Bitstamp is now eight years old, yet the exchange only offers five different cryptocurrencies for trading. The whole idea behind that is to scale slowly and focus on growing the business strategically, something the founders promised to do when they opened the exchange in 2011. Damijan Merlak and Nejc Kodric were just in their early 20s and decided it was better to drop out of college and start a bitcoin exchange rather than finish their education. They did so in order to offer crypto traders a better alternative to Mt. Gox after the latter exchange let a hack cost customers hundreds of millions of dollars worth of bitcoin. Bitstamp launched in Slovenia and is one of the most popular crypto exchanges by volume across Europe and Asia.
While Bitstamp is seeking partnerships with major banks in Switzerland at the present moment, there are no imminent plans to compete with other exchanges as far as the number of currencies offered. That’s just one thing that separates Bitstamp from the rest of the competition. There are many other differences, some good and others not so much.
This review of Bitstamp covers all of that and more.
Bitstamp is a high volume of trades and thus offers a high degree of liquidity, meaning traders can access the market and buy and sell assets almost at will. Perhaps this is why the exchange only focuses on five different currencies and nothing more. Other crypto exchanges we reviewed offer hundreds of currencies mixed together in several hundred more trading pairs. Bitstamp doesn’t do that, yet the exchange still holds significant market share. Chalk some of that up to a first mover advantage. The founders were the first to offer an exchange to European users that made depositing and withdrawing funds really easy in comparison to dealing with Mt. Gox, an exchange based all the way in Japan.
Bitstamp is like most other exchanges in that customer support leaves much to be desired. However, as far as being globally accessible goes, Bitstamp is one of the most accessible exchanges out there. Dozens of countries allow their citizens to use Bitstamp. We’ll cover more of that later.
Bitstamp Hacks and Security Issues
Bitstamp rarely ever gets hacked, but the one major hack it has been through was record setting at the time it happened. There’s also been a minor hack too. Breaches of security are always concerning, but unfortunately in the crypto world, they have become all too common place. Nevertheless, Bitstamp has a way better track record than most other competitors when it comes to keeping customers safe from hacks.
In early 2014, the exchange was the target of a DDoS attack (distributed denial of service attack), which is basically the hacker’s equivalent of spamming. In response to this, Bitstamp suspended customer accounts for two full days to keep hackers from accessing private keys and taking funds out of the exchange.
Just under a year later, another hacker got through Bitstamp’s security systems and hacked the exchange for over 19,000 Bitcoins. They used Skype and email communications with employees that worked at Bitstamp to infect their systems with malware. The malware took private keys from wallets that were stored online. The general public only found out about it when an internal document detailing the hack was leaked. Bitstamp denied that the document was even real and had it taken off of the Internet.
Currencies Available at Bitstamp
As mentioned, Bitstamp launched in 2011 as a way to give European crypto traders an option outside of sending money all the way to Japan and having to wait extended amounts of time to get approved for accounts, all while paying excessive wire transfer fees.
That’s why when the exchange launched, only a small number of cryptocurrencies were made available, and of course 90% of the trading volume back then revolved around just buying or selling bitcoin. It’s been eight years since then and Bitstamp still only supports five cryptocurrencies, including:
- Bitcoin Cash
Obviously Bitstamp’s major competitors make many more digital assets available for trading. In fact, multiple exchanges we’ve reviewed offer hundreds. Perhaps it’s just strategy on the part of Bitstamp. Sure it only trades five different currencies, but the five different currencies it does trade happen to control 90% of the crypto markets total trading volume.
Nobody knows when the sixth currency will be added to Bitstamp. It doesn’t seem like anymore currencies will be added in the immediate future.
Other Bitstamp Services
Bitstamp IOUs and Ripple
Bitstamp and Ripple’s IOU service is a way to facilitate transactions for traders without requiring the usual blockchain confirmations that can make a transaction take longer. Speed and accuracy are the two main benefits of this. When traders exchange Ripple on Bitstamp, what they are actually doing is acquiring an IOU for BTC/USD. This means that Ripple and Bitstamp are essentially giving traders credit that they can later trade on the exchange. At any point the trader, or anyone they have traded with can send these IOUs back to Bitstamp, where they can be exchanged for real bitcoins.
Because Ripple is a distributed network and doesn’t depend on a single company to manage a transaction database, there is no need for block confirmations, meaning transactions go through the network really quickly.
Bitstamp Institutional & Pro Trading
These days exchanges that don’t offer institutional and Pro trading accounts are behind the times. Given Bitstamp is one of the longest standing exchanges in the industry today, it makes sense for the company to be ahead of the curve on these services.
The exchange’s institutional services cater to:
- Neo Banks
- Fintech companies
- Traditional banks
The benefit for brokers is that they can get access to digital asset markets that never close and they can do so with assurance that Bitstamp will help them follow all of the necessary regulatory guidelines.
Neo banks on the other hand can get help creating their own crypto offerings for their own customers. Bitstamp helps eliminate the typical barriers to entry that stop most of these organizations from getting involved in digital currency.
Fintech companies can actually get help planning out their inbound marketing to include digital currencies. This means they get help from Bitstamp building out customer journeys that lead people to digital currency as an option for their investment portfolios.
Even traditional banks can get in on the fun because with Bitstamp, they get to offer digital assets to their customers without having to deal with the overhead or regulatory concerns. They get to take a share in the profit of their customers business without having to take on all the expenses.
Bitstamp Pro and Corporate Accounts
Bitstamp Pro and Corporate do the same thing as Coinbase, Binance, Kraken and other well-known exchanges. They reward frequent traders with lower fees. It makes sense according to the classic 80/20 rule in business. 80% of a business’s profits come from 20% of the customers.
Since fees are always based on the digital asset being traded and the volume of trading that happens on an account, rather than differentiating fees based on regular vs. Pro vs. Corporate accounts, we’ll list Bitstamp’s fees based on volume below.
Bitstamp Payment Methods and Fees
Bitstamp actually charges higher fees than most other exchanges we’ve reviewed. Like other platforms, trading more often means fees are lowered. Unfortunately, traders will need to trade more than a million dollars in cryptocurrency in a 30-day span in order to get fees as low as 0.14% trading fees. On volume less than $10,000 in a 30-day span, the fee is 0.5% which is more than double what most crypto exchanges charge to traders making moves at such a low volume.
Here’s a chart of those fees:
TRADING FEES (ALL PAIRS)
30 days USD volume
0.50% on trades greater than $10,000
0.25% on trades greater than $20,000
0.24% on trades greater than $100,000
0.22% on trades greater than $200,000
0.20% on trades greater than $400,000
0.15% on trades greater than $600,000
0.14% on trades greater than $1,000,000
0.13% on trades greater than $2,000,000
0.12% on trades greater than $4,000,000
0.11% on trades greater than $20,000,000
0.10% on trades greater than $50,000,000
0.07% on trades greater than $100,000,000
0.05% on trades greater than $500,000,000
0.03% on trades greater than $2,000,000,000
0.01% on trades greater than $6,000,000,000
0.005% on trades greater than $10,000,000,000
0.0% on trades greater than $10,000,000,000
The above chart shows that in order to get a trade for absolutely no fees, a trader needs to be moving more than $10 billion dollars. The truth is there are many exchanges that will give customers a better deal. It’s really too bad that Bitstamp doesn’t have its own token or trading fee discount program like Binance. If it did, Bitstamp might be the world’s number one platform.
A quick note here regarding withdrawal fees. Bitstamp charges a minimum of $15 for a withdrawal fee, and 0.09% if the minimum is met. This is not including wire transfers. Bitstamp charges 0.1% for international wire transfers, $3.00 EUR for a SEPA withdrawal and 5% on credit cards.
The 5% on credit cards is certainly quite high, No other exchange reviewed on this site charges that much for a credit card transaction.
Check out the full Bitstamp fee schedule on the company’s website.
Bitstamp doesn’t have any limits on the high end of deposits or withdrawals. As usual however, customers will have to identify themselves and go through KYC requirements.
Bitstamp uses a support ticket system for responding to customer inquiries. Beyond that only high volume and corporate accounts get customized service from a live human being. They follow an approach similar to most other exchanges especially Kraken.
As is commonplace with crypto exchanges, most customer comments and reviews complain about funds being lost and never seen again. There are also many complaints about the lack of live support. This is an industry wide concern that obviously needs improvement.
That said, 99 Bitcoins gives Bitstamp an impressive 8.8 out Blockonomi provides an 8.4 out of 10 rating. Trust Pilot and BitTrust rank the exchange 2.5 out of 5 stars and 2.2 out of 5 stars respectively. Though the most impressive review ratings rank among the best in the industry, the lowest of the low are pretty far to the downside. As such, we can’t rate Bitstamp the best exchange in our reviews. It ranks in the middle of the pack to be honest.
Bitstamp vs. Other Cryptocurrency Exchanges (Binance, Coinbase, Bitstamp, etc…)
When comparing Bitstamp to other cryptocurrency exchanges, the reality is it just can’t compete for two reasons. One, a lack of digital currency support. Secondly, because Bitstamp’s fees for trading, deposits and withdrawals move up the ladder pretty quickly based on volume.
The chart below details how the features, advantages and benefits of the exchanges we’ve reviewed compare to one another.
|Criteria||Bitstamp||Other Cryptocurrency Exchanges|
|Fiat-to-crypto capability.||Credit card, debit card and bank transfers accepted through third parties.||Kraken accepts fiat, most others require customers to have crypto already.|
|Coins Offered||5 total cryptos supported.||Anywhere from 10-26 cryptos depending on the exchange.|
|Deposit & Withdrawal Fees||1-5% depending on payment method used.||0.1%-3.99%|
|Deposit & Withdrawal Limits||No specific limits loaded, but the site requires full identification prior to withdrawal||upper limit up to two full bitcoins. Lower limit is a few thousandths of a bitcoin.|
|Trading Fees||0-0.5% depending on trading volume||anywhere from 0.1% to 1.49% on a trade.|
|Customer Ratings||8.8 out of 10 on 99 Bitcoins. 8.4 out of 10 on Blockonomi. 2.5 out of 5 at TrustPilot. 2.2 out of 5 at BitTrust.||Most exchanges rank low on security and customer support, some rank higher in terms of offering a better fee structure and more cryptos.|
Frequently Asked Questions about Bitstamp
What does Bitstamp offer in terms of insurance coverage?
Bitstamp carries 99% of all assets in cold storage and all funds are fully insured.
How do customers withdraw money from Bitstamp?
Customers can withdraw money using bank wire transfers, SEPA transfers in Europe and debit cards. The fees vary for each method.
How long does withdrawing from Bitstamp take?
Withdrawing from Bitstamp can take up to 10 business days for an international transfer to go through and as little as three business days for a domestic transfer.
Is it safe to buy coins on Bitstamp and keep them on the platform?
Yes it’s safe to buy coins on Bitstamp, but given the exchange fell victim to one of the largest hacks of all time, it’s best to keep coins in cold storage. Traders who don’t own their private keys don’t own their crypto and frankly, no exchange in the market should be trusted with holding onto currency for lengthy periods of time.
Should You Use Bitstamp?
Yes! Bitstamp is one of the longest-standing crypto exchange platforms the last eight years running. North American readers may not be as familiar with the site, but it’s got a pretty robust market share in Europe and Asia. The exchange is also featured regularly on CNBC news as the go-to exchange when referencing bitcoin’s daily price movement.
Yes, it’s been hacked on two occasions, but frankly, that’s pretty good in the crypto world. The platform doesn’t bother with margin trades or other advanced types of trading, but the interface still requires basic knowledge of order types similar to those found in the stock market.
Nevertheless, traders looking to keep things simple and only trade a handful of the top currencies on the market as opposed to combing through thousands of altcoins will be perfectly happy using Bitstamp.