Bitstamp Review – European Exchange to Trade Bitcoin (2018)

Bitstamp is one of many Bitcoin trading exchanges that have sprouted up all over the world as Bitcoin has gained popularity as an international currency. Bitstamp’s story begins in 2011 when a pair of Slovenian college drop outs teamed up to create a Bitcoin exchange because of lack of any way for Europeans to trade cryptocurrencies.

At the time, the only option for buying and selling Bitcoin was the Japanese exchange, Mt. Gox. Damijan Merlak, who was already a Bitcoin miner and a software developer, teamed up with salesman Nejc Kodric to open Europe’s first Bitcoin exchange.

In this Bitstamp review, we’ll look at the essentials of the exchange and whether it may be right for you. It’s expanded since it’s early days as a local exchange, opening offices in several countries and supporting international customers.

Has being one of the early pioneers in Bitcoin exchanges given Bitstamp an edge on its competitors? We’ll see in the Final Verdict.

Is Bitstamp Easy to Use?

Compared to other Bitcoin exchanges, Bitstamp has a lean and simplified user interface. How complicated it will be to learn depends on how familiar you are with trading in general. Knowing the difference between a Limit Order and a Market Order will take most of the complexity out of trading on Bitstamp.

Bitstamp’s main portal is its website at bitstamp.net, but trades can be executed on their mobile apps as well. Most users will appreciate the large and clear buttons on the website’s interface for buying, selling, depositing, and withdrawing currencies. All the main transaction functions are easy to find and execute.

There’s also handy price history charting for technical traders who have experience trading other types of instruments like currencies and commodities. Don’t expect many sophisticated chart analysis tools, but you can look at long or short-term candlestick charts on Bitstamp.

So, what’s the catch?

Bitstamp is a small-time exchange compared to major financial institutions. It doesn’t have a large staff or teams of IT specialists to stay on top of every problem when it happens. The result is that there are customer service problems at times when the site experiences heavy traffic or there’s a bug that was rolled out during an update.

PROS:
  • Simple buy & sell interface
  • Provides advanced trading charts
  • Advanced trading functions like limit orders
  • Allows buying of cryptocurrencies with credit and debit cards
  • Much more efficient than trading with peer-to-peer exchanges
  • Significant trading volume ensures liquidity for lesser-known cryptocurrencies
CONS:
  • Centralized exchange means less security for your cryptocurrencies
  • Expect to be asked many vetting questions when depositing and withdrawing funds
  • Not yet available for all countries
  • Hidden and unexpected fees

How to Register Accounts

Registering an account is as simple as on any other website. You provide an email address and whether you are a private individual or a business. The website sends you a randomized user id and password for the initial login. You are then asked to choose a new password immediately.

That’s it?

No, unfortunately, registering with the website is just the first step to getting started. To deposit cryptocurrencies or cash to trade with, you’ll need to verify your identity. This is for legal purposes since the exchange operates under European financial regulations and must track who is trading to avoid liability for fraud and money laundering that might take place on the site.

How to Verify Accounts

The next step to getting started on Bitstamp is verifying your identity. There is a straightforward form that you fill out, providing your legal name, address, and other personal details. The verification of the information you provide is done by scanning and uploading two documents.

Only two documents, you might ask?

Yes, it’s simple enough. The first is a government-issued photo ID to verify your identity. For Americans, this could be a Driver’s License or passport. You need to scan both sides of the ID in color and with high enough resolution that it’s easily read.

The second document that you need to provide is proof of your current address. This can be accomplished with a bank statement or utility bill, but the document can’t be more than three months old as of the time of their review. This is required because government ID addresses are often different than a person’s current address.

Payment Methods Accepted

Bitstamp is a European exchange, so the options are geared towards that customer base. Cash (non-cryptocurrency) funding can be deposited with EU Bank, an International Bank, and with AstroPay. These local currency deposits are necessary if you want to buy cryptocurrencies on the exchange instead of trading or selling them.

What about cryptocurrencies, you might ask?

Bitstamp also accepts most of the cryptocurrencies on the market, such as Bitcoin, Ripple, Litecoin, Ethereum, and Bitcoin Cash. This will cover most of your cryptocurrency needs and allows flexibility in converting one cryptocurrency to another. Where other exchanges deal in only one or two cryptocurrencies, Bitstamp makes it a point to be the exchange where most emerging cryptocurrencies are available.

How to Purchase Cryptocurrency

Buying cryptocurrencies on Bitstamp requires that you deposit funds through one of its payment methods. Once you have the funds in a trading account, you are free to buy any of the crypto offered on Bitstamp at market prices or by creating orders that are filled if the price matches what you would like to pay.

Fees

What does it cost?

Bitstamp has a host of fees, and new traders should give the fee schedule a close study so they aren’t surprised. Trading fees are graduated depending on the size of a trade. A trader who has less than $20,000 of trade volume is charged 0.25% on each transaction, while a trader who trades over $20 million is charged a 0.1% fee on transactions.

Is that all?

No, there are a bunch of other fees as well. For example, there are cash withdraw fees. Withdrawing less than $1,000 to a debit card costs a flat $10, and withdraws over $1,000 will cost you 2% of the transfer. There’s a hefty 5% taken when making purchases with credit cards, too. There are also small fees when depositing or withdrawing with international wire services.

Limits

Large transactions can trigger more scrutiny from Bitstamp’s KYC department. You may get a questionnaire asking for verification of your identity.

This is because large volume trading attracts attention from regulators and law enforcement, particularly since cryptocurrencies are the currency of choice for Deep Web fraud and money laundering.

Currently, there is also a monthly threshold of $20,000 a month for credit card purchases for international traders.

Speed

But how fast is Bitstamp as an exchange?

Executing trades is usually instantaneous assuming there’s enough liquidity in the exchange for your order. Depositing and withdrawing funds can be slower, especially if it involves transactions across national borders. The entire process of getting started, from registration to first trade can be measured in weeks for some traders.

Reputation

Bitstamp’s reputation is good in the cryptocurrency exchange market, having been in business for many years. If you’re looking for an exchange that keeps things above-board, Bitstamp is a good choice. They take security and keeping their business legitimate seriously.

Of course, Bitstamp’s good reputation cuts both ways. Traders with more tolerance for transparency and regulations have a good opinion of the exchange, while those who bristle at the verification and KYC questions tend to leave for other exchanges.

Is Bitstamp Safe?

Safety in the cryptocurrency market is a relative concept, which makes a Bitstamp review difficult when it comes to security. The fact that cryptocurrencies are unregulated, uninsured, and untraceable is a double-edged sword.

As a trader, it gives you a measure of privacy and flexibility, but it also means stealing cryptocurrencies involves little risk for criminals. Simply proving that fraud took place can be a challenge.

Bitstamp itself, like other centralized exchanges, has suffered a major heist or two at the hands of hackers who’ve managed to transfer large amounts of Bitcoin out of the exchange’s storage.

But should you avoid cryptocurrencies altogether?

No, but the risk is higher than with other markets. Careful traders don’t leave their cryptocurrencies with the exchanges for extended periods of time to minimize the chance of losing them. Some traders prefer to use peer-to-peer exchanges, even though they’re less efficient, for these reasons.

Security

Account security at Bitstamp is good. The site generates a random user ID when you create an account and requires that you create a strong password for it. You can also set up two-factor authentication to make breaking into your account much more difficult. They also verify the identity of all traders to protect everyone from unknowingly getting involved in fraudulent trading activity.

When it comes to securing their own website and trading platform, however, Bitstamp has a checkered past like many other cryptocurrency exchanges. In 2014, hackers attempted to blackmail Bitstamp with a Denial-of-Service attack that knocked the site offline for a couple days. This attack was not successful, as Bitstamp’s management was adamant that they wouldn’t deal with criminals.

But it got worse:

In 2015, Bitstamp was hit by a malware attack that lead to a large loss of Bitcoin that the exchange had stored in various trader accounts. The malware was able to stead traders’ private keys and transfer the Bitcoin off the site. Bitstamp refused to admit to the attack over six months later when it was leaked by an internal source.

Bitstamp, though, is not the first and won’t be the last cryptocurrency exchange to suffer such embarrassments. The nature of cryptocurrency technology makes it a prime target for these kinds of heists, which is why most experienced traders advise that cryptocurrencies should be stored offline as much as possible.

Customer Support

Customer support can be challenging for many cryptocurrency exchanges with the sudden influx of traders in the past year. The reality is that they don’t always have the resources to handle all the traffic that is taking place, which results in waits of days or weeks. However, when there isn’t a rush taking place, Bitstamp’s customer support usually resolves problems within a day or two.

But here’s the deal:

One of Bitstamp’s selling points compared to other cryptocurrency exchanges is the effort they take to resolve issues fairly. This has given them a reputation for integrity that other exchanges can’t always match.

An online ticketing system allows users to submit issues from the website without making phone calls or writing emails. This also creates more transparency since there’s a ticket number and a single reference for correspondence about the problem and its solution.

Countries

In 2017, Bitstamp made the move to become a major international cryptocurrency exchange by adding support for debit and credit card transactions with countries outside of the EU.

This allows traders in most countries around the world with Visa or Mastercard to deposit and withdraw funds from Bitstamp’s exchange. Countries that Bitstamp supports include Switzerland, Hong Kong, Singapore, South Korea, India, and Saudi Arabia in addition to the EU and North America.

Bitstamp Alternatives

Today there’s a plethora of centralized cryptocurrency exchanges like Bitstamp. Here are just a few of the more popular alternatives you can trade with:

Famous as a Bitcoin exchange, Coinbase has been expanding into a trading platform for other lesser known cryptocurrencies. They’ve tried to stick to cryptocurrencies with enough liquidity that trades can be made in a reasonable amount of time.

Established in 2012, they have almost as much experience in the market as Bitstamp and are available in 32 major countries.

Formerly known as Coinimal, BitPanda is a Bitcoin and Ethereum exchange founded in 2014 and still owned by parent company Coinimal GmbH. The company is based in Austria and was started for the same reasons Bitstamp was founded: To create a Bitcoin marketplace in the EU. BitPanda focuses on providing a fast way to buy and sell Bitcoin and Ethereum currencies but hasn’t gotten into other cryptocurrency markets yet.

This is a Bitcoin-focused exchange founded in 2013 to provide a professional trading platform for the cryptocurrency market. The company offers an experience close to what is found in other professional trading markets, including free demos for beginners and an advanced trading platform.

This Israeli Bitcoin exchange has a basket of services similar to Bitstamp, including debit and credit card transactions for international traders.

Coinmama is known for giving small traders a measure of privacy by not requiring them to verify their IDs for transactions below $150 in value.

What Do Reddit Users Think about Bitstamp

Reddit users like to post questions and tips about most cryptocurrency exchanges, and Bitstamp is one of them. One of the issues that is often brought up in Reddit threads is the constant re-verification process Bitstamp requires when traders attempt to withdraw funds from their accounts.

These security measures are in place to prevent fraud, but it also makes many cryptocurrency traders uncomfortable, since they trade in cryptocurrencies because of their privacy and unregulated nature.

Of course, but how is this different from other exchanges?

That’s the counter question many Reddit users ask in response to these concerns. The identity verifications are a symptom of the larger legal problems that surround cryptocurrencies because they are the payment method of choice among hackers and Deep Web criminals. Most cryptocurrency exchanges that hold and exchange funds in their accounts are forced to make these efforts for liability reasons.

Is Bitstamp a trustworthy Bitcoin exchange?

That’s the second most common thread on Reddit about Bitstamp. Most Reddit users with experience with Bitstamp stand by the site as professional and fair-minded. There are, of course, the length security precautions that require patience, but that’s a cost of doing business in cryptocurrencies.

Should you keep Bitcoin in Bitstamp’s accounts?

The answer to this question on Reddit is a resounding, “No!” This is because of the high-profile hacker heists that have happened with several centralized exchanges, and the fact that there’s no insurance backing assets kept on these sites. Bitstamp itself was the victim of a couple hacker attacks, one of which was successful in stealing almost 19,000 Bitcoin in 2015, which at the time was valued at $5 million.

Most Bitcoin traders today are extraordinarily cautious about how they handle their Bitcoin. They place them on exchanges only for as long as they need to sell them, and after purchases, they immediately transfer Bitcoin to offline hardware wallets for safe keeping. These measures minimize the risk of Bitcoin suddenly disappearing when the next big hack takes place.

International traders can have difficulty depositing and withdrawing funds.

Another issue lately that Reddit users have been noting is that traders based outside of the EU have a difficult time passing the Know Your Client tests that European regulators require. Deposits are sometimes canceled or held up for long periods of time while these procedures play out with international accounts. This is the main reason many Reddit users will recommend other cryptocurrency exchanges for traders living outside of Western and Central Europe.

 

8 Total Score
Final Verdict

So how does our Bitstamp review turn out?

Bitstamp is a reputable and trustworthy cryptocurrency exchange that goes the extra mile to keep the trading on their site legal. For international traders who live outside of the EU, however, it can test one’s patience and involve long delays when depositing and withdrawing funds before and after trades.

If you can handle these delays without it causing too much trouble, we certainly recommend this exchange for your cryptocurrency trading needs. If you live outside the EU, or you value your privacy, then there are other more circumspect exchanges or even peer-to-peer cryptocurrency exchanges, that may serve you better.

Ease of use
8.5
Fees
8
Security
8.5
Reputation
8.5
User Rating: 5 (1 votes)
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