Bitstamp is one of the oldest Bitcoin exchanges in the world, founded in 2011 as a European alternative to the Japan-based Mt.Gox, the biggest Bitcoin exchange in the world at the time. Unlike Mt.Gox, which went bankrupt after a catastrophic hack that lead to the theft of over 850,000 bitcoins from the platform’s hot wallet in 2014, Bitstamp managed to survive the harsh waves of crypto-theft that rocked the platform, becoming a prominent cryptocurrency exchange operating throughout the European Union.
Bitstamp Review: About the Cryptocurrency Exchange
Bitstamp was launched by Slovenian cryptocurrency enthusiasts Nejc Kodrič and Damijan Merlak in 2011. The company shifted operations from Slovenia to the UK in 2013, with hopes of obtaining a payment institution license in the United Kingdom but failed to obtain approval. According to Kodrič, the 2015 hack that resulted in 5 million USD worth of crypto didn’t help the process.
But despite the aftereffects of the hack, Bitstamp managed to rebuild its security and landed an agreement with Luxembourg, the tiny -and rich- European country that also hosts thousands of companies, to be granted a payment institution license. Since Luxembourg is in the EU, that license enables Bitstamp to operate across 28 European Union countries through the EU passport program.
The Bitstamp cryptocurrency exchange is still based in London, though the exchange is not regulated by the Financial Conduct Authority (FCA) or any other authority within the UK. It is registered as a crypto asset business and thus complies with KYC and AML regulations.
Most crypto exchanges only offered BTC/USD markets during the first years of Bitcoin and Bitstamp played an important role in BTC/EUR trade, as there were few Europe based crypto exchanges until a couple of years ago. It was one of the first platforms to offer Euro/Bitcoin markets alongside other US based exchanges like Coinbase and Gemini.
Bitstamp is a crypto exchange that is suitable for beginner and professional traders. Alongside more common features such as stop-loss and limit orders, Bitstamp also offers algorithmic trading and an integrated matching engine from Nasdaq to execute millisecond transactions that professional stock traders use. That feature helps customers to automatically execute faster transactions.
The exchange platform provides several application programming interfaces (APIs). That means Bitstamp clients can personalize their transactions and create custom controls for their transactions by implementing applications.
Bitstamp offers 39 digital currencies including Bitcoin (BTC), Ethereum (ETH), Tether, Ripple (XRP), USD Coin (USDC), Bitcoin Cash (BCH), Litecoin (LTC), Chainlink (LINK), Uniswap (UNI), Stellar Lumens (XLM) and a few other altcoins.
Bitstamp boasts stringent requirements regarding the cryptocurrencies listed on the trading platform. In fact, Bitstamps chief executive Julian Sawyer caught some flak for saying the platform is not going to list cryptocurrencies “that are hyped up by a billionaire’s tweet, or crashes on a billionaire’s tweet” in an interview with Financial News. Many commentators think the quote referred to Dogecoin, the “joke” virtual currency that became mainstream thanks to Elon Musk’s Twitter account. Elon Musk tweets tend to have a pretty visible effect on crypto markets in general but the effect is even more pronounced with DOGE.
Bitstamp supports fiat to crypto and crypto to fiat purchases as well. You can buy cryptocurrencies with EUR, GBP, and USD currencies on the trading platform.
Unlike many other crypto exchange platforms that use maker/taker fee schedules, Bitstamp uses a flat fee model, though trading fees vary depending on your transaction amounts. For transactions under 10,000 USD, the trading fee is 0.5%. If your trading volume is more than $10,000,000 you only pay 0.10% in trading fees.
The crypto exchange allows credit card purchases but there is an extra 5% fee for all debit and credit card transactions which can be quite steep. However, it is free to make Bitcoin and Ethereum deposits and withdrawals, which comes in quite handy.
Payment Methods and USD Withdrawals
You can use various payment methods to purchase cryptocurrencies from Bitstamp. ACH bank transfers, wire transfers, and SEPA transfers are all supported, as well as debit/credit card purchases. Keep in mind that debit and credit card purchases cost 5% per transaction and credit card issuers can add separate fees on top of your purchase.
You can use a SEPA transfer if you have a European bank account or a wire transfer if you are based in the US. USD and EUR withdrawals to your bank account are also available. Fiat withdrawals can take a couple of days to arrive at your bank account. SEPA bank transfers usually come quicker than SWIFT.
Bitstamp Mobile App
Bitstamp offers a mobile app for users who wish to be able to trade on the go. The Bitstamp mobile app is available for Android and iOS, but make sure you download the official app from bitstamp.net to ensure your security.
Bitstamp had a rocky period after losing 5 million USD worth of bitcoins in a cyberattack back in 2015. Some 19,000 BTC were stolen from the crypto exchange’s hot wallet, which made the trading platform freeze accounts and suspend trades after the attack.
At the time, Kodric claimed the company kept 90% of digital assets in cold wallets and hackers had targeted the remaining 10% in operational hot wallets. Currently, Bitstamp keeps more than 90% of crypto assets in cold storage. Like many other exchanges, Bitstamp uses two-factor authentication (2FA) for user logins and email confirmations for withdrawals. The trading platform also has a multi-signature feature that allows multiple accounts to co-control a wallet for extra security.
Bitstamp Customer Support
Bitstamp has a few customer support methods. There is a ticket system as well as a dedicated customer support phone line. You can email [email protected] for problems regarding registration. The FAQ section is quite robust as well.
Bitstamp has an overall “poor” grade on TrustPilot, though most complaints are in regards to ID verification problems. As anti-money laundering regulations over crypto exchanges ramp up, users are required to upload more identity verification documents which can be somewhat frustrating at times.
How Can I Know If Bitstamp Is Legit?
Even the oldest cryptocurrency exchanges are only as old as the world’s first cryptocurrency, Bitcoin, and there are many relatively new exchanges in the cryptocurrency ecosystem. Most of these trading platforms are only regulated as much as the assets they deal in, which means that for the most part they operate without any monitoring from authorities, bound by few regulations.
While this situation seems to be changing with the advent of more advanced regulations and policies regarding cryptocurrencies in general, the first decade of crypto exchanges witnessed many scams, failures, and hacks that led people to lose crypto assets worth millions of dollars. Even with crypto regulations amping up, it is not easy for a cryptocurrency investor to decide which trading platforms are legit businesses as opposed to exiting scams that could pack up and disappear without notice.
While some crypto exchanges comply with all regulations and have a positive reputation for it, at this point, this is the exception rather than the rule. As a result, the cryptocurrency community has tried to establish certain standards for cryptocurrency exchanges to help investors to differentiate scams from legitimate businesses. These are not rules but rather common-sense guidelines investors should take into account when they are thinking of signing up for a cryptocurrency exchange. These guidelines include whether an exchange is a registered business, whether it is regulated by financial authorities, its location, and the public profile of its workers and owners.
So, Where Are Bitstamp’s Offices Located?
Obviously, the most important metric is whether the crypto exchange is regulated or not but this can be hard to establish especially for beginners. Most crypto exchanges claim that they are regulated but they are only registered as companies that don’t preclude actual regulation. If a crypto exchange claims to be regulated by an offshore government, that usually means it is not actually being regulated as offshore countries have little resources for undertaking these tasks.
So, it is considered a good idea to check where the company is located and registered as a business. Of course, there are also legitimate businesses that operate from offshore islands but as a rule of thumb, it is important to see if there is public information about the exchange’s owners and operators. If the operators are unknown or have little public presence and the exchange is located on an offshore island, you may not have any recourse if anything goes wrong.
Bitstamp lists offices in London, New York, and Luxembourg. Bitstamp’s exchange headquarters address is listed as 5 New Street Square, London EC4A 3TW, United Kingdom. The exchange and its workers have a large public profile and are quite transparent about their current work and future projects.
A Few Words Before You Go…
Bitstamp is a cryptocurrency exchange and payment services company that mainly serves European clients. It is one of the oldest cryptocurrency exchanges that still run operations. Bitstamp is geared towards more professional users with bigger portfolios but it is available to crypto beginners as well.