Comprehensive Bitstamp Review
Last Updated: 31 August 2018
In this comprehensive review, will will touch upon some of the most important details about Bitstamp’s impressive six years of rapid growth. As result of becoming Europe’s top exchange for trading cryptocurrency, Bitsamp quickly picked up pace, while setting up a new liquidity standards.
A couple of college dropouts were obsessed with the idea of Bitcoin, as result Bitsamp was founded. Damijan Merlak - a software dev and bitcoin miner and Nejc Kodrič - a louzy computer salesman identified a growing demand in Bitcoin exchange service and tackled it with high precision.
At the time, buying Bitcoin wasn’t a straightforward process and required to jump extra hoops, like wiring funds to Mt. Gox and often waiting days for the funds to clear, which many times resulted in financial loss due to bitcoin’s volatility. Damijan and Nejc saw the opportunity to fill the gap by easing the Bitcoin buying process and quickly acted! After the Mt. Gox collapse in early 2014, Bitsamp popularity curve moved toward reaching for the sky, as result it became one of the top global cryptocurrency exchange.
- A simple interface designed for making buying and selling cryptocurrency process easy. More advanced functionality, like detailed graphs and trading params.
- Deep liquidity stands behind a great number of buyers and sellers, representing excellent trading volume.
- Credit card deposits are currently being accepted in multiple countries.
- Bitsamp complies with CSSF - Commission de Surveillance du Secteur Financier regulations.
- Better, quicker less expensive cryptocurrency exchange, opposed to LocalBitcoins.
- Bitsamp is a centralized exchange, therefore the company has direct access to your private keys.
- The account verification process is a bit lengthy. User’s reports state an average verification period could take up to 5 days.
- Traders are obligated to provide an invasive amount of personal info.
- Upon meeting the $10k threshold, users are required to share an invasive amount of personal information.
- Unlike its competitor Coinmama, Bitsamp isn’t available for business in many countries.
- Support for major altcoins isn’t available on Bitsamp. The popular cryptocurrency exchange provides support only for Bitcoin, Bitcoincash, Ethereum and Litecoin.
Bitsamp on the move
In attempt to ease the burden of Slovenian government, Bitsamp had decided to relocate more than once. The first stop was London in April 2013. The company was searching for a better financial opportunities, while the governments struggled with the idea around regulating the Bitcoin market.
Unlike today, in the early days, the Bitcoin market was not being attempted to be regulated. Due to unregulated cryptocurrency environment, Bitsamp received a blessing from the UK government to conduct business within its territory. While the market wasn’t yet being regulated, Bitsamp formally decided to take a step forward by complying with KYC - Know Your Customer & AML - Anti-Money Laundering requirements. In the spring of 2016, after obtaining a license to operate as payment institution, Bitsamp made a choice to move its headquarters again, but this time to Luxembourg. Bitsamp had announced to be the first regulated cryptocurrency exchange in EU. The license grants Bitsamp a permission to operate in 28 EU member states.
Interview with Bitstamp’s CEO Nejc Kodrič
Bitsamp has its offices spread across London, Slovenia and California.The company is also open for business in 50 other countries like the US, South Korea, South Africa, Australia and Brazil. Unlike many others, Bitsamp accepts credit/debit card deposits. Major cryptocurrency can be purchased via Visa and Mastercard. Please note, before attempting to make credit card deposit to Bitsamp, please familiarize yourself with the list of accepted countries. Depositing fiat has been made possible via Single Euro Payments (SEPA) as well as bank transfers.
Bitstamp’s Crypto Assets
In the winter of 2013, Pantera Capital had invested $10M into Bitsamp and was the only participant in the first round of investments. Furthermore, in January 2017, Bitstamp had completed its second round of investments. The company ran crowdsale, as result raised another $4M. In early 2017, Bitsamp made an initiative to begin expanding its inventory by adding Litecoin and Ripple to its list of trading cryptocurrencies. On august 17, 2017, Ethereum trading was introduced. Bitsamp also adopted a $5 minimum trading value.
Bitstamp’s Security & Safety
Since Bitsamp is a centralized exchange, the private keys to your wallets are being held on its servers and therefore carries a risk of being compromised. Moreover, by making a deposit to Bitfinex, a user must consciously believe in full faith and trustworthiness of the company. Afterall, trusting third party with your coin isn’t such a good idea. I personally advise transferring coin to multi-signature or cold wallet immediately after the purchase.
Bitsamp account registration process is somewhat identical in comparison with many other popular centralized cryptocurrency exchange. An account must be verified prior to being able to submit any trades. Bitsamp asks new users to provide copies of government issued identification documents, as well as any utility bill that can prove your residency. The company requires the documents to be high quality. The resolution should be at least 300 dpi or even higher. Upon successful submission, the documents will be usually reviewed within the next 3-5 business days.
The security breaches
Bitsamp isn’t a stranger to security breaches. Sometime in February 2014 Bitsamp suspended all withdrawals to prevent attackers from reaching the user’s private keys, as result of distributed denial of service attack. A team of organized hackers made an attempt to blackmail Bitsamp’s executives and requested 75 bitcoins. Nevertheless, Bitsamp denied the request, and came back with non-negotiation with criminals policy. In the following year, Bitsamp security was finally breached, as result 19,000 bitcoins had been stolen. The group of hackers decided to use skype and email communication to infect the system with malware. The malware was designed to steal private keys from the hot wallets. Due to internal leakage, the newsflash only became public some 6 months later. Obviously Bitsamp had declined the authenticity and called it fake news.
The Bitsamp platform
Besides web based platform, Bitsamp also offers a mobile application. Still the majority of its users prefer the web. Bitsamp cryptocurrency exchange platform is very popular among beginners, due to its simplified functionality and user friendly interface.
Bitstamp’s – simplified Buy/Sel
Advanced trading view looks something like this:
Bitsamp also made an API available for the dev community. User reports indicate many issues with downtime and login. A popular cryptocurrency exchange made both Android and IOS app available for those who prefer mobile over desktop. Among some of the major issues being reported by the users are; poor customer support and slow order execution.
Bitstamp Fees Schedule
The fees is one of the most deliberative subjects since the rise of major coins as well as the cryptocurrency exchange industry. Since the crypto business isn’t yet being guided by a set of blueprints made to dictate industry’s standards, fees are subject to significantly vary from one exchange to the next. Bitsamp isn’t an exception, in fact this is how 90% of the revenue is being made. Bitsamp has three sets of fees in place: deposit fees, withdrawal and of course the trading fees. All coin deposits and withdrawals are made to be free, except Ripple transfers between accounts is 0.20% of the value.
SEPA deposits are always free, however 0.90 EUR are being charged for any SEPA withdrawal. Bitsamp gracefully charges 0.05% for any international wire transfer with a minimum of 7.5 EUR. Alternatively, withdrawals are 0.09% with a minimum charge of 15 EUR. The credit card deposit fees vary based upon the purchased amount. An 8% fee is being charged on cryptocurrency purchases of under $500. A 7% charge is being applied on purchases between $500 and $1,000. Furthermore, a 6% fee is deducted from purchases between $1,000 and $5,000. For any purchase above $5,000 a flat 5% fee is being applied. When choosing to withdraw funds to a credit card, Bitsamp applies a fee of $10 on all amounts above $1,000. Those who choose to withdraw more than $1,000, would be asked to pay a 2% fee. Trading fees vary between 0.10% and 0.25%, based on traded volume. Higher trading volume signals for lower trading fees. Bitsamp also applies a $0.55 fee on declined charges, a monthly fee of $1.95 and a dormancy fee of $5.
Bitstamp Market Exposure
Bitcoinity.org ranks Bitsamp the 3rd largest exchange by trading volume. Bitsamp controls roughly 14% of the entire global market. During the first 6 months in business, the cryptocurrency exchange processed transactions worth of $12 billion. Bitsamp welcomes over 15 million visitors every month. Roughly 28% are the mobile users. Similarweb.com’s collected data compares Bitsamp traffic to be lower than Coinbase’s by 80M and Poloniex’s by 80M.
Here are some of the choices that I believe maybe just as good or even better than Bitsamp.
- Coinbase – very popular exchange with user friendly interface. Credit/debit cards and bank transfers are accepted. More details could be found in my Coinbase review.(Based out of US).
- Coinmama – not a very popular exchange, high fees on credit card purchases. (Israel).
- CEX – user and beginner friendly interface, deposits are accepted via credit cards and bank transfers. (Based out of UK).
Are you an existing or a former Bitsamp user? Kindly, share your experience in the comments section below.