Cryptocurrency has had a rocky past, but it’s cemented itself in mainstream life as an investment worth looking at. The price of Bitcoin has gone up and down over time, but it usually returns to previous highs and keeps going higher.
Cryptocurrency is so popular that 21% of Americans have held some. If you want to join them, you’ll need to find a reputable cryptocurrency exchange to make the purchase.
If you plan to dive head-first into the crypto market, it pays to select crypto exchange platforms that offer everything you need for success. Keep reading to learn how to look through your options for exchange platforms and select the right one.
Consider Your Jurisdiction
The first important factor to consider when picking a cryptocurrency exchange is the jurisdiction they operate in. Cryptocurrency isn’t the wild west like it used to be. There are laws that govern how crypto exchanges operate inside countries.
This means it may not be legal for you to set up an account on every exchange. A crypto exchange needs to set up shop in a country and follow the rules before allowing citizens to deposit money.
Examine what the rules are in your country and look for exchanges that follow those rules. Most websites will tell you which countries are allowed. Make a list of the websites you can use and start researching more about those exchanges.
Trading Features
You may not need many features if you only want to buy and hold cryptocurrency. You just need a few buttons to buy and sell, and a way to connect your bank account.
But things are different if you want to trade actively. You won’t get enough information about the trades you’re making if you don’t have the trading features offered on advanced platforms.
Consider your crypto trading goals and research the features you need to make informed decisions. This means having access to price charts, plotting tools, stop losses, and other advanced features. You should be able to see overviews of a trading platform’s features to determine if it can meet your needs.
Check the Choice of Cryptocurrencies
There is much more to cryptocurrency than Bitcoin. Since Bitcoin was created a decade ago, many more advancements have led to more cryptocurrencies being created. Some blockchain networks even have cryptocurrencies that exist on them.
This opens up many more opportunities if you want to invest in less-known coins. However, not every exchange will have what you’re looking for.
Most exchanges will have big players, so that won’t be a problem. But the process of listing newer coins is long. You won’t find every coin you’re interested in on all the big markets.
Examine the coins that are available on the exchanges you’re considering. Make sure they list all the coins you want or most of them.
Look for Great Security
Security is a big deal for a cryptocurrency exchange. You’re providing an exchange with sensitive information and allowing them to hold your crypto. Your crypto and personal details are at risk if they make a mistake.
And when $3 billion in crypto gets stolen yearly, you can’t afford to make a single mistake.
The first thing to look for is account security. At a bare minimum, you should be able to set up two-factor authentication (2FA) on your account. A 2FA authentication means an attacker needs more than your password to access your holdings.
It’s also wise to read the past news about an exchange before signing up. Look to see if it has had security issues in the past and what was done to address those problems.
Examine the Trading Fees
Trading fees are critical to consider when buying and selling cryptocurrency. It’s not a big deal if you’re only buying coins to hold them long-term. But if you plan to trade actively, you have much more to consider.
You see the most problems when you make a lot of short-term trades. You rely on thin margins to make a profit in these situations. If you don’t account for trading fees, otherwise good trades will end up losing you money.
Each exchange has different trading fees. Look into what they are and how they will impact your crypto trading strategy.
Look at Insurance
One of the big problems crypto has is the lack of insurance. With traditional investments, you have protection from the government. If something bad happens outside of a market crash — such as a bank crash — you can recover your funds from the government.
The same isn’t true with cryptocurrency. Since it’s still an unregulated market, you won’t be protected from cryptocurrency problems. If you lose your funds, they are gone, and you aren’t getting anything back.
However, some cryptocurrency exchanges offer insurance on their own. They cover deposits up to a certain amount in case of platform issues that result in losses.
There are also crypto companies that offer additional insurance for a price. It will cost you more money, but at the same time, you’ll have coverage whenever problems occur.
Verify Customer Support
In the ideal scenario, you won’t need to contact customer support at a crypto exchange. Everything will work great, and you can make every trade you want. Unfortunately, this won’t always happen.
You can face many issues when trading on a cryptocurrency platform — anything from the inability to deposit money or problems with the trading software. The last thing you want is to be unable to contact someone for help when this happens.
Look for customer service reports for a platform’s customer service. You should quickly get a response to your questions and not be questioned about things going wrong.
Check for an App
If you’re like many people, you don’t spend as much time on your desktop computer as you used to. Now that you have mobile devices like tablets and smartphones, you can access the internet and entertainment from anywhere you have an internet connection.
This means you may want to access your chosen exchange from several devices. However, not every website has a design that works great on smaller screens.
The good news is that many crypto exchanges have mobile apps or responsive designs to make navigating on small screens easier. Make sure the exchange you decide to use has those features to make sure you can trade crypto anywhere.
Verify the Liquidity
Liquidity is another factor to consider when picking a cryptocurrency exchange. Being able to buy a coin is all well and good. But you also need a way to trade for other cryptocurrencies without waiting forever for the transaction to happen.
Liquidity helps make transactions process quickly. A cryptocurrency’s liquidity is the amount of cryptocurrency an exchange has on the market. Combine that with enough volume, and you can buy and sell any coin you want quickly.
But not every website has excellent liquidity. Check into this information to see how easy it will be for you to make trades.
Confirm Withdraw and Deposit Options
One of the most critical parts of using a trading platform is depositing and withdrawing money. Depending on your location, you may not have many options available to do this.
Start by checking your deposit options. You should be able to connect your bank account at a bare minimum. Platforms can also offer credit card deposits, PayPal, and other payment methods.
You also need a way to withdraw your cash. If you can connect your bank account, that’s one of the best ways. It’s also possible to send your Bitcoin to ATM services if you have BTC ATM locations near you.
Check Reviews
An important step to finding a trading platform is to check other people’s reviews. It’s not hard to put a slick interface on a website and write copy that makes you appear like the best choice. However, that doesn’t mean you can meet your customers’ demands.
Check what other people say about trading platforms before you sign up. A quick search will show you a list of exchanges and provide a place to read reviews.
Look through the reviews carefully for red flags that make it not worth using a trading platform.
Select Crypto Exchange Platforms Carefully
Picking an exchange platform is an important decision. You’re giving them your identification details, financial accounts, and access to your cryptocurrency holdings. If something goes wrong, it can lead to you losing your cryptocurrency — and worse, having your identity and financial details stolen.
That’s why you must take care when you select crypto exchange platforms. Focus on finding secure platforms that safeguard your data and give you the tools required to make cryptocurrency trades. Now that you’ve read the guide above, you’re ready to make your choice.
Do you plan to expand your financial investments outside crypto after building a portfolio? Check out the financial section on the blog to learn more great tips.
