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Detailed overview of Bitstamp as a Cryptocurrency Trading Platform

 

WHAT IS BITSTAMP?

Bitstamp is a cryptocurrency or bitcoin exchange that was founded in 2011 by Nejc Kodrič and Damijan Merlak in Slovenia. Headquarters moved to the UK in April 2013 and then again in 2016 to Luxemburg.

Due to a lack of adequate financial and legal services provided in Slovenia, some of Bitstamp’s operations were outsourced to the UK.

When Bitstamp was incorporated in the United Kingdom, upon approaching the Financial Conduct Authority, or FCA, to obtain regulation, Bitstamp was turned down as it was not classed as a currency, resulting in Bitstamp not being subjected to regulation.

Due to this, Bitstamp started regulating itself and a set of best practices were put in place whereby customers would be authenticated, and money laundering was deterred.

Customer authentication was done by requiring that customers verify their identity through passport copies and proof of their residential addresses through official records.

The Luxembourgish government provided Bitstamp with a license to be fully integrated in the EU as a payment institution in 2016, through this, Bitstamp was permitted to conduct operations in all 28 EU member states.

 

HOW DOES BITSTAMP WORK?

Bitstamp, along with several other cryptocurrency exchanges operate in a similar manner in buying, selling, and trading of cryptocurrencies.

Once traders have successfully opened an account and verified their identity and proof of residence (should they be depositing funds through any other payment method apart from crypto wallets), and funds have been deposited, trading can commence.

Coins can be bought and sold, with a limit on the variations of coins that can be bought or sold on Bitstamp. Bitstamp itself is a third-party that acts as an intermediary between buyer and sellers of cryptocurrencies.

When purchasing cryptocurrency using Bitstamp, traders do not physically purchase it from the exchange, it is instead purchased from another person, with Bitstamp merely facilitating the transaction.

It works the same when buyers and sellers are matched with Bitstamp charging fees pertaining to trading. The beneficial factor in this is that Bitstamp can offer its services by using this method while avoiding any disturbances.

Bitstamp only offers the option to ‘go long’ in transactions and it means that while traders have the option of making profits should the trader believe or speculate an increase in a cryptocurrency’s value, the process cannot be repeated should the markets fall.

 

IS BITSTAMP REGULATED AND SAFE?

When joining a cryptocurrency exchange, traders need to ensure that the platform is safe and secure, by reading up on reviews and testing the platform, traders will be able to see what security measures are in place to protect client funds.

Cryptocurrency platforms often do not have a detailed history of keeping client funds safe and no Cryptocurrency exchange is immune to this. Cybersecurity issues exist and there are several regulatory issues when trading on such exchanges.

It is imperative to evaluate the security measures that these exchanges have in place so as to ensure that sensitive information such as personal details and banking details along with funds are not compromised.

In 2015, Bitstamp servers fell victim to hackers which resulted in the loss of more than 19,000 Bitcoin. When converted into paper currency at the time, it amounts to around $95 million in customer funds that was stolen.

Although Bitstamp already fell victim to hackers in 2014, these criminals were unable to retrieve client funds.

The safety surrounding Cryptocurrency exchange cannot be endorsed, the funds of traders are potentially at risk on future hacks.

Bitstamp has the following security measures in place in an effort and attempt to secure client funds:

  • Two-factor authentication, otherwise known as 2FA, when traders perform key account functions such as logging in and withdrawing funds.
  • Google Authenticator
  • Email Confirmations
  • Cold Storage is used in which 98% of client funds are held
  • Every year, accounts are audited by the ‘Big 4’ accounting firm

 

WHAT COUNTRIES DOES BITSTAMP SUPPORT?

Bitstamp is a global cryptocurrency exchange which allows traders from all over the world in opening an account. The benefit of this is that when traders deposit funds with a cryptocurrency, there are no restrictions on the country of residence.

Depending on the payment methods used to deposit funds, there are however some restrictions and when using debit or credit cards to make deposits there are some restrictions, although a variety of countries is still supported.

Some of the countries that are supported when making deposits by using Credit/Debit Cards include, but is not limited to:

  • Argentina
  • Brazil
  • Cayman Islands
  • Australia
  • Hong Kong
  • New Zealand
  • South Africa
  • Switzerland, and more.

 

BITSTAMP FEATURES

 

BITSTAMP PLATFORM DASHBOARD

The Bitstamp platform dashboard is easily accessible and easily navigated, although there is some complexity when using it to trade although the main functions of the dashboard can be accessed easily by clicking on the links provided at the very top of the page.

Once traders click on the button provided to ‘Buy or sell’, they are redirected to the trading area where they can select their preferred cryptocurrency pair that they wish to trade on the top and left-hand side of the page.

Bitstamp provides traders with the option of using ‘instant order’, allowing traders access to a more advanced area in which they can either buy or sell cryptocurrency.

Once the trader has selected the ‘instant order’, they will be redirected, and on-page instructions can be followed.

 

IS BITSTAMP EASY TO USE?

Yes, the dashboard is easy to use, but when trading, traders may be presented with some complexity.

 

BITSTAMP WALLET

Bitstamp offers third-party cryptocurrency exchange services and therefore does not have its own native wallet, which means that traders will have to store their funds on the online wallet provided by the platform.

Traders should note that this is not a secure way of storing funds and in the likely chance that the platform is hacked, their funds may be compromised along with sensitive information such as personal information and banking details.

In addition, due to the fact that Bitstamp does not offer a wallet, traders will not have access to their own private keys and reliance will be placed on Bitstamp in keeping trader’s funds safe.

 

BITSTAMP MOBILE APP

The Bitstamp Mobile Application was launched in 2019 and it is available for download on mobile devices that run both Android and iOS operating systems from Google Play and the App Store, respectively.

The mobile app provides traders with a variety of key account features such as:

  • Buying or selling cryptocurrencies
  • Viewing trading charts
  • Viewing account balances

In the unlikely chance that the trader loses their mobile device, the app can be disabled remotely from the desktop platform.

When downloading the mobile app, traders need to ensure that it is the official version as hackers are easily able to fabricate cryptocurrency exchange apps and load them onto mobile app stores, allowing them access to traders login credentials when they sign in.

 

LEVERAGE

Leverage is a tool provided to traders which allows them to open larger positions despite the initial capital in their trading account, or the current account balance of the trading account.

Leverage is a useful tool, when used correctly as it increases the chance of great gains but in retrospect, it also increases the chance of loss that may exceed the initial deposit of the trader.

When trading cryptocurrency through Bitstamp, leverage is not offered.

 

FEES

There are two ways in which Bitstamp makes money namely fees that are charged when trading on the platform in addition to fees charged when making deposits into the wallet.

For every trade that is executed, there is a 0.25% trading fee which is waived at the end of every trade, when the position is closed.

Professional traders who trade volumes of $20 million or more in a single month pay lower fees that can be decreased to around 0.10% per trade.

When compared to other cryptocurrency platforms, Bitstamp has significantly higher fees.

Deposit fees are charged according to the payment method which is used, and are as follows:

  • Debit Cards – a fixed fee of $10 is waived and should deposits exceed $10,000, there is a 2% fee waived.
  • Credit Cards – a fee of 5% is waived on the deposit amount along with additional fees should the credit card provider charge such.
  • SEPA – there are no fees charged when using this payment methods.
  • Bank Wire Transfer – a transaction charge of 0.05% is charged, or a minimum of €7.50 per €300 deposited.
  • When transferring cryptocurrency from one wallet into the Bitstamp Wallet, there are no deposit fees charged.

When withdrawing funds from the wallet, the only fees charged are applicable when using SEPA, during which a fee of €0.90 will be charged, and Bank Wire Transfer where there is a 0.09% fee, or a minimum of €15.

 

DEPOSIT AND WITHDRAWAL

Deposits and withdrawals can be done using the following supported payment methods:

  • Debit/Credit Cards (subjected to the list of supported countries)
  • SEPA, or European Bank Transfer
  • Bank Wire Transfer
  • Crypto Wallets

 

HOW TO OPEN AN ACCOUNT AND START TRADING

In order to open an account, traders can follow these steps:

  1. Navigate to the Bitstamp website and click on ‘Register’. The trader will be redirected to an online application that requires the provision of some personal information.
  2. The trader is required to provide full name, email address and country of residence. This information has to be correct as proof of identity and proof of residence must be provided to verify the account for security reasons.
  3. Before being allowed to proceed with the registration process, an email will be sent to the address provided for verification purposes.
  4. As soon as the trader has received the email, the embedded link can be clicked, and the trader will be provided with their unique account ID. This information has to be kept safe as it is necessary when logging into the Bitstamp account.
  5. When choosing a password, traders are advised that they ensure the password is as complex as possible without risking forgetting it, this is to ensure that hackers cannot easily access the trader’s account.
  6. As soon as the trader has opened their trading account, additional security features such as two-factor authentication can be set, and it requires a unique code sent to the trader’s mobile device to allow login and withdrawing of funds.
  7. In addition, the trader can also set the option for email confirmations to be activated when performing key account functions.
  8. In order to make deposits using a method other than cryptocurrency, traders need to verify their identity by providing a copy of their identity document along with a copy of their residential address which is not older than three months.
  9. As soon as the trader has followed the verification steps from their account, it will take up to 24 hours to receive confirmation of verification.

To make deposits into the account, the trader can navigate to ‘deposit’ on their account. Once this option has been clicked, the trader can select their preferred method from a drop-down list.

As soon as the method has been chosen, the trader can enter the amount that they wish to deposit followed by clicking ‘confirm’.

Once the account has been funded the trader can proceed to start trading buy simply clicking on the ‘buy/sell’ option and selecting the cryptocurrency pair that they wish to trade and follow on-screen instructions from there.

 

CRYPTOCURRENCIES

 

WHAT CRYPTOCURRENCIES DOES BITSTAMP SUPPORT?

There are only five cryptocurrencies that can either be bought or sold including:

In terms of trading cryptocurrencies, there are a total of 14 pairs which can be traded in addition to crypto-to-fiat pairs. Some of these include, but is not limited to:

  • BTC/USD
  • XRP/USD
  • BTC/EUR
  • LTC/EUR
  • BCH/BTC
  • ETH/EUR
  • XRP/BTC
  • LTC/BTC
  • ETHBTC, and several others.

 

CAN YOU ‘SHORT’ CRYPTOCURRENCIES AT BITSTAMP?

No. Traders only have the option to ‘go long’ which puts traders at a significant advantage should the markets fall.

 

CUSTOMER SUPPORT

Bitstamp customer support can be contacted via phone 24/7 right through the year, regardless of public holidays. There is also an option to contact support via email at any tie.

Unfortunately, the Bitstamp website does not support an Instant/Live chat function should trades need immediate assistance.

For general queries, traders can access the FAQ section provided on the website.

 

BITSTAMP SUMMARY

BITSTAMP AT A GLANCE

Crypto Trading Platform Name Bitstamp
Headquartered Luxembourg, EU
Year Founded 2011
Regulating Authority None – Licenced through Luxembourg government
Contact Number +44 20 3868 9628
E-Mail Address [email protected]
Website https://www.bitstamp.net/
Maximum Leverage Leverage is not offered
Minimum Deposit No minimum deposit indicated
Deposit Options Credit cards, Debit Cards, SEPA, Bank Wire Transfer, Crypto wallets
Withdrawal Options Credit cards, Debit Cards, SEPA, Bank Wire Transfer, Crypto wallets
Platform Type Cryptocurrency exchange
Platform Languages English – no other languages indicated
OS Compatibility Web browsers, Android, and iOS
Customer Support Languages English – no other languages indicated
Customer Service Hours 24 hours, seven days per week

PROS AND CONS

PROS CONS
Accepts the most popular payment methods Only 5 cryptocurrencies available to trade
Available to all countries when making crypto deposits Inability to ‘go-short’
24/7 Telephonic support Trading and deposit/withdrawal fees are high
Variety of charting tools available There is no instant/Live chat facility offered
Popular cryptocurrencies offered History of hacks
Mobile application available Verification is slow
No native wallet offered

 

WHAT ARE THE BENEFITS OF USING BITSTAMP?

Bitstamp stands out from amidst its competitors due to the following benefits:

  • Advanced functionality along with options that facilitate professional trading. The interface is feature-rich and caters for both beginner and professional traders.
  • The platform offers traders a variety of balances that can be viewed in addition to different charts that can be used to ensure operational effectiveness.
  • The mobile app provided can be used on either Android or iOS mobile devices and functionality is similar to that of the desktop version with complete and flawless integration on both versions.
  • Bitstamp offers a variety of ways in which to secure client funds and accounts. Bitstamp complies with regulations and offers customer protection to ensure that client security and funds are not compromised by providing cold storage of funds.
  • Although the fees are higher than other exchanges, the service that Bitstamp provides attracts numerous new clients. Fees are charged according to trading volumes, encouraging higher volumes to pay less fees.
  • Bitstamp can be accessed by over 60 countries around the globe.
  • Customer support is offered via telephone and email, in addition to a FAQ section on the website.

 

FAQ

Fees

What is Bitstamp’s costs?

Fees per trade depend on the cryptocurrency being traded, with costs from as little as 0.0% when trading volumes greater than $10,000,000,000.

What is Bitstamp’s Maximum Trades/Orders:

There are no maximum orders when buying/selling or trading cryptocurrencies.

What is the minimum deposit amount on Bitstamp?

There is no minimum deposit when opening an account with Bitstamp.

What mediums can be used for deposits into a live account?

Credit/Debit Cards, SEPA, Bank wire Transfer, and crypto wallets.

What are the withdrawal fees on Bitstamp?

When withdrawing funds from the wallet, the only fees charged are applicable when using SEPA, during which a fee of €0.90 will be charged, and Bank Wire Transfer where there is a 0.09% fee, or a minimum of €15.

Minimum Deposits

What is the minimum deposit for Bitstamp?

There is no minimum deposit when opening a Bitstamp account.

How do I make a deposit in Bitstamp?

  1. Log into the Bitstamp Account and select ‘deposit’.
  2. Select the payment method from a drop-down list.
  3. Enter the amount to be deposited and select ‘confirm’.

What deposit methods/options are available at Bitstamp?

Credit/Debit Cards, SEPA, Bank wire Transfer, and crypto wallets.

What documents are required to deposit money into a Bitstamp account?

Proof of identification and residential address have to be verified when making deposits using any payment method other than a crypto wallet.

How long does it take to make a withdrawal?

When using payment methods such as Credit/Debit Cards and crypto wallets, withdrawals can be instant, but when using bank transfer avenues such as SEPA and Bank Wire, withdrawals can take between two to several days to reflect.

Author Details

Louis Schoeman

Louis Schoeman

Featured Forex and Stocks writer

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