Sponsored By
de | cn | ru
  VS.    

GDAX

GDAX Review
Trader's rating 1
Editor's rating 4

Trading Accounts

 

Account type Minimum deposit Leverage Maker Fee Taker Fee
Standard Undisclosed 1:3 0% Up to 0.25%

 

GDAX, which stands for Global Digital Asset Exchange, is a company owned by Coinbase. While some of you may know Coinbase for the ability to purchase Bitcoin directly by Credit Card, GDAX is the other part of the company – the exchange aimed at traders. Trading fees at GDAX are much lower and margin trading is available.

 

The company, security of funds

 

Company Country Regulation
Coinbase USA NY BitLicense

 

As mentioned above GDAX is actually a part of San Francisco – based Coinbase. The company holds the New York BitLicnese, which is by its nature an interesting piece of legislation. The New York Department of Financial Services (NYDFS) attempted to make the city a major Bitcoin trading center, the same way it hosts the world’s largest stock exchange. One may argue the idea backfired, as a lot of the key players backed-out of the 2015 proposal. This is due to the burdensome and slow regulatory procedure. As of the summer of 2017 only three companies have received the license and Coinbase is one of them.

 

When it comes to hacking, a major attack has not struck GDAX or Coinbase. That being the case, there was a “flash crash” in Ethereum prices, which raises suspicion. The coin was trading at around $317, when it suddenly spiked to an alleged value of 10 cents and quickly retraced. The company proceeded to halt trading and later claimed this was merely a “fat finger” - single large trader accidentally placed a market sell order, which triggered a chain of stop-loss orders to be executed. Here is а live video, shot by a trader, who has connected a MetaTrader4 platform to his GDAX account (the interesting thing happens around 2:50):

 

 

The public’s concerns, of course, come from the fact GDAX offers margin trading. The company could have manipulated the price, in order to wipe-out traders who were long. All of this is purely speculation.

 

 

Other than this case, the user reviews for GDAX generally match the ones for Coinbase. One of the major concerns of the fans of decentralization in the cryptoverse, is the fact a lot of the investors behind the project are well-established in the traditional financial sector.

 

Trading conditions

 

Trading instruments (cryptocurrencies)

Only three crypto currencies are available at GDAX, namelyBitcoin, Ethereum and Litecoin. Trading is done against USD and EUR, with BTC/GBP also being available, alongside the crypto-crosses ETH/BTC and LTC/BTC.

 

Minimum initial deposit

There is no information on the minimum initial deposit at GDAX, which is not that unusual in the crypto currency sphere. On the other hand, most forex brokers have such a level and disclose it on their websites. For instance the FCA-regulated industry pioneers at IG (who also offer some coins as CFDs) proudly announce they do not have a minimum – you can open an account for as low as you want.

 

Leverage

Margin trading is available on GDAX, with a maximum leverage ratio of 1:3. While this may sound like nothing in comparison to the 1:500, which a lot of forex brokers offer, keep in mind such high levels only apply for fiat currencies, which rarely have price movements bigger than 1-2% per day. 

 

When it comes to crypto, the aforementioned broker IG offers 1:13 in leverage (a 7.5% margin requirement). For a full comparison between crypto-exchanges and forex brokers, who offer Bitcoin trading, read this article.

 

Fees

The costs of trading at GDAX are a lot lower than the ones available at Coinbase. When trading on the exchange, market “makers” (the people who place passive orders and wait for other traders to trigger them) do not pay a fee. Market “takers” (i.e. the “aggressive” traders who directly buy/sell with a market order) pay fees starting from 0.25% and going down for the bigger traders. Both of these levels (especially the free of charge passive trading) are very competitive.

 

Trading platform

 

The platform provided by GDAX, which is web-based, is a lot better than the one offered at Coinbase. That being said, we find the charting lacking when compared to the charts provided by TradigView (which other exchanges have integrated, as well as MetaTrader4, of course. Only a couple of predetermined moving averages are available, in terms of technical indicators. Here is a preview (click to zoom-in):

 

 

The order book is located at the left and the more bizarre design decision to place the “ask” column on top of the “bids” is made. While this may seem strange to experienced traders it does provide a nice graphical representation for beginners. The tape is located to the left, with the middle ground being taken by the chart (which is nothing special) and the open positions tab. 

 

Methods of payment

 

While Coinbase is obviously the main source of clients (and funds) for GDAX, money can also be sent directly to the exchange. This is a massive convenience tool, as accounts can be funded, without the need of paying the hefty Coinbase fees. That being said, Credit/Debit Card deposits can only be made via Coinbase, while GDAX accepts Bank transfers.

 

Conclusion

 

GDAX is a part of Coinbase and more specifically the part of the company, which is targeting more active traders. The fee structure is very competitive, especially with the free market “maker” trades. The selection of trading assets is not great, but the trading platform feels relatively nice (although charting is nothing special). Here is a summary of GDAX: 

 

Pros Cons
New York BitLicense Few altcoins available
Competitive trading fees Suspicion regarding the ETH spike
No major hacks yet  
Accepts Bank Transfers  
Relatively nice trading platform  

 

Bisq

Bisq Review
Trader's rating 0
Editor's rating 3

Trading Accounts

 

Account types Minimum deposit Leverage Fee
Standard
Undisclosed
Not available
Minimum of 0.0002 BTC,
Default 0.002 BTC

 

Bisq, which was previously known as Bitsquare is a decentralized, peer-to-peer cryptocurrency exchange. While they allow fiat currency transfers, we see them as a more idealistic competitor to services like bitcoin.de, than a mainstream tool for buying bitcoin, like Coinbase

 

The company, security of funds

Bisq is not a company, but a “Decentralized Autonomous Organization” (DAO)". The project was started in 2014, by Manfred Karrer, as a means of keeping the original spirit of Bitcoin alive, even through the exchanges on which it is traded. 

 

The entire trading process at Bisq is not as simple as the one your are probably used to. Most exchanges operate on centralized servers. In essence all other the account balances are kept by the company and when you trade, let’s say Bitcoin, no transaction is made on the actual Bitcoin blockchain. The transfer only occurs in the company’s internal systems, which keep all of the coins and store the database, stating the amount of coins held in each account. While this allows the facilitation of fairly advanced trading software, some people don’t like the control which they give to the company running the exchange. 

 

Bisq is a totally different project which, connects buyers and sellers of Bitcoin (and other assets). The trading service is running on blockchain technology, supported by the community. This has several implications, but most importantly hacks are basically impossible and your personal information is not accessible by the owners.

 

Additionally, the company (which isn’t actually a company) does not control your coins. When connecting to the network you can input several payment methods – your cryptocurrency wallets and/or bank account and/or e-weallet (more on the payment methods below). It is key to note that this information is only shared with your direct trading counterparties.

 

When trading at Bisq, you can either place an order on the trading book or “hit’ one which is placed by another user. After your are matched, the crypto-currencies involved are sent to a multisignature address, form which they will find their ways to the respective wallets. An arbitration mechanism is in place, in case a conflict occurs and a security deposit is collected from both sides (the latter is refunded, after both sides confirm the transfer). 

 

On the other hand, every change on the decentralized Bisq network has to be recorded on its own blockchain. This makes the project very inconvenient for active traders, as a small fee is even charged when placing an order (even before it’s filled).

 

While being a lot more complicated than traditional exchanges, like Kraken, Bisq is very highly praised by customers. The loyal fan-base may not be huge, but definitely appreciates the service provide by the platform.

 

 

Trading conditions

 

Trading instruments (cryptocurrencies)

Currently there are 127 cryptocurrencies trading at Bisq. That being said, the trading volume on most of them is not impressive.

 

Minimum initial deposit

There is no minimum deposit at Bisq, as the platform does not require deposits. That being said, there is a limitation on the maximum trading size, which is set at 1 BTC, a pretty high level for most people, especially given current prices. That being said, forex brokers (which we mostly cover) usually announce a pre-determined minimum, below which they will not open a real-money account. For example, FXCM requires $50.

 

Leverage

Bisq does obviously not allow margin trading, as it is simply a method of connecting users. The leverage ratios available at most crypto-excanges rarely go beyond 1:20, as the space is very volatile. Even the forex brokers, which offer Bitcoin trading, like IG, do not provide high gearing.

 

 

Fees

The fees at Bisq are a complicated topic. If you don’t believe us, here is an actual quote from their FAQ section:

 

Trading fees are based on trade amount and distance to market price. Min. fee (MinFee) = 0.0002 BTC, default fee (DefFee) = 0.002 BTC, amount factor (AF) = 1/BTC, market price factor (MF) = square root of percent value (e.g. 1% -> 1, 9% -> 3, 0.01% -> 0.1). Trading fee = max(MinFee, DefFee * amount * AF * MF). E.g. 0.002 BTC for 1 BTC trade at 1% market price distance.

 

To put it more simply if you buy Bitcoin at a market-relevant price, you will pay something under 0.002 BTC, depending on the size of your order. As a comparison the forex brokers, which allow crypto-trading almost always include the entire trading costs in the spread. This is only one of the many differences between the two services. For a full list, check out this post.

 

Trading platform

 

The trading platform available at Bisq is not that sophisticated. That being said, the platform is a stand alone desktop application, which isn’t burdensome for the hardware. Here is a preview of the charting and tape (transaction history):

 

 

This is simply not impressive, by any means. Other than the basic charting, you can also see the relatively low volume on Bisq. To further reiterate the point, this is the BTC/EUR book:

 

 

While the platform as a whole is fairly self-explanatory, it isn’t something which will impress seasoned traders, who are used to solutions, like MetaTrader4(MT4).

 

Methods of payment

 

The payment methods supported by Bisq include a variety of Bank Transfers, Zele (ClearXchange), OK Pay, Perfect Money, AliPay and even US Postal Money Orders. 

 

Conclusion

 

Bisq (formerly known as BitSquare) is a decentralized, peer-to-peer crypto-currency exchange. While this sounds good from the idealistic perspective of not allowing potentially dishonest exchanges to access your Bitcoin, it carries a few flaws with it. The speed of transactions is very slow, when compared to the more mainstream platforms, which can be easily explained by the way Bisq works. In tern, this leads to relatively low volumes and even order-placement activity. One can argue this is simply a product aimed at people willing to exchange cash for cryptocurrencies (without trading actively). The counter argument for that will be, that in order to realize the full benefits of this project, one would have to already be familiar with the world of crypto. While we like the idea behind this exchange, we would like to see what improvements can be made to it, before recommending it. Here are the pros and cons of Bisq:

 

Pros Cons
Decentralized peer-to-peer network Slow transaction speed
A lot of payment options available Low trading volumes
A lot of altcoins available Platform not designed for active trading
Arbitration mechanism in place  
Desktop platform  
Positive user review  

 

Forex
de | cn | ru