What are the top crypto exchanges by market capitalization?

18 March, 2019

As an online gambler we suspect you are also somewhat familiar with the idea of using something like Bitcoin to fund your casino account. Around the world there are others who invest in Bitcoin and similar platforms the same as they would stocks, bonds, etc. It turns out you all have one thing in common: the cryptocurrency exchange.

Buying and selling cryptocurrencies takes place on the exchanges. There are not as many exchanges as there are cryptos, but there still are plenty of them. We will introduce the top six in this post, starting with a brief explanation of how an exchange works - just in case you are not familiar with the concept.

Buy, sell, invest

The easiest way to explain a cryptocurrency exchange is to compare it to a stock exchange. Let us say you want to buy 10 shares of Amazon stock. In addition to needing more than USD $10,000 to make the purchase, you would also need access to the NASDAQ stock exchange. This is typically done through a broker.

You contact your brokerage and instruct them to buy your Amazon shares. They contact the NASDAQ system - a computer system that buys and sells shares - to submit your order. It is filled and you are the proud owner of 10 shares.

A cryptocurrency exchange works in a similar fashion. The biggest difference is that there are no brokers involved. Buyers and sellers set up their own accounts on the exchange, thus facilitating business between one another without the need for a brokerage to handle trades.

Some exchanges work exclusively like stock exchanges inasmuch as buyers and sellers are not dealing with one another directly. Rather, the exchange facilitates transactions by acting as an intermediary. Other exchanges do allow direct buying and selling between individuals.

You can use an exchange to buy coins, sell coins, or even build a crypto investment portfolio. It is really up to each individual how he or she wants to use an exchange.

Top exchanges by market cap

With our brief explanation out of the way, let us talk about the top exchanges on the market right now. We think the best way to rank them is by market capitalization, which is to say how much investment money they have backing them up. Note that the rankings below are based on market cap at the time this post was written. Like cryptocurrencies, exchanges can move up or down in the rankings on a daily basis.

1. LBank - $881 million

LBank may be the biggest cryptocurrency exchange you have never heard of. Established in 2016 as a digital asset trading platform, LBank is a Hong Kong-based exchange that deals in all of the major coins including Bitcoin (BTC), Ethereum (ETH), and others.

According to the exchange's own website profile, its core team is made up of professionals from the financial and IT sectors. Some members of the team also have extensive experience in renewable energy, cryptography, and blockchain development.

Users can access LBank through an Android or iOS app, or through any modern browser on a desktop or laptop PC. Their browser-based site looks very much like a standard trading platform dealing with stocks and bonds. You can track all of your favorite coins in real time, schedule limit orders, look into research data, etc.

2. Binance - $800 million

In second place and close behind LBank is Binance, one of the most well-known exchanges on the market. It is worth noting that their 7- and 30-day volumes are just about double those of LBank, despite having less market capitalization. But that is another discussion for another blog.

Binance is more or less a household name among cryptocurrency investors. It was established in 2017 by a number of Chinese investors who quickly decided to move company headquarters and service to Japan. In just a few short months following the move, Binance quickly grew to the largest cryptocurrency by volume in the world. Then just a year later Binance received a Japanese regulator warning prompting it to move to Malta after being invited by the Maltese government to review an upcoming bill that was crypto-favorable.

As for the company, they are not satisfied to just run a cryptocurrency exchange. They are also involved in developing blockchain technologies that they hope will provide critical infrastructure that will support the cryptocurrency concept worldwide. In addition to their exchange, they also offer a digital wallet service, a blockchain academy, and a lot more.

3. OKEx - $705 million

Next up is OKEx, one of a number of exchanges based in Hong Kong. OKEx built its reputation on offering a vast selection of coins in addition to its own crypto. Fans of this particular exchange like the fact that large volume traders actually have a voice in determining the exchange's direction.

OKEx is also known to offer very low transaction fees compared to some of the other exchanges. They also allow margin trading and short selling as well. For all intents and purposes, they are the 'working man's exchange' with an easy to use platform and very reasonable fees.

4. BW - $625 million

The BW exchange is more cryptocurrency network than pure exchange. Yes, you can buy and sell all of the top cryptocurrencies here, but BW does a lot more. For example, they supply services to cryptocurrency miners from 45 countries and regions. They have created a combined mining pool that has produced millions of coins worth more than $3 billion.

Even more interesting is the fact that BW was acquired by Collinstar Holding in 2017, facilitating a transformation into the first point-of-sale (POS) mining community with the ability to trade digital asset contracts within its pool.

The most striking aspect to BW's business model is their commitment to continually giving 51% of the value of the exchange back to the community through the mining pool. This means that the community of users who actively trade on BW ultimately control most of what it does.

5. ZB.com - $585 million

Established in 2017, ZB.com is a lesser-known cryptocurrency exchange registered in Samoa. A look at their website reveals very little information about what the company does beyond on the cryptocurrency space. In addition to their own coin (ZB), they deal in all of the major cryptocurrencies including BTC, LTC, ETH, BTC, XRP, and so on.

6. DigiFinex - $557 million

DigiFinex was founded in 2017 and is headquartered in Singapore. In addition to all of the major cryptocurrencies, this exchange also deals in stable coins. It originally made a name for itself by trading against the Tether coin, a coin that was linked to the value of the U.S. dollar. Although they no longer deal in Tether, DigiFinex still has a few stable coins in its portfolio.

DigiFinex is a lot like most of the other exchanges in that the people behind it are all financial and IT professionals. Its core team consists of blockchain enthusiasts who believe in the power and future of blockchain to shape financial markets.

What about Coinbase?

By now you might be wondering where Coinbase is on our list. After all, isn't Coinbase the most popular exchange of all? Yes and no. Before we get to that explanation however, it is more important to note that Coinbase is a privately-owned company. That makes it impossible to rank them by market capitalization. The market cap designation only applies to publicly traded companies for ranking purposes.

Having said all that, Coinbase was originally established in 2012 as a digital wallet service. They went on to create an exchange platform whereby users can buy and sell coins. So in that sense, we can say that Coinbase is an exchange. And it is a very popular one.

You can put the Coinbase app on your smartphone or tablet and start buying coins right away. Just exchange fiat for bitcoins and you are off and running. Within minutes you could be depositing digital coins into your online casino account and playing MegaMoolah.com or other jackpot games.

On the other hand, there are some in the cryptocurrency community that do not see Coinbase as a legitimate exchange. Rather, they see it as a digital wallet provider that also happens to allow users to buy and sell coins. They have a legitimate point inasmuch as your selection of coins on Coinbase is rather limited.

There are literally thousands of cryptocurrencies out there. Coinbase offers just 10 coins, several of which are stable coins. So while you can buy and sell BTC, ETH, BCH, and a few of the other big names, you can't buy lesser traded coins like XMR (Monero), DASH, and EOS.

Some of their other services make Coinbase an attractive option for people who just want to buy and sell coins for everyday business transactions. For example, you can store your coin in a Coinbase wallet. You can purchase stable coins backed by U.S. currency.

In summary

We have given you a lot of technical information in this post about cryptocurrency exchanges. The most important thing to know at the end of the day is that the exchange is where new cryptocurrency users typically buy their first rounds of coins. If you are new to crypto, we recommend you read some of our other posts about exchanges to learn the ins and outs of buying and selling.