Founded in 2011 by Nejc Kodrič and Damijan Merlak, Bitstamp is one of the true OGs of crypto. To this day it ranks consistently in the top ten for spot exchanges according to market cap. While the markets, coins and trading products available are much less in number than most crypto exchanges, they’ve largely pivoted to providing institutional-grade reliability for professional and institutional traders. Essentially, they’ve chosen quality over quantity.
Bitstamp’s advanced trading tools and simplified API configurability make them attractive to traders and investors who are seeking access to reliable, fast and stable transactions, something the exchange has worked to perfect for a decade.
Bitstamp started out as an early competitor to Mt. Gox and was originally based in Slovenia. In 2013, their operations moved to the UK and the founders pushed to position Bitstamp in the center of European markets, always with an eye on working within a strong regulatory atmosphere. At the time, however, crypto regulations in the UK were in a grey area without formal guidelines. Ultimately, the exchange moved its headquarters to Luxembourg to become the first ever government-recognized and regulated crypto exchange.
Bitstamp has become known as one of the most reliable crypto trading venues, with proactiveness shown on the customer support end, something many other exchanges have had trouble accomplishing.
Main features: Trading, Buy/Sell Crypto, Institutional and Professional Trader Services
Bitstamp has a very crisp buy sell interface that breaks down its 5 main offerings for placing crypto buy/sell orders:
A small variety of cryptocurrencies are available for trading, but they include the most traded coins, such as BTC, ETH, along with a selection of top performing altcoins and numerous stalecoins, including DAI and Gemini’s GUSD.
Minimum trade orders are:
For professional and institutional traders:
Bitstamp provides TradingView integration for advanced, real time market insights and tools. They are also leaders in API connectivity, supplying real time data reliably to institutional traders and trading platforms. Bitstamp’s order book is powered by a matching engine from Nasdaq and provides fast and reliable trade executions under varying market circumstances. Additionally, account managers are available on Bitstamp for the high volume trader and exchange partners.
With Ethereum 2.0 continuing to roll out through 2021, we will see the Ethereum mainnet change over from a Proof of Work (PoW) consensus mechanism to a Proof of Stake (PoS) mechanism. Instead of mining for Ethereum as a way to verify blocks of transactions on the Ethereum blockchain, validators who stake 32 ETH each will take over this function. Bitstamp announced in 2020 that it would support Ethereum staking on the exchange, allowing Etheruem stakers to earn additional Ethereum.
Bitstamp’s customer facing documentation is precise, user friendly, and thorough. It is also rather simplified, with just several superior quality resources covering everything a trader needs to know to use the platform. Perhaps due to the network effects of Bitstamp being in operation for over a decade, you can Google almost any question about Bitstamp and be led to a company blog post or FAQ sheet answering your exact question.
Bitstamp’s fees are on market with other exchanges. You can find a full fee schedule on the respective section of their website to see their current structure.
Traders may fund their Bitstamp trading account by depositing in multiple ways:
Exchange rates vary by region.
Bitstamp’s withdrawal fees are similar to Coinbase, with a .0005% fee on Bitcoin withdrawals and much lower fees for altcoins and stablecoins. The BTC fee is reduced to 0.1% for those who use the BitGo Instant option, which enables on-chain transactions with zero confirmations.
Bitstamp’s thorough verification process requires traders to complete verification forms and submit various documents. They also require that every transfer to and from the account must be from an account owned personally by the traders. Documents needed include:
What are AML and KYC?
As part of a range of Anti Money Laundering regulations mandated nationally and internationally, KYC involves the requirement of companies to verify each customer’s identity during the onboarding process. Verification is achieved by submitted identification, proof of ownership, and personal information such as name, address, email address, phone number and tax I.D. number.
A news article and a Twitter thread discussed how Bitstamp was going overboard with KYC by asking extra questions when users wanted to withdraw. Unlike most other exchanges, Bitstamp requires traders to answer specific questions when they make a cryptocurrency withdrawal. Such additional requests included asking for copies of pay stubs, other exchange account records, bank deposit slips showing deposits to other exchanges, and bank withdrawal history.
While Bitstamp is a trustworthy exchange with a long standing reputation for security and performance, the additional questions may seem particularly abrasive as DeFi applications and exchanges with zero KYC requirements become available and more liquid.
The trading interface is sleek and geared toward professional traders, yet it’s simplified and “quieter” than many other exchanges that post a lot of promotions or offer new services every week (ahem, Binance).
Bitstamp has a refined trading platform, simplified and easy to navigate, without a lot of bells and whistles.
Bitstamp works with institutional grade custody provider, BitGo. They also utilize wallet whitelisting and multi-sig hot wallets. Only a small percentage of the users’ crypto assets are stored in the online (hot) wallets while 98% of the assets are stored offline in cold storage systems. Cold storage assets are insured by BitGo as well.
Back in 2015, when hot wallets were used for the majority of exchange funds, Bitstamp’s online wallet was hacked. 19,000 bitcoins were lost, valued back then at around $5 million. Ultimately, no customer funds were lost and after the hack they rebuilt the platform with the focus on preventing future hacks. There have been no hacks in recent years.
Bitstamp has branded itself as the exchange for professional and institutional traders – one that provides the stability, security, and technological tools to handle fast executions for very large orders. In fact, they are the only exchange that lists “more than $10 billion” in their trading fee breakdown. It’s also kind of nice that Bitstamp focuses directly on one segment – the pro trader/investors – and doesn’t try to do double duty like Coinbase and other exchanges, who attempt to attract both the retail trader/newbie and the institutional trader. It definitely makes for a cleaner UI.
In addition to their focus on institutional grade trading and security, Bitstamp stands out for their premium support team, which is highly responsive with knowledgeable representatives available by phone 24/7, something that is literally unheard of across (crypto) competitors.