Choosing a cryptocurrency exchange is one of the important choices every new trader or investor must make wisely. And the reason is quite simple, picking the wrong exchange can ultimately result in wasted assets, efforts and time. That’s certainly not a good way to begin your crypto journey. The first factor to consider when choosing an exchange is simply what you want to achieve as a trader or investor. That is, do you want to invest for the long term or short period, such as regularly. Looking for the right cryptocurrency exchange as a trader or investor might not exactly be an easy task, but it’s certainly achievable. Crypto exchanges are organized platforms where traders and investors can buy and sell their crypto assets. These crypto-assets can be bought or sold at any time on these exchanges. And they can also be held as long as possible by the trader or investor. There are thousands of crypto exchanges out there to help you with trading your crypto assets. In this post, we will run down a list of 10 things you should consider before choosing a crypto exchange:
1. Crypto Selection
Different crypto exchanges have several currencies you can trade with others on their platform. For instance, coinmama offers only 10 cryptocurrencies to be exchanged on its platform. This is very limited when compared to other platforms that allow hundreds of cryptocurrencies to be traded on their platform. If you are just getting started, then you possibly would want to focus solely on Bitcoin and other popular cryptocurrencies. Trying to get more than needed as a beginner might get things complicated fast for you. And again, that’s not a good way to start your crypto journey. If you are an expert, then you can do your research and try to choose a platform that offers you more cryptocurrencies to trade with.
Most people see crypto as something illegal, due to the lack of government regulations and hacker activities. But if you have discovered that crypto isn’t that at all, and you want to invest, then you need to consider the security system of the exchange you choose to work with. Some crypto exchanges such as Binance, Coinbase, Crypto.com, etc, know the importance of keeping your personal information and crypto-assets secured, hence they have put in place sophisticated security systems. Security systems such as Two-factor authentication, cold storage, and encryption are to be looked out for when choosing an exchange.
3. Exchange Fees
The exchange fee varies from one platform to another. And so, as a novice, it is important that whatever exchange you choose doesn’t cost you a lot more than you gain from the platform. On more popular and robust exchanges, you will likely face higher exchange fees and commission fees. Amongst the various platforms, Binance is known to relatively charge lower exchange fees and commission costs. Some lesser-known exchanges like Voyager, offer their users commission-free exchanges.
4. Availability of the exchange
Due to strict regulations by some countries, most exchanges can only be used in selected countries or states. Therefore, as an investor or trader, you need to find out if the exchange you want to use is available in your country or state. If your preferred exchange isn’t available in your country, you must keep an eye out for it, as most platforms are currently expanding their reach based on demand. You should also look out for foreign regulations if you are using an international exchange platform. Going against these regulations might make the usage illegal and you may face some penalties. You should therefore keep up with whichever exchange you choose to use.
5. Options available for buying and selling
Various exchanges allow different forms of buying or selling of crypto assets. Some exchanges allow users to fund their accounts by either connecting to their bank account or with the use of a debit or credit card. Some exchanges allow users to buy and sell their crypto from crypto-to-crypto trade (P2P trading). While some do not allow such transactions.
6. Wallet Availability
A wallet acts like a vault where you can store your crypto assets. And so, not all crypto exchanges that come with a wallet to store your crypto assets. For more convenience, it is better to have an exchange that has a wallet where you can store your crypto assets. This simply makes buying and selling your cryptocurrency easier and more convenient. But if you are an expert and you are dealing with larger crypto assets, then you should get an external cold wallet. This will ensure your assets are more secured and not vulnerable to attacks. All in all, you should choose a wallet that suits your needs most.
7. Interest on usage
As with our traditional banks, most crypto exchanges reward their users for the continuous usage of their platform. Some platforms reward as high as 10% commission when you keep a minimum balance for a specified period (staking of cryptos). It is worth mentioning that, unlike your traditional bank, your assets aren’t entirely insured. In other words, if the exchange platform fails, there’s no guarantee you will get your crypto assets back. Choosing the right crypto exchange is yet again one of the most vital decisions every crypto trader or investor has to make. But it is always wise to go with a platform that has been around for a long time.
8. Mobile Apps
The world has gone digital, and mobile apps are there to make accessibility very easy for everyone. Therefore, when choosing a crypto platform, they must have a mobile app version of the website. The app gets to stay on your device and ensures easy and convenient access to your crypto portfolios. A robust and user-friendly mobile app could be great to help traders manage their crypto account. And trades could be carried out more conveniently and without the hassle of trying to navigate a clunky website.
9. Customer service and community support
Crypto exchanges are not entirely well known for great customer support. And this isn’t quite fair on traders, cause if anything goes wrong with your account, you should be able to contact customer service as quickly as possible. Therefore, when choosing a crypto exchange, you need to consider its customer services. Community support is also quite important when choosing a crypto exchange. You want to go with a platform that can help with any issues you are facing during usage. And a community of other users would be great.
10. Debit/ Credit card Reward
Some crypto exchanges incorporate a debit card which can be used by traders to make purchases directly from their crypto account and fiat currencies. Certain crypto exchanges, such as BlockFi, offer traders a credit card through which crypto rewards can be earned on all purchases made. The best crypto exchanges are the ones that incorporate a debit card for purchases and offer a credit card for reward on purchase. Therefore, you must pay attention to those details when choosing a crypto exchange. So, if you are just starting your crypto journey, choosing an exchange platform can be a daunting task. As a new trader or investor, paying attention to the above things can help you make a better decision for yourself.