Users should carefully choose the cryptocurrency exchanges as these are similar to banks that allow users to trade, buy and sell digital currencies. Though there are multiple other methods to buy cryptocurrencies, crypto exchanges are the best method. Even though crypto exchanges are best, this doesn’t mean that all exchanges are good. If you have a conversation with an expert trader or investor, you will learn about their first crypto purchase and other experiences. Many people have lost their money because they invested in fake or not reputed crypto exchanges.
It takes time, effort, and dedication to become an expert at cryptocurrencies. If you are a newcomer in the cryptocurrency world and want to make your first Bitcoin purchase, you are in the right place. Choosing a crypto exchange is a daunting task, but it is essential to do it correctly to avoid nuisance. You can trade bitcoin through a reliable platform like http://thecryptopunks.com/ that allows you to trade professionally. Let’s discuss some factors or things that every investor should consider while selecting cryptocurrency exchange.
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What factors should investors consider when selecting a crypto exchange?
It is good to take advice from crypto experts about the crypto exchange, but before jumping into any exchange that one recommends, it is crucial to consider a few factors. Some critical factors to consider include history, user experience, security, markets, fees, and exchange liquidity. It would take some days to find the best exchange, but it is entirely worth it. You must do complete homework and research and make sure to check the reviews of different crypto marketing.
Crypto exchanges allow users to trade, buy and sell cryptocurrencies but not all crypto exchanges are the same. Therefore, it is first essential to learn about cryptocurrencies that specific crypto exchanges offer. It is crypto-to-fiat and crypto-to-crypto exchanges which means some crypto exchanges allow to acquire cryptocurrencies and exchange fiat currencies and vice-versa. In contrast, other exchanges allow the exchange of cryptocurrencies to obtain cryptocurrencies.
How to choose a reputable crypto exchange?
There are various things that investors should consider but also note that things may vary from exchange to exchange. Traders mainly prefer the exchanges that support trading pairs, specific altcoins, and other features like over-the-counter deals or margin trading. Below mentioned are the factors or aspects that you must consider:
Technology
Make sure to check the web address of the exchange as it must start with HTTPS. Avoid the web addresses that have HTTP connections. Exchange should utilize the feature of two-factor authentication to ensure safety while logging in on the exchange. The cold storage wallet is the secured wallet, and exchange should use it for customer deposits. Exchange should offer 24/7 security through emails and SMS and provide other security guarantees to their customers.
Security
Security is the primary concern and most important aspect of the crypto exchange. The exchange should use the best security measures in practice to ensure the protection of funds of users. If the exchange is careless about securing funds, the funds may get stolen, making all users face losses.
Transparency
Check about the transparency that exchange offers to its customers. For example, check whether the exchange reveals it headquarter address, team members, and owners. The completely transparent exchanges often public their address, provide support to users and allow users to check exchange reserves, including audit information. Even if the exchange is transparent, you still need to think about storing your funds with the exchange. Avoid leaving your crypto investments in exchanges and only store the funds that are important for everyday trading.
Fees
The fee is an essential factor that every investor must look for as all the exchanges have different fees. Make sure to check and compare the fees of all the exchanges. Mainly the fees charged by exchanges are less than 1% per transaction, and if the trading volume is more, fees reduce. Know about the deposit and withdrawal fees, and make sure to check that exchanges offer quick deposit and withdrawal.
Liquidity
With high trading volume, the exchange is more liquid. The liquidity of exchanges makes it possible to make transactions easier, faster, and without dealing much with the cryptocurrency’s volatile price. Make sure to check the locked-in price feature of exchange which guarantees that the price remains the same during transaction time.
