Cryptocurrency

Six Factors You Should Consider Before Selecting a Cryptocurrency Exchange

Given the rise in the popularity of cryptocurrency, there are many people who have invested in the digital asset and reaped a high reward as well. When you invest in crypto, you should conduct extensive research on market trends and fluctuations, and be confident in the cryptocurrency you are investing in.

The arrival of cryptocurrency left everybody astonished as it allowed people to pay off their debts, which were almost impossible to pay due to the lack of fiat currency flow. Before you select a cryptocurrency, it is best to consider the factors mentioned in this article so you can make a well-informed decision.

Prior to learning how to buy Bitcoin or any other currency, it is important to choose a reputable and trustworthy cryptocurrency exchange. Let’s take a look at the factors you should consider.

  1. Check for Availability

There are a few currencies that might be subject to regional limitations. It is best to get in touch with your bank or trading platform to make sure that your country accepts the fiat currency of your country.

Furthermore, the list of the currencies not available in your country keeps changing, meaning there’s a possibility that the currency available presently might not be accepted in the future. 

  1. Accessible Cryptocurrencies

Selecting a cryptocurrency platform before doing your due diligence is a disaster waiting to happen. While an exchange platform might seem like the best deal on the outside, that’s not always the case. Most exchange platforms only offer a number of cryptocurrencies. This means you’ll only have a small bunch of investments to choose from.

The best way to be prepared against such restrictions is to research the crypto’s you’re interested in and find out if the exchange allows trades for those particular currencies. Moreover, the platform you choose should be authentic and transparent about its trading methods to avoid partaking in fraud.

  1. Fund Security

It is crucial for people to invest their hard-earned money in the right asset, particularly, when the medium is online. This can be quite a life-changing decision so you want to make sure that the amount is secure. When you are researching how to buy Bitcoin, you will come across ways to store the coins in a digital wallet. To make sure your investment is safe, you should assess the fund security, especially if you’re making large deposits. Most exchange programs incorporate centralized fund storage, meaning the platform’s reliability depends on their security measures. Hence, it is important to look into the safety guidelines and determine whether they’re a suitable option for you.

SSL site security certificate, multi-layered verification with withdrawals, and two-factor authentication are a few features most cryptocurrency platforms have. You should be able to find out more about their security and precautionary clauses on their website.

  1. Level of Complexity

For someone who’s new to cryptocurrency, learning a complex trading mechanism can be quite the challenge. Therefore, consider looking into platforms with simple, easy-to-understand trading mechanisms.

The majority of exchange platforms offer new users a free trial. You can utilize this time to learn the trading policies while also comparing the features and currency options to other cryptocurrency exchange platforms. Doing this will allow you to pick the platform that’s best for you, without losing any valuable investments.

  1. Trading Fee

Every time you buy, sell, or trade, a fraction of your transaction is deducted as a trader’s fee. While most investors may not notice, with time, this amount can grow and impact the profits. Investors who prefer short-term trading might want to consider other options.

Before making a choice, make sure the trading fees are set to a minimum percentage and are market competitive. Furthermore, a spread fee is collected based on the difference between the bid and the offer price. This is an additional percentage that’s added to your transactions and may cost up to 5% to 6%, depending on market conditions. 

  1. Reputation

With cryptocurrency, the reputation of a platform or exchange is also quite important. This new world of online trading is generating a lot of interest from people across the world and rightly so.

In the initial stages of trading cryptocurrency, many platforms can be tricky to navigate. To make sure that you are on a suitable one, research extensively and perform a thorough background check. You can browse through Google or read reviews/ratings of users who engage in similar activities. In fact, the best way to find a reliable and reputable cryptocurrency exchange is by browsing public forums and inquiring about the pros and cons of each cryptocurrency exchange/platform.

As a beginner, trading in cryptocurrency can be overwhelming. However, cryptocurrency is slowly but gradually dominating the financial markets. Those who knew how to buy Bitcoin and other cryptocurrencies when it was newly introduced are now sitting on a wealth of profit.

By noting these six main factors, we hope to help you understand what to look for (and what to stay clear of) while selecting a cryptocurrency exchange platform.

About author

Articles

Morris is a Technology enthusiast and a writer by night. He has been a part of TheTechly for quite some time and he contributes knowledgeable news articles from the Technology niche.
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