Bitstamp Review: Is Bitstamp Safe?
Feb 28, 2018
Launched in 2011, Bitstamp is one of the world’s oldest cryptocurrency exchanges. In this Bitstamp Review, we’ll cover:
- Launched in 2011
- Offices in London, Luxembourg, and New York
- Deposit Methods: Bank Wire, SEPA Transfer, Credit Cards, Cryptocurrency
- Withdrawal Methods: Bank Wire, SEPA, Cryptocurrency
- Available Cryptocurrencies: Bitcoin, Ethereum, Litecoin, Ripple, Bitcoin Cash
- Low trading fees of 0.25% or less, 5% for credit card purchases.
- Above average customer support in our experiences.
- Offers a mobile app.
- Site: Bitstamp.net
While Bitstamp has been widely used to trade cryptocurrencies since 2011, it hasn’t had a perfect history.
In 2015, nearly 19,000 BTC (at the time worth ~$5m) was stolen from the Bitstamp exchange. Through a social engineering attack, hackers managed to infect two Bitstamp servers with malware. These servers contained the wallet.dat files for Bitstamp’s “hot wallets” and allowed the hackers to steal the funds therein.
Obviously, this is pretty troubling news to hear when researching a cryptocurrency exchange, but there are a few important details to be aware of:
- Bitstamp stores the vast majority (98%) of cryptocurrency funds in secure offline cold storage, which limited the damage of the hack.
- The exchange launched an investigation following the attack and has since fully rebuilt their trading platform.
- The exchange began using multi-sig hot wallets and improved security for their cold storage wallets.
- Bitstamp covered the loss of all user funds.
Today, the consensus of the community seems to be that Bitstamp is one of the best exchanges on which to trade cryptocurrency. It consistently has trade volume in or near the top 10 of all exchanges. Though it did suffer the 2015 hack, it also formed many of the security processes that are considered industry best practices today.
1) Simple to Use Platform
While Bitstamp offers a traditional looking exchange interface called “Tradeview”, they also offer a simplified option that’s great for beginners (shown below).
2) More Payment Options Than Many Competitors
Most fiat-accepting cryptocurrency exchanges only allow you to deposit via bank transfers or wires, but Bitstamp also accepts credit cards. Unfortunately, many users have had issues with credit cards getting declined when attempting to make purchases on Bitstamp. This seems to be particularly common for U.S.-based users.
Below we’ll discuss the other fiat deposit options: SEPA Tranfers and “International Bank Wires”.
3) Low Credit Card Purchasing Fees
If you are able to successfully use a credit card on Bitstamp, you’ll be paying some of the lowest credit card purchasing fees in the industry. Bitstamp also offers rather high purchasing limits for this option.
4) Low Trading Fees
While some users may incur high fees depositing onto the exchange (see the cons section below), Bitstamp offers very competitive trading fees once your funds are on the platform.
Bitstamp uses a volume-based trading fee schedule, where users pay at most 0.25% to complete trades on the exchange.
5) Above Average Customer Support
In our experience, Bitstamp has provided above-average customer support including relatively quick verification times. Verification and other customer support requests have typically taken us a few days to receive a response.
6) Offers 5 Cryptocurrencies to Trade
While Bitstamp doesn’t offer a huge number of coins to trade, they do have more than some of the other exchanges we’ve reviewed. The exchange allows you to trade Bitcoin, Ethereum, Ripple, Litecoin, and Bitcoin Cash.
For those of you looking to trade a large variety of altcoins, your best bet is to buy Bitcoin or Ethereum from Bitstamp or a similar exchange, then use that to trade altcoins on Binance.
1) Strict KYC
Cryptocurrency exchanges, like Bitstamp, are required to have Know Your Customer (KYC) and Anti Money Laundering (AML) polices to comply with the regulations of numerous countries. This means that you’ll be required to verify your identity.
Bitstamp seems to have one of the more intense KYC policies, as we’ve seen users complain about being required to prove the original source of their deposited funds. While this is not necessarily Bitstamp’s fault, it could cause headaches for their users.
2) Extra Deposit and Withdrawal Fees for Non-EU Users
Users located in the EU, can use SEPA transfers to deposit (free) and withdraw (€0.90 fee).
International users, including those from the United States, will face higher fees when making “International Wire” deposits (0.05% fee, minimum $7.5 fee / max $300 fee) and withdrawals (0.09% fee, minimum $15 fee). Keep in mind, these are only the fees charged by Bitstamp themselves and your bank may add their own fees.
Due to the minimum international fees, this problem is particularly rough for users making small deposits and withdrawals. For U.S.-based investors looking to save on fees, we’d recommend GDAX.
Having reviewed Bitstamp, we view it as a safe cryptocurrency exchange that’s a great option for EU investors. The exchange can be used to buy and sell Bitcoin, Ethereum, Ripple, Litecoin, and Bitcoin Cash. EU users will be met with some of the lowest fees in the industry, whether using a SEPA transfer or credit card.
For those located elsewhere, we’d explore other options, as you’ll incur higher fees depositing and withdrawing. Coinbase is a similarly beginner-friendly option for U.S. based investors, while GDAX offers some of the lowest fees.
Bitstamp Review Rating
- Community Trust Grade
- User Experience
- Available Cryptocurrencies
- Deposit/Withdrawal Methods
- Customer Support