Bitstamp Review: What You Need to Know Before Trading
Bitstamp is one of the longest-standing crypto exchanges, offering an easy-to-use and highly secure service since 2011. It offers users the ability to trade the world’s major cryptocurrencies including Bitcoin, Ethereum and many more. With locations in the USA and Europe, Bitstamp is a highly trusted and reputal exchange within the industry.
One of the oldest and most respected cryptocurrency exchanges in operation today is Bitstamp.
You may have heard of them, especially if you’re a resident of Europe. Bitstamp began operations in 2011, not long after the creation of Bitcoin, and it has since been positioning itself as a top European cryptocurrency exchange, while expanding its user base across the globe. In addition to its global user base, it also has offices in Luxembourg, London and New York.
In this Bitstamp review, we will take you through the Bitstamp platform step by step. We will also take a deeper look at important features, security procedures, fees and customer support.
With that being said, let's jump right in.
In 2011, Damijan Merlak and Nejc Kodric founded Bitstamp in Slovenia to cater to European Bitcoin enthusiasts. At the time the exchange was meant to be an alternative to the dominant Mt. Gox exchange.
As Bitstamp grew it later opened offices in the U.K. in 2013 and then in Luxembourg in 2016. Since then it has also added a London and New York office to continue providing excellent service to its growing global user base.
Bitstamp is most popular with intermediate and experience cryptocurrency enthusiasts, and is used as a way to purchase more established cryptocurrencies with fiat currencies. Bitstamp offers low fees, and has been acknowledged as an excellent way to exchange large amounts of digital currencies.
Bitstamp was once one of the top cryptocurrency exchanges, handling up to $700 million in daily trading volume, but it has since dropped considerably as the market has become flooded with new exchanges.
As of May 2018 Bitstamp is #22 in trading volume, handling roughly $90 million a day in trading volume. Over half of that is BTC/USD trades, with another roughly 10% each being taken by ETH/USD and BTC/EUR trading.
Is Bitstamp Safe?
Exchange safety is one of the most important questions for the user. Cryptocurrency exchanges are prime targets for hackers and we have seen quite a few examples recently from Mt Gox to Coincheck.
This is also a particularly touchy point for Bitstamp as they also suffered hacks in 2014 and 2015. In the 2015 Hack, the attackers managed to extricate 19,000 BTC which is actually one of the biggest cryptocurrency exchange hacks ever.
Although these hacks did happen, they were as a result of phishing attempts that managed to dupe exchange employees. They were not as a result of technological failures.
Moreover, it is important to look at the steps that the exchange has taken since then and how they have improved their security. Let's take a look at some of the security policies of Bitstamp.
Exchange Wallet Security
Bitstamp uses some of the best practices when it comes to cold storage of their cryptocurrency assets. What this basically means is that they keep the majority of their coins off line in an air-gapped state.
This means that they inaccessible to hackers as they are not connected to the internet. These will only ever be accessed and withdrawn from when they are running low on coins that they keep in their "Hot Wallet".
Hot wallets are those wallets that are connected to their servers and facilitate transactions for the users. In terms of the security procedures that are implemented in this case, they make use of advanced multi-sig wallets.
This means that these wallets can only ever send a transaction if they are signed by multiple keys. Essentially, there will have to be a number of staff at Bitstamp that will sign these transactions.
This is also why the hackers would not be able to steal funds again in the case of a phishing attempt. They would have to obtain all of the keys from all of the participants to sign out the transactions.
Of course, there is always the risk that user's accounts can get hacked. Hence, Bitstamp has a number of features which protect users and decrease the chances of a hacker ever being able to compromise their accounts.
The most important of these is no doubt the two-factor authentication. This has become quite standard on exchanges these days and is an added layer of security. These are not required as default on Bitstamp so it is advised that you enable this.
Also, if ever you are to send funds out of your online wallets, Bitstamp will need confirmation via email as an additional security feature.
However, despite all of these protections that are put in place, you always want to use security best practices and never store a large amount of coins on the exchange. As the saying usually goes: "if you don't hold the keys, you don't own the coins".
Lastly, because Bitstamp deals with sensitive information like identity documents and account passwords, they have to make sure that all of the communications are secure.
Hence, they make use of the most advanced standards in AES 256 encryption for connections to their server. You can confirm this by observing the green "SSL" padlock in your browser when you visit Bitstamp.
Moreover, when you are uploading your documents to the site then they are stored using PGP encryption. This means that even if hackers were to make their way into their servers your information is safe.
All of these security features mean that since the 2015 hack Bitstamp has been free of any further hacking instances, and is considered as one of the most secure exchanges.
Something that many cryptocurrency traders will appreciate about Bitstamp is their low and transparent fee structure.
Traders are charged three types of fees. These are deposit, trading fees and withdrawal fees (network fees).
If you already have funds on the exchange then you will be charged a percentage fee for the amount that you are trading. This is tied to the amount of volume that you have traded in the past 30 days and follows a sliding scale.
Below is that fee schedule that Bitstamp charges:
|30 Days USD Volume||Fee|
While most traders would fall into the above category, larger institutional traders that could be a market maker could request for maker fees if they were to contact support.
Funding / Withdrawal Fees
If you were going to send funds to Bitstamp, then they will differ according to the method that you used to fund your account.
If you are sending your funds via a SEPA transfer in Euros then you will not pay any fees. You will only have to pay a 0.90 EUR withdrawal fee when you make the request from Bitstamp.
However, if you do not have an EU bank account and would like to pay via an international wire transfer then you will pay a 0.05% deposit fee (minimum fee of $7.5). If you were to withdraw via a wire then you would have to pay a 0.09% fee with a minimum fee of $15.
If you were to buy your coins with a credit or debit card then you would pay a flat 5% fee. This is a little bit on the higher end for a card purchase compared to other solutions such as Hodly and Coinmama.
Lastly, when you are withdrawing in cryptocurrency, then Bitstamp will not charge you a fee. You will, however, have to pay a network fee that is the amount which will go to miners to process the transactions.
Customer support is usually one of the most important boxes an exchange must tick. We all know how frustrating it can be when you have to wait four ages for support tickets to get answered.
To that end, we really have to compliment the customer support at Bitstamp.
Firstly, they have an extensive FAQs section where you can ask all your questions. However, if there is a question that you had that was not on the FAQs or you had a specific account question then you can use their ticket system.
Bitstamp will usually get to your ticket in the space of an hour or two. This is drastically shorter than it is with many other comparable exchanges.
Another really impressive addition at Bitstamp is the telephone support option. Below are the telephone support numbers for the respective countries:
- London: +44 20 3868 9628
- North America: +1 646 568 9784
- Luxembourg: +352 20 88 10 96
We actually tested the customer support line to make sure that it was indeed live and they were responsive (which we can confirm).
This ties in nicely with the above point on customer service as verification is required before trading and is conducted by the team at Bitstamp.
Why is verification required?
This is because there are new EU policies that are requiring exchanges to run proper KYC procedures on their clients. This is something that even previously anonymous P2P exchanges such as Bitcoin cash have started to implement.
Hence, if you were looking to buy Bitcoin anonymously then you will have to look for other alternatives.
If, however, you would like to get fully verified on Bitstamp then all they will require from you is a form of ID as well as a Proof of Address. This can be uploaded through their verification portal.
There is also an option to provide additional information about your financial situation and intended exchange use. The reason that this option is also available is for those traders who start cashing out larger amounts of coins, Bitstamp may halt these withdrawals as part of their monitoring activities. If you had completed the form then they may not inhibit your requests.
In terms of the times that it takes for verification, it can vary depending on load. During the 2017 Bull Run verification took at least a few days. Now, however, this can be done in a couple of hours. You can always send them a support ticket if you wish.
Bitstamp is often considered more of a "Fiat Gateway" than a large exchange to buy a range of smaller Altcoins.
Hence, Bitstamp continues to maintain a core focus on the most established crptocurrencies and offers pairs featuring Bitcoin, Bitcoin Cash, Ethereum, Litecoin and Ripple. These are matched with USD and EUR fiat currencies.
Even though trade volumes have declined, Bitstamp still provides a high level of liquidity in the cryptocurrencies it offers. This is especially true for all of their Euro pairs.
If you were looking for another Fiat gateway that had a larger range of altcoins that you could buy then you could consider Kraken which is an exchange based in California.
Bitstamp Registration and Login
When you visit the official Bitstamp site you’ll see a “Register” link in the upper right corner of the site. Clicking on that link will open the registration form for the exchange, where you will need to enter your name, email address, and country of residence. Click to agree to the terms of service, and to prove you’re not a robot and then click the “Register” button.
Once you’ve clicked you’ll receive a “Registration Complete” message if you’ve filled out the form correctly. You’ll also receive your customer ID and password at the email you used to sign up. The automatically generated password should be used for the first login, but then changed.
Check your email for your new credentials and you can use them to log into Bitstamp for the first time. You’ll be forced to change your password after your first login. Changing your password will log you out, and you’ll then log in with the new password.
You should also take a minute to set up 2-factor authentication to fully secure your account. Then you’ll be ready to check out what Bitstamp has to offer.
Bitstamp follows Know Your Customer (KYC) and Anti-Money Laundering regulations, so to unlock access to withdrawals and deposits you’ll need to verify your account. You can choose either a personal or business account type, but both require the following documentation to verify the account:
- Valid identification such as a drivers license, passport, or National ID.
- Proof of residence, which could be a utility bill, a bank statement, or one of several other government issued documents.
After providing the required documents you also need to verify your phone number. This is done via SMS, with Bitstamp sending an OTP code to the phone number you provide. Once that’s done you’ll have full access to all the functions and features of your Bitstamp account and will be able to easily deposit, withdraw and trade.
Your next step before trading will be to make a deposit, which you can do by clicking the “Deposit” link at the very top right of the web page. This will open the deposit options page where you can choose to deposit via SEPA or international wire, or if you prefer via your preferred cryptocurrency (BTC, ETH, LTC, BCH, XRP). It is also possible to make a deposit via AstroPay.
In some cases your deposit could take up to 3 business days, although cryptocurrency and SEPA deposits are typically much faster than this. Once you have funds available in your account balance you can begin trading.
Bitstamp Trading Platform
You can do this either by clicking the “Buy/Sell” link at the top of the page, or by clicking the “Tradeview” link at the top of the page. In either case you will need to choose the pair you’d like to trade, the amount of your trade, the price you’re willing to pay, and the order type (instant, market, limit or stop).
Once the trade is complete your account will be credited with the cryptocurrency you bought. You can then sell this late on the exchange, or you can transfer to an external wallet if you choose.
Note that there is a minimum of 5 Euro for Euro denominated trading pairs, and a 0.001 BTC minimum for Bitcoin denominated trading pairs. For any other trade pair the minimum is based on 5 units of the fiat currency. So any USD denominated pairs have a minimum of 5 USD.
We were quite impressed by the trading view platform in terms of its functionality and tools. From a user experience, it is well laid out with the order books and buy / sell walls easily visible. You also have a list of the latest trades that have just hit the market to the right of the platform that has an audio option should you desire it.
This is also the ideal platform for the chartists and technicians among the crypto trading community. This is because of the range of technical studies and indicators that are available. You can also expand the chart into a full screen option should you wish to only make use of the chart.
Unfortunately, there is no option to seperate numerous different charts into tabs or widgets. This means that you will have to open a seperate browser tab on another screen should you wish to trade multiple crypto pairs. Unfortunately, there is no PC client that you can download and complete your charting on.
To make up for the lack of PC clients, Bitstamp has a user friendly mobile application that is available on iOS and Android. On the app you can place orders and monitor your position. It also has limited charting ability should you wish to do any technical analysis.
While it is a great option for those traders who want to monitor their positions on the go or place one or two simple trades, it is not really that advanced. This is also what most of the feedback points out on both the itunes store as well as Google Play. For example, you cannot place stop orders and only limit orders and when you are looking at the charts, it does not scale too well.
Hence, if you are a user who is heavily involved in mobile trading then you may want to consider another exchange that has a more advanced and powerful trading application.
Because Bitstamp is so respected, it has been able to create several high-level partnerships, and has also had some notable achievements. Bitstamp was the very first Ripple Gateway, as well as being the first partner in the Ripple Incentive Program.
It is also notable that Bitstamp has secured partnerships with both Swissquote and Credit Agricole SA, highlighting its stellar reputation within the financial industry.
Currently regulated by the Luxembourg Financial Industry Supervisory Commission (CSSF), Bitstamp was the first fully licensed cryptocurrency exchange in Europe. Regulation means Bitstamp follows best practices in account verification and customer security standards, and is periodically audited to ensure it is adhering to regulations.
User feedback is generally positive for Bitstamp. There are some complaints about delays in approving accounts from the December 2017 timeframe, when all cryptocurrency exchanges were swamped with new users.
There have also been older complaints about customer service taking 2-3 business days to respond to support requests, but as of May 2018 those issues appear to be resolved as well. One final concern is the mobile applications, which are rated 2 of 5 stars on the Apple store and 3 of 5 stars on the Google Play store.
In general however, trading is efficient and reliable on the Bitstamp platform.
Bitstamp vs Coinbase
If you are based in Europe, there are two fiat exchange options that you would mostly consider and these are Bitstamp and Coinbase. Although Bitstamp has their head office in Europe and have made this their market over the past 4 years, Coinbase is making an aggressive push into their market.
They have expanded their Euro funding options and are rolling out more crypto pairs that people can trade on. In the below table we take a look at some of the most important considerations when you are deciding between Coinbase and Bitstamp.
|Buy / Deposit Methods||Credit Card, Debit Card, SEPA Wire, International Wire, Crypto||Credit Card, Debit Card, GBP bank transfers, SEPA Wire, Crypto|
|Available Crypto Pairs||BTC, ETH, LTC, BCH, XRP||BTC, ETH, ETC, LTC, BCH|
|Fiat Currencies Accepted||EUR||USD, EUR, GBP|
|Trading Platform||Tradeview Charts and Packages||Advanced (Coinbase Pro)|
|Customer Support||Ticket Support System, Telephone, Email||Email, Contact Form, Support Number|
|Trading Fees||0.25% - 0.10%||1.49%|
|Funding Fees||Free for SEPA, 0.05% for International Wire, 5% for Card||Free for SEPA / UK Wires, 3.99% for Cards (incl. Trading Fee)|
|Coin Security||Previous Breach||Never Been Hacked|
|Fiat Security||Standard Bank Account||FDIC Insured (USA) & Segregated Accounts in Europe|
From our analysis it seems that Coinbase and Bitstamp are similarly quite established. If you wanted all of the trading functionality of then you can use Coinbase Pro (ex GDAX). This is great for those traders who like to trade with charts and technical analysis.
While they both seem to have the same amount of cryptocurrency assets to buy at the moment, it is worth noting that Coinbase is in the process of adding a whole host of new coins to their platform. This was previously announced in a blog post by the company. There has been no indication as to whether Bitstamp will be adding any more coins anytime soon.
Coinbase does have slightly higher trading fees than Bitstamp and these are flat. This could be an important consideration for those traders who do a great deal of volume and would like slightly lower fees.
Bitstamp is one of the longest lasting Bitcoin exchanges, having weathered the beginning of cryptocurrency history, when it wasn’t even certain that cryptocurrencies could survive. Throughout the years it has positioned itself as a secure, reliable exchange for purchasing the top cryptocurrencies using fiat currencies.
With low fees and an easy to use interface, it’s a good chaoice for experienced, intermediate and beginning cryptocurrency enthusiasts looking to purchase Bitcoin, Ethereum, Ripple, Bitcoin Cash, or Litecoin.
Because the exchange is based in Europe and has a focus on European clients, it’s a great choice due to low SEPA transfer fees.
That said, this Bitstamp Review has found room for improvement.
For example, the exchange has room to add many more cryptocurrencies and fiat currencies. Adding an online chat feature could be an excellent way to stand out from the crowd of cryptocurrency exchanges that have eaten into Bitstamp’s trading volume over the past year.
Overall, Bitstamp is a good choice for those looking to buy and trade the major cryptocurrencies, especially for those located in Europe. As one of the oldest cryptocurrency exchanges you can rest assured that the team is reputable and trustworthy.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.