Editors note from 05/02/2019: QuadrigaCX has recently filed for credit protection due to liquidity issues after Gerald Cotton, the CEO, had passed away in December. Read our most recent news for more information.
Today, we’re going to take a look at QuadrigaCX, a Bitcoin exchange based in Canada. Quadriga is a convenient enough way to buy Bitcoin and a few other cryptocurrencies, but in general we don’t think it offers enough value to distinguish itself from its competitors. Users with Canadian Dollars may find it an essential fiat>cryptocurrency onramp, but we can think of few others who wouldn’t be better off using something else.
We won’t just make this statement without backing it up. In the QuadrigaCX review to come, we’ll cover many different aspects of the Quadriga cryptocurrency platform. By the end, you’ll be able to decide whether or not this is the crypto buying option for you.
What is QuadrigaCX?
QuadrigaCX is a cryptocurrency exchange based in Vancouver, British Columbia. There is precious little information on the internet about QuadrigaCX, so we’ve got to pick up the pieces as we find them. QuadrigaCX is not a regulated exchange. Because of this, they don’t have to be overly transparent about their business. We can’t find a real street address for the company, and customer service seems a bit standoffish. On the other hand, signup is a breeze because complex ID regulations are not in place for this exchange.
QuadrigaCX sells Bitcoin, Bitcoin Cash, Bitcoin Gold, Litecoin, and Ethereum, much like Coinbase. Quadria’s fees are very high (more on this later), and the company accepts payment in Canadian and United States Dollars. Despite this, American customers can’t use Quadriga, though the exchange is available in much of the rest of the world.
Taken as a whole, Quadriga offers a few coins at high prices with little proof of security for a market that doesn’t include the United States. There are simply better and more versatile exchanges out there, many of which we have already reviewed. This doesn’t mean that QuadrigaCX is bad or scammy; it just doesn’t have what it takes to distinguish itself among the other exchanges in today’s market.
The eToro Alternative to QuadrigaCX
Quadriga hardly looks the part of a modern exchange. You can see it in the materials produced by the company itself, including clunky, dated looking explainer videos like the following:
Looks aren’t everything, but quality in this area can speak to quality in other areas. As we’re finding to be QuadrigaCX to be a little rough around the edges, we think these visuals speak volumes, and have us looking for a reliable alternative.
eToro is an excellent alternative, offering more options for more coins than Quadriga. Quadriga sells BTC, BTG, BCH, LTC, and ETH. eToro lets users invest in Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Ripple (XRP), DASH (DASH), Litecoin (LTC), Ethereum Classic (ETC), XLM (Stellar Lumens), NEO (NEO), and EOS (EOS).
We find eToro’s coin listing to be more relevant to today’s crypto trader interests than Quadriga’s. The platform also has a much more contemporary aesthetic than its Canadian competitor’s. Finally, there is greater sophistication in the trading options made available on eToro. This is the biggest difference between the two sites. And while eToro won’t meet the needs of every customer, we think it’ll appeal to a greater number of users than QuadrigaCX.
The main difference lies in the approach to ownership and returns that the 2 sites employ. QuadrigaRX sells cryptocurrencies in the traditional sense: you buy them, they send you the coins, it’s up to you to store your coins safely, you’re responsible for selling your coins when you want to “cash out”.
eToro doesn’t rely on ownership-based economics at all. Instead, they use CFDs to represent Bitcoin and other assets, without the underlying assets ever changing hands. Instead, the user “buys” a certain amount of Bitcoin at the present market price. However, she is not truly buying Bitcoin, but a contract that gives her access to the potential profits and losses associated with that amount of Bitcoin.
Your contract stays active for as long as you please. Users typically sell when they think the price has gone high enough for their tastes, when they simply need the money, or when they’re afraid they’re going to lose value from a declining price. This is all the same profit potential you’d get from traditional ownership, but without the hazards of buying, storing, and transporting real digital assets.
eToro also allows users to make leveraged trades – a feature not offered by QuadrigaCX. Leveraged trading is an option where you can buy more Bitcoin than you have money for. The platform simply gives you a multiple of what you could afford with cash. Your potential profits and losses also multiply, so you’ll be responsible if the price goes south. However, if the price of Bitcoin goes up and then you sell, you’ll get way more profit than you could have had if you simply bought what you could afford 1:1.
Obviously, eToro won’t be the perfect solution for everybody. Like QuadrigaCX, eToro is not available for users in the United States. Also, many investors want to be able to spend and trade their cryptocurrency, so contract based investing without ownership will not float their boat.
If you simply want to invest in a well-curated set of coins, without the possibility of messing yourself up with a failed transaction of mistaken address recipient, eToro could be a great solution. Furthermore, eToro is well regulated, while QuadrigaCX is not. There is no way to know how secure your money is with QuadrigaCX, because they aren’t subject to the same laws that stock brokers and other financial services are. eToro is well regulated and has been in operation since 2006, allowing users to invest in traditional assets before Bitcoin was even conceptualized.
Let’s return to QuadrigaCX. Even though it may not be up to snuff compared to its best competitors, it still offers value to certain individuals. We’ll help you parse this value in the rest of the QuadrigaCX review to come.
Quadriga looks like a decent exchange in many ways, until you get to the QuadrigaCX fees. QuadrigaCX fees are so high that it makes the rest of the sites services look a little rougher.
QuadtigaCX charges 0.5% fees for all completed transactions, buy or sell. That’s a very high number compared to the 0.10% you’ll sometimes see for Buy orders, and 0.0% sometimes offered for sell orders! It’s important to note that for QuadrigaCX’s most popular trading pair, BTC/ETH, the fee is only 0.20%. However, this isn’t all that low when compared to bargain transaction costs from platforms like Binance.
The QuadrigaCX fees don’t stop there. You’ll be paying high rates before you even buy a single Bitcoin. Deposits and withdrawals are where the Quadriga fees start to really hurt. You’ll be charged a whopping 1.0%-2.5%, just for depositing cash into the platform! You’ll be fleeced another 1.0%-2.5% fee when you withdraw those same funds. That means if you simply moved $100 in and out of the system without using any trading features, you could walk away with $95.
Cash delivery options charge 2.0% plus $20 for every transaction. That’s a lot, no matter how you look at it.
Signup and Verification with QuadrigaCX
Because QuadrigaCX isn’t formally regulated, signup is a breeze! This may be the best thing we can say about this site. All you have to do is put in a little personal information and a working email and you’re good to go. Just respond to the verification email, and you’re off to the races!
This is much different than other sites that require government issued ID numbers and card images. New accounts still have to be manually accepted with QuadrigaCX, and this can take days or weeks in times of peak traffic, but at least you won’t have to give them any sensitive personal information.
When you sign up, make sure to grab your referral link. If your friends sign up with QuadrigaCX using this link, you’ll get 10% of their trading fees for life. How much this is depends on how much your friends trade, of course, but if you happen to bring in a bunch of people this could be a not insignificant sum.
Here’s where things start to get a little questionable. Because QuadrigaCX is unregulated (and also because they simply don’t make an effort at transparency), we don’t know what methods they use to protect user funds. Exchanges like QuadrigaCX get hacked all the time, so it’s common courtesy for platform operators to share their security methods, even if they aren’t required to do so by a regulatory body.
QuadrigaCX does allow users to use 2-factor authentication. 2FA is recommended for every account you use that involves money. Basically, it’s one extra layer of security than a simple password. With 2FA, you’ll have to download an app like Authy or Google Authenticator. Then every time you log in with QuadrigaCX using your password, you’ll also have to supply a one-time-only code supplied by the app, which disappears in 30 seconds.
With this method, even if someone steals your password, they won’t be able to get into your account without also having that code from your phone. Of course, because we’re unsure of QuadrigaCX’s own security methods, we’re not sure to what degree your funds are safe once stored inside the platform. We like to hope for the best buy prepare for the worst when it comes to lack of transparency regarding security, so we can’t recommend QuadrigaCX on this basis.
Making Trades of QuadrigaCX
For all of our problems with QuadrigaCX, making a trade is actually very easy. However, with this ease comes an inflexibility that may be an issue for some users.
You see, all cryptocurrency purchases made on QuadrigaCX are made at market price, meaning that the user doesn’t get to select the price at which she would like to buy the coins. Coinbase works this way as well, and while it’s really easy for new users to simply see one price and one price only, it’s not the way to get the best deal. It’ll be hard for QuadrigaCX users to really know if they’re getting a good price relative to the price of Bitcoin within the past days, weeks, or hours. For sophisticated traders, this is a definite no-no.
There are two sides to this coin. If you are a user from Canada who wants to use Canadian Dollars to quickly buy Bitcoin, and you don’t care so much about getting the absolute best price, QuadrigaCX might well be the most convenient way to accomplish your goal.
We wish that QuadrigaCX would offer an alternative for more sophisticated traders, like Coinbase does with GDAX. Coinbase and GDAX are the same site, but GDAX offers much more powerful trading tools for the users that can appreciate them. QuadrigaCX doesn’t have the same options, despite having many other similarities to Coinbase. This is not to say that what QuadrigaCX does offer for trade pricing doesn’t work; we just wish there was more to it.
Final Thoughts on QuadrigaCX
To our eyes, QuadrigaCX is an aging cryptocurrency exchange that is starting to show its years. Its appearance and lack of sophisticated trading features keeps it behind the vanguard of cryptocurrency brokerage. Its lack of regulation is another mark against this exchange, as transparency is lacking and users have no real way of knowing whether or not their money is truly safe. Combine this with a customer service that can be very tardy in its response (using the dreaded ticket customer service system), and you've got an exchange that seems to work most of the time, but which we just can't recommend.
We hope that if you use QuadrigaCX that you like it and that you have only good experiences. But if you are thinking about trying a cryptocurrency exchange for the very first time, we recommend you look elsewhere.
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