As of December 2015, the market for bitcoin is still very much in the developmental stage, and the exchanges on which it is traded have gone through many changes over the past few years. The digital currency does not have a home market and is not regulated by any single central bank, so the exchanges are spread around the world. In the wake of terrorist attacks and security concerns, there is a growing trend to regulate the exchanges, move them under the purview of banking regulators and limit anonymity. Some exchanges are limiting where they choose to accept customers, but the pro-regulation move seems likely to accelerate.

The biggest development in the bitcoin exchange universe was the Mt. Gox fraud and bankruptcy in February 2014. The Japan-based exchange had commanded about 80% of the bitcoin-dollar market, so its collapse opened the door to the growth of other exchanges even as trading volume temporarily collapsed. Reports surfaced in October 2015 that the smaller Belize-registered Cryptsy exchange might be having similar problems, with some users reporting issues withdrawing funds. Cryptsy remains functional at present. The following is a look at five of the active bitcoin exchanges in alphabetical order.

1. Bitfinex

Hong Kong-based Bitfinex claims on its website to be the most liquid exchange in the world, but it has had its ups and downs in 2015. On Aug. 19, 2015, there was a "flash crash" of 29% in the bitcoin price on the Bitfinex exchange, while prices were driven down 14% elsewhere. The Bitfinex price quickly bounced back to match prices on other exchanges, but the sharp move was enough to spook the market.

The crash was reportedly caused by several leveraged positions being closed out simultaneously, which squeezed liquidity. Bitfinex includes a peer-to-peer margin function, which allows traders up to 3.3 times leverage. When margin calls were triggered, this seems to have caused the sharp sell-off.

The exchange also announced in August 2015 it would not be applying for the New York's new BitLicense, which is going to be required for exchanges operating in that state. As a result, it no longer accepts deposits with New York state addresses.

2. Bitstamp

Bitstamp is based in both Slovenia, home of its young founders Nejc Kodric and Damian Merlak, and the United Kingdom. It was the third-largest exchange in the world in early 2015, but hacks have reportedly cost it $5.1 million. The hacks were apparently executed via phishing expeditions that allowed the thieves to access the hot wallets connected to the Internet. Fortunately, most of its currency was stored in so-called cold wallets: local hard drives that cannot be accessed.

The exchange closed for several days in January and incurred an estimated $2 million in expenses, beyond the theft itself, to track the thieves and sharply improve security. It is unclear how many customers it lost as a result.

3. Coinbase

Coinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam, and is based in San Francisco, California. It is both a wallet and an exchange, and it is one of the most popular ways of investing in bitcoin. Coinbase operates in 19 countries and 33 states; the company has indicated it will operate as a licensed and regulated exchange. Following a successful $75 million round of funding in January 2015, the New York Stock Exchange (NYSE) is among its investors.

Coinbase launched the first bitcoin debit card in November 2015, although it is still in a testing phase. The debit card is legal in 25 states and can be used at any retail establishment that accepts Visa cards. The company has emphasized it will work with regulators. It is also one of only two exchanges, along with Kraken, that has been incorporated into Bloomberg's terminals, which are widely used by currency traders.

4. Gemini

The Gemini Exchange was founded by the Winklevoss twins, best known for their long-running dispute with Mark Zuckerberg, whom they accused of stealing their idea for Facebook. The exchange debuted Oct. 8, 2015, amidst substantial publicity.

Gemini seeks to differentiate itself by setting up under the supervision of the U.S. Federal Deposit Insurance Corporation (FDIC), and it can accept deposits in traditional currencies as well as bitcoin. The company emphasizes security and regulatory compliance, as it seeks customers from among mainstream depositors.

Gemini has struggled to generate significant volume in its first few months. Critics see its policy of charging 25 basis points to both the buyer and seller as a major sticking point, as most exchanges charge less to the buyer. Exchanges have generally been cutting fees to increase liquidity, which remains a tiny fraction of the traditional foreign exchange market.

5. Kraken

The Kraken exchange was founded by Jesse Powell. It is based in San Francisco and is the market leader in trade versus the euro. Kraken is considered a leader in security and was selected by the Japanese government's trustee to assist in the investigation and windup of the Mt. Gox exchange. Kraken is also one of two exchanges, along with Coinbase, that has been incorporated into the Bloomberg terminals, which are widely used by the financial industry.

The company has been quite vocal in its objections to New York's new BitLicense, which as of August 2015, is required for all exchanges that take deposits from residents of that state. It has stated it will forgo all New York business rather than comply.

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