A crypto exchange is your first step to make headway into the world of cryptocurrency. Just like traditional stock exchanges, crypto exchanges allow users to buy, sell, trade, and exchange cryptocurrency. Whether you want to engage in short-term trading like scalping or planning for long-term position trading, crypto exchanges are the platform for you. The recent boom in cryptoscape has led to a surging growth of crypto exchanges. While more numbers of exchanges are welcome- you should also know that not all such crypto exchanges are equally reliable. Read here more about Multibank.io.
The post below offers a brief guide on the most important tips to consider while signing up with the right crypto exchanges.
If possible, look for home-grown local crypto exchanges. Even the internationally operating exchanges do not accept traders from every single country. Geographical restriction is a major issue in the crypto trading sphere. It’s better to go to local crypto exchanges because you won’t have to face geographical limitations here. Another factor is, with local exchanges, you won’t have to pay currency exchange fees.
However, if you can’t find a local exchange, then look for international crypto exchanges that allow traders from your country and also assure affordable currency exchange rates.
List of crypto assets
Are you only interested in bluechip coins like ETH or BTC? Or you have plans to try out some obscure altcoins for portfolio diversification? If you only focus on major coins, then it would be easy to find a crypto exchange. But if you have plans to tread an off-beat path with altcoins, then you should check the list of coins available beforehand- not all crypto exchanges out there make room for not-so-popular altcoins.
Is it user-friendly?
This point is especially crucial if you are a beginner crypto trader.
Complicated dashboards might be too overwhelming for newbies – you certainly don’t want to drop out of your crypto journey just because it was difficult to navigate through an exchange dashboard. In fact, to make things easier for new traders, some crypto exchanges have kept a separate easy-to-handle section for new traders.
Thus, look for crypto exchanges that feature a user-friendly dashboard. However, it would be a more fulfilling experience if your chosen exchange has a separate version for beginners.
● Does it have a pro version?
If you are a pro trader, you would certainly want something more matured and advanced than a beginner trading dashboard. Some crypto exchanges actually house a separate section for pro traders. So, find an exchange that features a compatible dashboard for pro traders- if not, the platform must have a separate section for pro traders.
The liquidity aspect
This is one major aspect that can separate the best crypto exchange from the good ones.
In other words, high liquidity is a key feature of the leading crypto exchanges. High liquidity allows traders to trade anytime without worrying much about huge markup. Lack of liquidity creates problems in converting crypto to cash or fiat to crypto.There are two signs of high liquidity for crypto exchanges. One is, the exchange boasts a massive user base. If not, then the exchange should at least house high roller users who not only hold huge volumes of assets but are also frequent traders. A reliable exchange will generally be open about its user base. For more clarity, you can check the 24-hour daily trading volumes of your shortlisted crypto exchanges to find out about their liquidity status.
Always remember, high liquidity is absolutely essential if you have plans for day trading.
The security factor
With reports of hacking and data breaches in crypto exchanges claiming headlines almost every other day, traders must check the security factor while looking for a crypto exchange.
Here are the things that your chosen crypto exchange must promise-
● Biometric scan
● Cold storage for inactive funds to thwart hacking attempts
● Multi-signature wallet
● KYC completion during registration
● Independent audit
Even the biggest crypto exchanges in the world had suffered hacking attacks. Odds are, the exchange you choose might have faced a similar issue in the past. But what you should focus on is what steps the exchange took after facing the attack. If the exchange has amped up its security features, reimbursed the stolen money, and started an insurance policy- then the exchange is worth your money.
Types of payment options
Leading crypto exchanges generally offer a wide range of payment options. You will have the ability to choose from bank wire transfer, credit, and debit cards, and so on. However, if possible try to avoid credit or debit card payments as most crypto exchanges charge hefty fees for card-based payments.
Check the fees
A crypto exchange generally charges fees for almost every activity you conduct on the platform, be it buying or trading, or exchanging. So, make sure to check the fee structure before signing up with a crypto trading platform. The usual norm for crypto exchanges is to charge around 1% to 5% commission- the lesser they charge for you the better.
You will know that a crypto exchange is actually reliable if it proactively offers 24/7 live support for customers.
We will wrap up the discussion on finding the right crypto exchange with the last pointer you need to check before signing up with a trading platform. Always study the market reputation of a crypto exchange before registering with it. What you must do here is make a shortlist of at least 5-6 crypto exchanges beforehand. Include only those exchanges that allow traders from your geographical region.
Then, you will take a comprehensive study on all the crypto exchanges in your list. Check their trading volume, assets, fees, security aspects, fees, and so on. Also, check the market reputation of the crypto exchanges. You can go through expert reviews and ratings on the exchanges. There are posts online that review the best crypto exchanges for both pro and beginner traders. Study those lists diligently. The process will take some time for sure- but it’s better to take an informed decision especially when you are planning to trade in an aggressively wild market like crypto.