Bitstamp is arguably the longest running fiat to bitcoin exchange in operation today – initially starting operations as early as 2011. Since then, it has managed to experience everything the wild crypto market has to offer, including a $5M dollar hack (in BTC) in early 2015, and has lived to tell the story and eventually become one of the most respected fiat-crypto on/off-ramps today, with high liquidity and high regard. Here, we will closely examine this exchange and try to understand how much we should value it in the current landscape of fiat-to-crypto exchanges. Spoiler: it’s one of the good ones.
Starting off with User Experience, the Bitstamp platform is among the simplest ones out there – in a good way. The interface is not too flashy yet inviting and easy enough to understand, and will be welcomed by both seasoned traders & technologists, who will feel at home in the exchange Pro Trader interface, and casual investors, who will let out a sigh of relief when they understand that on Bitstamp buying and selling cryptocurrencies is as simple as a few clicks – using its intuitive and simple Buy & Sell interface. Bitstamp provides a high quality customer service, although it sometimes takes longer to respond – our request remained unanswered for more than two full days, but they also offer direct support through the phone, if you call during business hours. We should also mention Bitstamp has one of the easiest verification processes we’ve seen – we were managed to be verified in less than 5 minutes, start to finish (bear in mind we had all the relevant documents at hand prior to starting the process). Bitstamp has proven that simple is king, if done right.
On the performance metric, Bitstamp has also excelled – and what has given it the most credibility here is the fact that it houses very high liquidity for the modest number of assets it offers, alongside low spreads and average fees. Bitstamp is also consistently regarded as one of the highest quality markets, and was listed in Bitwise’s recent “Real 10” Bitcoin liquidity benchmark, which placed it along the ten exchanges whose reported trading data is the most transparent and trusted. We at Cointelligence adopt this view, and certainly believe all ten of these exchanges report their trading data in a correct and non-misleading way – Bitstamp included.
Where Bitstamp shows its weaknesses is the Features side – with only 5 cryptocurrencies listed on its platform, two allowed fiat currencies and one payment method (bank transfer). Virtually all points Bitstamp has gained in this category is due to its top-of-the-line API with excellent functionality and performance.
Moving on to Team, Bitstamp has pretty much proved its team is more than capable of successfully running the business, aside from the unfortunate phishing incident of early 2015, in which a directed attack on company employees resulted in a Bitcoin theft worth $5M at the time. Nevertheless, today the team is respected and appears publicly not only to promote their exchange but also the entire crypto market, and their credibility has received yet another tailwind in the form of the acquisition made by NXMH – in which the conglomerate acquired the Bitstamp exchange & company for an undisclosed amount in October 2018.
After a deep dive on the exchange’s security mechnisms we feel comfortable giving it a very high trust score, simply because it does everything it can to empower the user (and incentivize right security practices), for example a direct option to withdraw cryptocurrencies to a hardware wallet. True, it was hacked in the past (see mentioned phishing attack above) but it has no doubt learned from the incident, and currently keeps a very high percentage of user funds in cold storage. Finally, regulatory-wise, the company is incorporated in Luxembourg and has a license to operate in 28 member states of the EU, a fact which reduces regulatory uncertainty and increases not only user trust in the exchange, but also the reliance upon continued banking cooperation – sadly, not an obvious reality with some other exchanges.
To conclude, Bitstamp is an old giant: it has remained in continued operation for 8 years, houses high amounts of real volume to a small amount of high-cap cryptocurrencies, and focuses on the quality of current features instead of endlessly adding half-thought ones. It does little, but does it well, and manages to instill trust in its high amount of returning customers, and have also managed to win over our rating – which holds very high standards.