Cryptocurrency has become a major force in the investment world. Since it has massive potential for generating significant profits, everyone, from enterprising millennials to major financial institutions, is interested in learning how to cash in on this new, global trend. That’s where cryptocurrency exchange platforms come into the picture. With over 500 cryptocurrency exchanges in the world, choosing one exchange from amongst so many can be an overwhelming and daunting task.
Since the crypto industry has been on an upward trajectory, new investors enter the fold every day. However, many users are in the dark about trading and purchasing tokens and digital assets. Therefore, in this post, we are going to help you understand the factors you need to consider before signing up with an exchange. Let’s go!
Things to Consider Before Choosing a Cryptocurrency Exchange
Look for Legitimacy
Scams and frauds are an unfortunate fact in the crypto world. The first thing you should ensure is that the crypto exchange platform you want to use is legitimate.
Transparency is one of the best ways to judge the legitimacy of the platform. Do some research. If there is ample information on the internet, that is a positive sign. No online presence and a lack of credible info are warning signs that an exchange may be a scam.
Learn what other users have to say about the platform. Check the history of the platform as well. Have there ever been any issues, such as security problems or fraud or too many complaints? These signs will help you know whether the platform should be trusted or not.
Since anonymity is a crucial element in the crypto world, security concerns often arise. Exchanges primarily focus on assisting users with fast and easy transactions. While doing so, they may compromise on security.
The exchange should provide two-factor authentication and/or multi-signature functionalities. Also, if the account creation process is a little difficult, take it as a positive sign. If it’s too easy, the exchange may be less trustworthy. In case of perpetual swap contracts, a security fund feature is a must to prevent an investor’s position from being auto-deleverage, hence covering the loss.
Moreover, a good exchange sends a large percentage of your funds to cold storage, just in case the platform gets hacked. Look for cold storage/offline storage services to judge whether the platform takes security seriously or not.
Not every exchange platform has a wide selection of cryptocurrencies. Most platforms keep the most popular tokens, along with a selection of a few others. If you are testing the waters and want an uncomplicated crypto selection process, you can choose an exchange that has limited cryptos. However, even a beginner should invest in various tokens along with the popular ones to diversify their portfolio and have the option of expanding the trading later on.
An experienced trader who indulges in a lot of research needs an exchange platform that has lesser-known coins or freshly-added currencies. For instance, Wisebitcoin, a leader in cryptocurrency trading, has a variety of popular and new tokens listed including DeFi and leveraged ETF tokens. Such platforms help traders to stay industry-forward and make proactive decisions in crypto trading.
Accessing cryptocurrency services and trading tokens is different in different parts of the world. For example, in some jurisdictions, local citizens do not have access to crypto exchanges. Countries that do not have national regulations may have state regulations. Therefore, it’s essential to know the areas a cryptocurrency exchange caters to and the applicable laws that can impact services.
It is always better to choose an exchange that belongs to the country that is clear about its stand on cryptocurrency.
If you are trading for the first time, you don’t want to be stuck in the complications of the platform. Therefore, choose a platform that has a basic, intuitive design, and an easy and seamless user interface. This will make platform navigation quick and easy. However, if you are an experienced trader, you can choose a complex platform as well, based on your preferences.
The exchange you choose should also provide exceptional customer service. It helps to know that you have a team to guide you if there is ever a problem. If they have an application, it’s even better since it can facilitate a personalized experience by saving your preferences, and hence saving time.
Every exchange platform charges different fees for different services. While determining fees, you also need to be aware of the basis of how exchanges charge. Are fees affected by the size of the transaction, the level of activity, both factors, or neither factor? If you do not take fees into account, you run the risk of losing a significant portion of your earnings if fees are high.
If you are an active trader, you need an exchange with a lower per-transaction fee. However, if you are someone who is buying for long-term investment purposes, fees will likely be less relevant for you.
What Should You Do?
A crypto exchange platform can make or break your crypto trading career. If you do not research well and get stuck with an ineffective exchange platform, all you will have is missed trading opportunities, a complex signup process, and delays in receiving your funds. Therefore, consider the exchange selection decision as one of the most important decisions you will make early in your trading journey.
A good choice for your trading journey is Wisebitcoin, one of the leading crypto exchanges in the world. We provide a safe and transparent virtual environment to our users with an easy-to-use interface. Our team of engineers and developers constantly work on our IT infrastructure to provide best-in-class services, and we have developed a solution-oriented approach to seamlessly meet the demands of online security and reliability for our traders.
We invite you to learn more about our platform, and if you have any questions about our crypto exchange services, you can always reach out to our support team.