A well-respected exchange that gets credited with being one of the most reliable exchanges with some of the lowest transaction fees. Best suited for intermediate to advanced users investing with larger amounts of capital, and maybe a bit too complex for beginners. An exchange that accepts limited payment methods, and pretty high deposit fees on small amounts of money.
Table Of Contents
In this write-up, we’ll be reviewing the Bitstamp exchange, as well as guiding you through the most common practices on the exchange.
What is Bitstamp?
Bitstamp is one of the oldest and largest Bitcoin exchanges in the world. It is one of the top ten exchanges by volume online. Bitstamp is also one of the four exchanges that determine the CoinDesk Bitcoin Price Index. Thus, Bitstamp exerts an extremely powerful influence on the cryptocurrency market as a whole. Over the years, the exchange has experienced a lot of challenges in the cryptocurrency world and has been able to adjust and adapted necessarily to maintain her stand.
Bitstamp was founded as a result of a partnership between Damijan Merlak and Nejc Kodric as a competitor to the then-dominant Mt. Gox exchange in 2011. The exchange was formerly based in Slovenia and was later relocated to Luxembourg as a result of lack of the financial infrastructure in the country. Being a European-based exchange, Bitstamp enjoys popularity among many Europeans cryptocurrency traders as it is very convenient for European users to deposit Euros.
Bitstamp has maintained a proactive approach to adhering to KYC and AML practices since inception, and thus was the first exchange to be granted a national payment institution license by Luxembourg in 2016, making it the first officially-licensed cryptocurrency exchange in history.
Additionally, Bitstamp offers its API to allow users to create custom software to access and use their accounts.
Features Of The Bitstamp Exchange
Bitstamp is known to be one of the most secure exchanges in the world. However, it is to be noted that Bitstamp has experienced a lot of security challenges including:
- A DDOS attack by hackers in 2014, when hackers demanded a ransom of 74 BTC. The exchange suspended withdrawals as a security measure, refusing the ransom, and the exchange service was restored.
- Suspension of service experienced in January 2015. Bitstamp chose to suspend its service for about a week after it was hacked for 19,000 bitcoins. The hackers were reported to have used Skype and email communications with employees to introduce malware into the exchange’s system, and the malware retrieved the private keys of the company’s hot wallets.
These two threats have made Bitstamp better and stronger in terms of security, with each security threat paving ways for much more innovative and reliable security measures.
The following security measures were employed by the exchange in securing her customers’ fund:
Cold wallet Storage:
Bitstamp keeps around 98% of all of its coins in cold wallets and keeps its customers’ funds offline in secure vaults. The rest is kept for live trading via the exchange. Bitstamp sets the standard for best security practices with its fully secured cold-storage.
Two-Factor Authentication (2FA):
The 2FA is an extra layer of security that requires not only a password and username but also something that only the user has on them. Users can add an extra layer of security to their accounts using the common authenticator applications present on the Appstore/ Playstore.
Bitstamp also offers email alerts. This method is employed to assure the user is actually the one making requests from the webApp and not bots. An email is sent containing a customer ID and password to your inbox just after filling the registration form. Users are required to change the password immediately after receiving the mail at the first time.
Pretty Good Privacy (PGP):
PGP is a standard public key encryption program for email encryption. PGP is used to sign messages so that the receiver can verify both the identity of the sender and the integrity of the content. PGP uses a private key that must be kept secret and a public key that sender and receiver must share. Bitstamp uses PGP data encryption to authenticate all the uploaded files to the web application.
Know Your Customer (KYC):
Every customer must verify the account by providing full name, postal address and date of birth before executing any trade on the platform. To authenticate this information, Bitstamp also requires users to upload a government-issued ID and a no more than three-months-old utility bill to prove place of residence.
However, with all these security measures employed, traders must always note that the best practice is keeping their fund in a private cold wallet.
Bitstamp is known for her lower fee system than the majority of cryptocurrency exchanges. Bitstamp charges for a long list of service and operational fees including declined cash withdrawals, a monthly account fee, and a dormancy fee. A notable feature of Bitstamp is that you don’t have to pay transaction fees when withdrawing BTC. This feature is awesome, especially for traders involving in alt-coins on different exchanges. Bitstamp accomplishes this by aggregating the payment with a bunch of other payments, and then they cover the fee for the trader.
Bitcoin trading fees cost .25% for monthly volumes less than $20, with the percentage dropping with an increase in volume down to .10% for a monthly volume of $20 million. A few of the fees are as follows:
Click here to see the full breakdown of the trading fees
An application-programming interface (API) is a set of programming instructions and standards for accessing a Web-based software application or Web tool. A software company releases its API to the public so that other software developers can design products that are powered by its service. Bitstamp’s application programming interface (API) allows clients to access and control their accounts using the customized software. Bitstamp’s API support includes HTTP API, WebSocket API, and FIX. However, Bitstamp does not allow make more than 600 API requests within the range of 10 minute periods. Else, the system will understand the action to be from bots or an action to toward hacking the system.
BitStamp is widely used within UK and US. In addition, the exchange is currently available to over 60 countries. including Australia, Brazil, China, Hong Kong, India, Japan, New Zealand, Singapore, and South Korea.
Ease of Use
Bitstamp offers a highly intuitive tradeview feature that, while somewhat complex, offers a rich tool set that provides users with the ability to chart technical indicators such as accumulative swing index, ATR bands, Bollinger bands, and more. More than 11 different tools can be used in the complex technical analysis.
This interface makes observing market trends extremely easy, streamlines order placement, and presents open orders in a simple fashion. Account management is managed via a convenient top menu, which presents Account, Buy / Sell, Deposit, and Withdrawal links, along with a link to the Tradeview.
The funding interface is particularly easy to use on Bitstamp, and presents a clean breakdown of all available payment methods:
Bitstamp Sign Up & Identification
You can easily open an account by entering your name, email address, country of residence, and password. Visit the Official Bitstamp address and create an account by following the signup process.
Note: Make sure you are on the official website and not a cloned one. Make sure the protocol on your web browser link is HTTPS and not HTTP.
You can also use Cryptonite by MetaCert. Using Cryptonite, you must ensure the shield turns green when you’re on the website. As shown below:
1. Create an Account
- Click on either ‘Register’ or Signup button on the homepage as shown below:
- You will be re-directed to the registration page.
- Input your name, email address, country of residence. and tick the terms and conditions. Then click on the REGISTER
- Wait for the confirmation e-mail to the email address you provided. In the mail, you’ll be provided with automatically generated unique client Id and password. Log in to the website and change your password.
- Set Your 2- factor Authenticator: You can either use the Google Authenticator app or DUO. Follow this guide on how to set-up your 2- factor authentication.
2. Verify your account
Unlike other exchanges, Bitstamp doesn’t allow unverified accounts to trade, which is attributed to the fact that it facilitates direct bank transfers, credit card payments, and integrates with traditional financial institutions. All of these features greatly require KYC process. Therefore, in order to gain access to certain account functions such as bank transfers, it’s necessary to verify your account.
The verification process is in two stages:
1. Identity Verification
Bitstamp provides personal and corporate accounts and both require the following documentation to become verified:
- A valid Citizenship/National ID. Passports and drivers’ licenses can also be used.
- Proof of residence, this includes a bank statement, utility bill, and a variety of government-issued.
Enter your personal details exactly as they appear on your identity documents.
- The next section will require a high-resolution image of your government-issued ID document. Make sure this document is valid, clearly defined, and visible in its entirety. You’ll need to upload both front and back side images, enter the validity dates of the document, the document number, and the document type.
- Lastly, you’ll need to upload your proof of residence documents. Acceptable proof of resident document is as specified above.
2. SMS Verification
The second verification phase requires users to verify their phone number by using an OTP code that is sent to their phone. This should be done after the identity verification.
3. KYC FORM
The last stage of the verification is to fill the KYC form.
According to Bitstamp, the verification takes up to two business days. Once you are a verified user, there are no limits to your trades.
3. Deposit & Withdrawal Methods
On Bitstamp, it’s possible to fund your account via a diverse range of methods. Verified Bitstamp users are able to fund their accounts with SEPA transfers or direct bank wire transfer in EUR, GBP, CHF, or USD.
Customers within the UK can make withdrawals via SEPA transactions or via international wire transfer for GBP, USD, and CHF. Withdrawals in the SEPA zone take 2-3 business days, while international wire transfers take up to 5 business days.
Bitstamp deposit methods include cryptocurrencies such Ripple, Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. These cryptos can be withdrawn or deposited free of charge from Bitstamp wallets.
4. Funding Your Account
Making SEPA deposits and cryptocurrencies such Ripple, Bitcoin, Ethereum, Bitcoin Cash, and Litecoin incurs no charge. However, Purchasing Bitcoin via credit or debit card on Bitstamp incurs a fee of 5%. Also, International wire transfer funding incurs a 0.05% fee, with a minimum fee of $7.5 USD and a maximum fee of $300 USD.
To fund your account:
In this example, we’ll describe how to deposit EUR.
- In the upper left menu, click on BTC/USD and then, in the drop-down menu, click ETH/EUR as shown below.
- Now you can see the chosen currencies in the upper row:
- Click Deposit in the upper menu, then EU Bank (SEPA) in the left menu.
- Fill in all the required details.
Under Account Balance, chose Euro or USD (as the case may be).
- Under Amount (EUR), enter the number of euros that you want to deposit on your Bitstamp account. (In our example, we’re depositing 5000 EUR.)
- Click the DEPOSIT button.
On the basis of your input in the previous form, Bitstamp will present you with the data you need for your SEPA money transfer.
Note: You have to include the message number in your bank deposit message so that Bitstamp will know this is your account.
- Now fill in the SEPA form with your data and Bitstamp’s data. You can do this either at your bank or as an online payment.
You have to make sure to include the message number in debtor’s data (under a field such as a reference, debtor identifier, message, customer number, or similar).You need to input:
- Your name
- Your bank account number (IBAN)
- Residential address.
Use the data provided in the previous step:
- Bitstamp’s name
When your deposit has been confirmed by Bitstamp. You are expected to receive an e-mail notification within 3-working days.
In your Bitstamp account, your deposit will look like this:
Trading On Bitstamp
Once your funds are confirmed, the simplest way to purchase Bitcoins is an instant order at the current bid/ask price. As the name suggests this usually results in your purchase going right away.
To place an instant order, click ‘Buy BTC’, then in the ‘I want to spend’ box enter the total amount of funds you want to use for buying Bitcoins. This amount includes Bitstamp's fees.
Click on ‘Buy BTC’ underneath to place your order. Once your order is processed, the amount will be added to your BTC balance. Visit https://www.bitstamp.net/account/balance at any time to check this.
Bitstamp imposes the following minimum trade amounts:
- Minimum allowable trades for EUR denominated trading pairs begin at 5 EUR
- Minimum allowable trades for BTC denominated trading pairs begin at 0.001 BTC
- Other trading pairs are denominated in the current fiat currency of the specific trading pair and are set at 5 units of the fiat currency.
- Click Buy/Sell in the upper menu, then Instant Order (Simple) in the left menu. There are four options on the left panel. Choose Instant Order
- Then click Buy ETH:
Under I Want to Spend, enter the amount in EUR that you want to exchange in ETH. In the upper row, you can see how much EUR you have available. Then click BUY ETH below.
Note: Bitstamp fee for this transaction is 0%.
Approx. ETH to receive shows approximately how much ETH you can expect according to the current exchange rate.
Now your order to buy ETH is open and will soon be executed:
After the exchange has been successfully made, you will see a new Balance of ETH on your account:
All cryptocurrency withdrawals are free. Debit card withdrawals incur a fee of $10 of amounts up to $1000 USD. Withdrawals with credit cards above $1000 USD incur a 2% fee. International wire withdrawals incur a fee of 0.09%, with a minimum fee of $15 USD. Also, SEPA withdrawals incur a flat 0.90 EUR fee
To withdraw from your Bitstamp account, click “View My Account” under the drop-down tab as shown below:
Click the “Withdrawal” link on the top left menu. Depending on the currency to be withdrawn, choose any of the options on the left panel and Follow the steps provided.