Introduction to Bitstamp
Founded in 2011 as a European alternative to the Japan-based MtGOX, Bitstamp is considered by many to be a leading standard for cryptocurrency exchanges. Part of being highly competent and trusted, however, is having a thorough verification process, and while they do accept users throughout most of the world, there is no way to trade anonymously on Bitstamp, and KYC will be required before even a deposit can be made on the exchange.
Why Choose Bitstamp?
Recognized as a fair and honest exchange by many long-time crypto traders, Bitstamp sees about $200 million a day in trades, putting them in the top tier of all spot trading-only exchanges as far as volume is concerned. Bitstamp’s selection of supported coins is somewhat limited, but the trading pairs they do offer have tremendous liquidity. In addition, they are free of the frills of many newer exchanges and focus on delivering a quality trading experience for traders of any size.
Bitstamp is one of the most serious cryptocurrency exchanges and is known for strictly enforcing its rules. There is no way to get around their KYC process, and its completion is required to use any part of the site. They are heavily compliant with financial regulatory bodies in the U.K., Europe, and the U.S. but surprisingly available to almost the entire world. The only exceptions are countries on sanctions lists, such as North Korea, Iran, Iraq, Cuba, Venezuela, etc. Other than these exceptions, they leave it up to the user to trade by the laws of their jurisdiction.
Creating an Account on Bitstamp
When registering a Personal account on Bitstamp (the other option being a Corporate account), you will be asked to provide a first & last name and email address. After agreeing to the terms & conditions and continuing, you will be asked to verify your email by clicking a link sent to it. Next, you will be asked to generate a password. After doing this, you will be assigned a user ID, which identifies and access your account without having to enter an email address. It’s a good idea to store this user ID someplace safe along with your password, but not completely necessary as it will be emailed to you.
To use the exchange or access any part of it, you must complete the verification process.
Getting Verified On Bitstamp
After successful registration, you will be asked to provide the following information:
- Country of residence
- Home address
- Social Security Number
- Phone number (must be verified by entering a code sent by text)
- Government ID (passport, driver’s license, or other photo ID)
After entering in the required info and uploading a picture of your ID, you will be asked to take a selfie. If you don’t have a webcam, the system will instruct you to finish the task by scanning a QR code link with your cell phone. Finally, you will be asked to record a video of yourself, turning your head in the left or right direction and reading three digits aloud (this is used to confirm that you are the person on the submitted ID).
The next step will be to provide some basic financial information, including the following:
- Employment status
- Current profession/occupation
- Estimated annual salary
- Source of funds
After entering this info, you will be asked about what you plan to do with your Bitstamp account and how you obtained your funds (if depositing crypto). The final step will be adding 2-FA to your account using Google Authenticator. Only after 2-FA has been set up will Bitstamp begin verifying your account on their end. The verification process can take a few hours to a few days to complete.
In addition to all of the above, Bitstamp may request additional documentation to verify your source of funds, such as bank statements. They take a very rigorous approach to customer verification to remain fully compliant with the requirements of the many jurisdictions in which they operate.
How to Make a Deposit on Bitstamp
To make a deposit, click the “Deposit” tab in the menu items toward the top right side of the screen. Then click on “Bank Transfer” for wire (USD, EUR) and SEPA (EUR) deposits or “Cryptocurrency” for crypto deposits. Additionally, purchases can be made via debit/credit card with Visa, Mastercard, or Maestro.
- SEPA deposits are free and take 1-3 business days before funds can be credited to your account.
- International Wire transfer deposits are for customers outside the European SEPA zone and take 2-5 business days to clear. There is a 0.05% deposit fee or a minimum fee of 7.5 USD/EUR, with the greater of the two being applied, and a minimum deposit of 50 USD/EUR.
- Debit/credit card purchases have a fee built into the exchange rate after choosing which cryptocurrency you would like to purchase. At about 5%, this fee is relatively smaller compared to many other exchanges that offer this option.
How to Trade on Bitstamp
Bitfinex is relatively simple for trading options: no margin trading or fancy leverage products; just straight, old-fashioned spot trading. There are two types of trading screens available, which can be accessed by clicking the “Markets” tab or the “Tradeview” tab.
The “Markets” trading screen is the more straightforward interface. Simply select the coin pair you wish to trade and click the corresponding “Buy” button next to it. There are four types of orders here for buys:
- Instant. Simply enter the USD/EUR amount you wish to spend, and it will display the number of coins you will receive directly below.
- Market. This places a classic Market order which automatically buys the coin amount you have specified.
- Limit. This allows you to place an order below the current spot price of the coin. The order will remain open until the price moves to your specified Buy price and the order is filled in its entirety. You can also toggle a “Sell if executed price” option to sell your purchased coins if they reach a target price.
- Stop. With this, you can set an order to buy if the price rises to a certain level. Additionally, the “Trailing stop” toggle can be used to trigger a buy order that is lowered from the specified Buy price by the corresponding amount the price falls from where it currently is.
The “Tradeview” tab is the more sophisticated trading screen, complete with an order book, candlestick chart, and recent trades. In addition, it features a wide array of standard chart overlay options, including several TA indicators, drawing tools, and customization options. For example, set candles as default, the price can also be represented as bars, hollow candles, Heiken Ashi candles, a line, area, or baseline. Also displayed are open orders and order history.
Overview of Supported Coins
Unlike many other cryptocurrency exchanges of its caliber, Bitstamp has chosen to keep things simple over its nine years in operation and currently carries only seven different coins and tokens. Here is a list of these coins and pairings available to trade them against:
- Bitcoin (BTC) – USD, EUR, PAX
- Ripple (XRP) – USD, EUR, PAX, BTC
- Litecoin (LTC) – USD, EUR, BTC
- Ethereum (ETH) – USD, EUR, PAX, BTC
- Bitcoin Cash (BCH) – USD, EUR, BTC
- Stellar Lumens (XLM) – USD, EUR, BTC
- Paxos Standard Token (PAX) – USD, EUR
The exchange pairs with the highest volume are BTC/USD, ETH/USD, BTC/EUR, and XRP/EUR, which comprise about 80% of the exchange’s total volume daily. Additionally, those in Great Britain (U.K.) can trade GBP against all seven coins supported by Bitstamp, although the volume is not nearly as great as its USD/EUR counterparts. In all, 29 trading pairs are hosted on the exchange.
Bitstamp Trading Fees
Bitstamp has a flat 0.5% fee for new users and those who perform less than $10,000 worth of trades per month. For those who trade between $10k and $20k per month, the fee is 0.25%. For those who trade between $20k and $100k per month, the fee is 0.24%. The tiered fee system continues up to those who perform more than $10 billion in trades per month, at which point there is no fee. For a more detailed breakdown of Bitstamp’s fee structure, click here.
How to Make a Withdrawal On Bitstamp
To make a withdrawal, click on the “Withdrawal” menu tab and select the method of withdrawal you wish to perform (SEPA, Wire transfer, or Cryptocurrency). SEPA withdrawals incur a fee of 3 EUR and will generally take 1-3 business days to process. Wire transfer withdrawals typically take 3-5 business days and have a withdrawal fee of 0.1% or 25 USD/EUR, depending upon whichever fee is greater. The cryptocurrency withdrawal fee schedule for Bitstamp is as follows:
- Bitcoin: 0.0005 BTC
- Ripple: 0.02 XRP
- Litecoin: 0.001 LTC
- Ethereum: 0.001 ETH
- Bitcoin Cash: 0.0001 BCH
- Stellar: 0.005 XLM
- Paxos Standard Token: 0.5 PAX
Bitstamp is considered a very secure and honest exchange. However, in early 2015, they were famously the victim of one of the biggest bitcoin thefts of all time, losing approximately 19,000 BTC held in its hot wallet to hackers. Despite this record-setting security breach, Bitstamp managed to regain the community’s trust over the years by fully compensating all of their affected customers. Afterward, they switched to using a series of multi-signature wallets for day-to-day coin transfers so as not to allow a repeat incident.
Bitstamp takes the security of their users very seriously, which is why they have chosen to enforce rather strict KYC and verification controls. In addition to the mandatory 2-FA, which is required to conduct any sort of trading or withdrawals, Bitstamp has a variety of security measures that the user can employ. Among them are the ability to set a reminder to change your password once a month and choosing which coin withdrawals require email verification to process.
Bitstamp Mobile App
Bitstamp has a mobile app for both Android and iOS devices. The app allows access to just about every feature that the web version of the exchange offers and is generally considered pretty responsive and well put together compared to many other crypto exchange apps. Exchange features are split into five easily-navigable categories: Dashboard, Tradeview, Buy & Sell, Wallet, and Settings. It is also possible to register for an account via the app, but app reviewers have recommended that registration be done from a computer instead.
Benefits of Bitstamp Over Competitors
- Considered to be the standard for tracking the price of Bitcoin among serious crypto traders.
- Very secure, professional exchange built for handling large volume and amounts of money.
- Excellent liquidity for popular trading pairs.
- Available to traders in just about every part of the world.
Limitations of Bitstamp
- Very rigorous KYC and verification process that can sometimes take days to complete.
- There are a limited number of supported coins, fiat currencies, and deposit options for fiat currencies.
- No margin trading, derivatives, futures, or other crypto-related trading instruments.
- Trading fees are on the high end.
Wrapping it up
Bitstamp is one of the main pillars of the cryptocurrency exchange industry. They’ve been in business for over nine years, perfecting the craft of running an exchange and developing a reputation for being committed to good business practices along the way. Even though the verification process is cumbersome and fees are a bit high for smaller traders, dealing with both elements is still well worth it for those who value peace of mind knowing their funds are in good hands.
While Bitstamp doesn’t offer many trading options, the ones they do offer have tremendous amounts of liquidity, making it easy to buy and sell coins at a competitive price quickly. There are not many safer, more dependable exchanges out there, and this makes having a Bitstamp account a must for the arsenal of any serious cryptocurrency trader.