Bitstamp eventually relocated to Luxembourg after they reached an agreement with the government. And now their exchange is fully licensed to and registered as a legal payment institution. So they can now operate in all 28 EU member states.

Trading on Bitstamp

Although Bitstamp allows trading in USD and transfers in EURO, the main exchange is in cryptocurrencies. However, they support only four coins: Ethereum, Ripple, Bitcoin, and Litecoin. While this may not be close what is offered on some large exchanges, it’s still worth the catch since they contain the three major altcoins.
And even if you’re interested in trading other altcoins, Bitstamp may still serve as you “take-off” point. You can still get your cash to Bitstamp and convert it into any one of the three major altcoins, then transfer the coins to another cryptocurrency exchange that supports the coin you have in mind.
Apart from other cryptocurrencies, Bitstamp also accepts traditional payments via Credit Card, Debit Card, and bank transfer, which is a very big advantage. Credit card transfers are usually instantaneous while charges on bank transfers normally depend on the bank involved.
If your bank is one of EU clients, then making transfers will be easier and faster due to SEPA support. However, it may attract higher fees than those charged on traditional bank transfers.
Bitstamp doesn’t support margin trading and there are no minimum deposits (at least none is specified for now).

Bitstamp Fees

You may find Bitstamp fees structure a little bit confusing if you’re not really into buying and selling of cryptocurrencies. This is because the exchange is mainly geared towards traders. Commissions can be as high as 0.25% per cash to coin transaction if you’re not buying in bulk. However, you receive a volume discount when you trade more. This discount usually takes effect for transactions involving more the 18k EUR monthly volume. You can pay as low as 0.1% fee when you trade with 18m EUR.
Bitcoins purchases up to 500 EUR or 500 USD with

Credit cards usually attract an 8% fee, while a flat fee of 0.2% is charged on transfers from your Bitstamp account to your credit card. Deposits through SEPA are usually without any charges while withdrawals attract a fee of 0.9 EUR per transaction.
As expected, making bitcoin deposits and withdrawal on Bitstamp is free.

Bitstamp Verification

Verifying an account with Bitstamp is pretty extensive. The following information is usually required:

  • Full name
  • Date of birth
  • Country of residence
  •  Phone number
  •  Address verification
  • ID number and a scan of photo ID document
  • Account verification may take up to 3 days.

Is BITSTAMP safe?

  • Community trust- Are they reputable?

So far, Bitstamp has been able to maintain a strong reputation and in spite of a significant theft that saw them lose around 19k BTC in 2015, an amount estimated more than $5m at the time of the theft. Such a misfortune could have been the end for many exchanges. However, Bitstamp showed true character and commitment to their clientelle by ensuring no customer lost any deposit fund and instead decided to pay for the losses with the company’s profits.
While such an event can make you feel a bit uneasy, it’s not uncommon with cryptocurrency exchanges. The most important thing is that Bitstamp has been able to maintain a smooth service after the hack. This has earned the company a great deal of respect and credibility from their clientele and the crypto-community.

  • How safe is Bitstamp?

As far as exchanges go, Bitstamp is a pretty safe place to buy and trade currencies, and also store a large volume of funds. Although they suffered a major bitcoin hack which claimed a good part of their reserves, their customer-first approach in handling the situation shows they can really be trusted. Perhaps, many large exchanges have faced similar problems and it was their clientele recovery that was most important.
Apart from all the verification they’ve in place, Bitstamp offers a 2-factor authentication which protects users account and prevents hackers from breaking in with just a password.
Up to 98% of the coins on Bitstamp are kept in cold wallets while the rest are held online for live trading. A cold storage simply means that the coins are stored offline where they can’t be hacked. It may also interest you to know that Bitstamp is regulated by CSSF, a financial regulatory authority in Luxembourg; another guarantee that your fund is secure.
Such security protocols should not only make you feel safe but also confident. You should be wary of any exchange that doesn’t implement something similar.

  • Customer support

Though the customer support from Bitstamp is still a bit far from being perfect, they have shown some promises. They show so much zeal in wading off fraud; even though their intention is often misinterpreted by customers with account closure issues.
The company offers email as their major means of communication. However, sometimes, they can engage customers directly on social media; which is pretty cool.

  • Handling speed

Though Bitstamp promises speed in attending to customer queries, this may not always be the case. While some people have gotten their issues resolved in a matter of hours, some have had to wait for weeks before they even got any reply to their email. This is certainly one area the company needs to improve on.
So your best bet is to avoid getting into a position where you will need help, or else be prepared to wait for sometime (though not always the case). Whether you’re making a deposit or withdrawal, make sure you understand the requirements before you proceed, to avoid getting hitched at a point.

How to use Bitstamp?

To Register a New Account-

  1. Open the company’s website on your mobile or browser.
  2. Click on REGISTER on the top right menu. If you’re already a customer, you can use the login link to log into your account.
  3. Next, a registration page will appear where you will be required to enter some basic information about your basic information. Don’t forget to agree to the terms and conditions. Once you are done filling the form, click on the REGISTER button below.
  4. You will receive an email to verify your new account. The email will come with a username and password which you can use to access the website.
  5. Once you’re login with the password and username on the site, you will be required to complete the 2F authorization. You can then update your password. An OTP will be given to you to enter.

To Trade bitcoins

  1. Log into your account and click deposit in the main menu, then select the type of deposit you wish to make. There are two main choices: Bitcoins you wish to sell or currency you wish to spend on buying bitcoins.
  2. After you successfully funded your account, it is time to trade. Click trade (Buy/Sell) in the main menu. There are two types of orders: instant and limit orders.
  3. Instant orders are very simple to use, but limit orders give you the power of setting the price you wish to pay or get for your bitcoins. It is up to you to decide which one to use.
    For more info, visit Bitstamp FAQ page.

Bitstamp Review Summary

No doubt, Bitstamp is a reputable cryptocurrency exchange that has demonstrated much credibility over the years which has earned them interests from a good number of big investors. But considering the fees they charge for most small volume trades, they might not be the best option for beginners. So except you are an intermediate or advanced user, you are better off with a less expensive exchange.
Their customer support might not be the best, but they are not bad either. And on the security of your coins, Bitstamp does a pretty good job in keeping most of their reserve offline where it’s safe from hackers.
Overall, the exchange is a good one, though they could improve their customer support and offer more exotic altcoins.

Pros

  • Licensed by Luxembourg
  • Cold storage for most coins
  • Accepts cards and bank transfers
  • Safe and secure exchange

Cons

  • Offers few altcoins
  • High fees on small volume purchases

Thank you for reading our review for Bitstamp. For more info.

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