Few assets over the past year have been more popular Cryptocurrencies . With leading cryptos like Bitcoin, Ethereum, and others constantly making headlines, the asset class has seen record inflows.
While crypto’s popularity is hotter than ever, the question over which crypto exchange investors should settle on is far less of a consensus. Crypto exchanges, like other types of exchanges have their own nuisances, advantages, and issues.
To best understand which crypto exchange is best, is to recognize what the top priorities are for a given trader.
Understanding Crypto Exchanges
While seen as complex, investing in crypto is not much different from either stocks, forex, or other instruments. The industry is riddled with horror stories of scams, cyberattacks, and stolen wallets, however.
Despite these issues, crypto trading has never been safer than today, with several innovations made over the past decade.
Generally speaking, there are a few core features to look for when choosing the right cryptocurrency exchange for you. These include the following:
- Security, anonymity, and support
- Transaction fees
- UI and ease of use
- Volume and Liquidity
- Geographical location and restrictions
Once reserved as a niche form of investment, crypto trading is now firmly established as a mainstream investment class, adopted by banks, companies, and organizations globally.
As a first step, security is always paramount. This is integral for any crypto trading, as investors want their money to be safe and secure. Whether a trader is intent on purchasing crypto and holding long term, or is a day trader, the same mechanisms and safety protocols hold sway.
Additionally, not all crypto exchanges are equal when it comes to funding your account. Presently, most modern forms of payment are accepted, including PayPal or other service providers, credit cards, and wire transfers.
However, each exchange has different sorts of limits, fees, and other fine print that should be consulted before funding an account. This is perhaps the most diverse element of all exchanges, with these attributes ranging extensively from exchange to exchange.
Many exchanges now rely on an easy-to-navigate framework that makes it more seamless for newer investors. Traders should always familiarize themselves with any terminal before actually funding their accounts.
Demand More from Your Crypto Exchange
Depending on which crypto you wish to trade will obviously dictate what exchange you settle on. The best exchanges offer access to the most liquid cryptos and biggest name such as Bitcoin, Ethereum, and others.
Many other popular cryptos are now widely traded as well, such as Dogecoin, Cardano, and Stellar Lumens, among others. Seeing whether an exchange supports a desired crypto ahead of time will save a lot of headache and hassle.
For traders in certain jurisdictions, there are also specific rules or regulations that dictate what and how much an individual can trade. Always stay up to date with these laws as it could impact taxes.
Most exchanges now screen new traders for their nationality, which is designed to help prevent the inadvertent illegal use of using an exchange. See what is the best UK crypto exchange for traders.
Do Your Homework
Like any other form of investment, it is always advised to do your part and perform some basic research before choosing a cryptocurrency exchange.
This can be accomplished by simply looking into the exchange’s past history, or whether it has been subject to any past malicious attacks or phishing scams.
All popular exchanges have engaged forums or communities that have the same questions as others. Always avoid signing up for exchanges that have a known history of financial and security breaches, or those that have disabled withdrawals for long periods of time.
