Key Points When Selecting Cryptocurrency Exchanges

Posted by James Andrews on August 4th, 2022

Crypto Mania is still in full swing. From enterprising millennials to large financial institutions, everyone is eager to learn more about the advantages of this fantastic technology. More importantly, they want to know how to capitalize on the craze. This includes deciding on a bitcoin exchange. Start trading here: multibank.io

As cryptocurrency grows in popularity, more people may wonder what platform they should use to begin purchasing and trading these assets. There are dozens of exchanges to research, and individuals' levels of bitcoin and investment comprehension vary.

Regardless of experience, here are six factors to consider when selecting a bitcoin exchange:

Authenticity and security

It is critical to research to ensure you are selecting a legitimate and secure site. The early example of Mt. Gox, as well as the most recent attack of Coincheck, serve as severe warnings to prospective cryptocurrency investors to investigate the security protocol of the exchange.

One of the most serious challenges in the bitcoin business today is pump-and-dump tactics. It is the responsibility of exchanges to avoid this fraud. And this is where tokens come in handy. It is the role of exchanges, with the use of tokens, to prevent fraud.

Method of purchase

The manner of obtaining cryptocurrency differs depending on the platform. Some exchanges need bank transfers for deposits, while others accept PayPal, credit and debit cards, and only bitcoin for purchases.

If you do not have any cryptocurrencies before joining an exchange, you must find a platform that accepts fiat currency to enter the market. It is also vital to consider how long it takes to make a purchase. Some platforms process transactions almost immediately, while others take days or weeks.

Supported tokens

crypto tokens

Most exchanges support Bitcoin and Ethereum, but cryptocurrency investors understand that this is only the tip of the iceberg. The supported cryptocurrencies vary significantly between exchanges; some platforms, such as Binance, trade a vast variety of altcoins, whilst Coinbase trades only four main cryptocurrencies.

You can further hedge your bets with "stable coins," which are frequently employed by traders to protect against the volatility that characterizes cryptocurrency markets. TrueUSD, for example, is a USD-backed cryptocurrency that is directly collateralized through a bank network.

It uses custodial accounts to provide token holders with legal protection and direct banking, so the corporation never has direct access to cash. Furthermore, custodian accounts enable frequent auditing and provide comprehensive legal protection.

TrueUSD provides a uniform, stable currency across digital exchanges by being backed by the US Dollar. Since the SEC subpoenaed Tether, the current USD stable coin, a fresh alternative is desperately needed.

Regardless of your risk tolerance, find an exchange or exchanges that support all of the cryptocurrency tokens you want to buy. These exchange rates are influenced by metrics like 24-hour volume and market cap, which should be monitored.

Trading platform, P2P exchange, or broker

There are three basic types of cryptocurrency exchanges, and you should be aware of them before selecting a bitcoin exchange.

It is a cryptocurrency market where users can purchase and trade cryptocurrency. The platform is the only thing that each user interacts with. There is also a charge for each transaction.

P2P exchanges bring buyers and sellers together to engage directly, with both parties agreeing to each transaction. P2P exchanges help reduce network congestion while also keeping a safe, trustless mechanism for crypto trading.

Fee structure

Transaction fees and fee structures fluctuate amongst exchanges, which is important to consider when selecting a cryptocurrency exchange. Some exchangers provide reduced fees. When the exchange's token is used to finalize transactions, this happens. It can also refer to the number of tokens held. Others simply charge a transaction fee on sales, enabling free purchases.

User interface and user experience

One of the most important factors for the average crypto investor is the user interface and functions. Whether you are a seasoned cryptocurrency trader or purchasing bitcoin for the first time, an intuitive interface and a positive user experience help users make more educated and efficient decisions on the exchange. The user experience is subjective, and different interfaces will appeal to different people.

However, in the next few years, the exchanges with the "best" user experiences will witness the greatest increase in transaction volume. Because the value of an exchange is determined by its user base, exchanges can increase their user base and transactions by improving their user experience. Kucoin has shown this degree of growth because they provide customers with free tokens in exchange for using their exchange.

Weighing All Factors

Many factors must be considered while selecting a bitcoin exchange. Exchanges are all distinct means of constructing security safeguards, managing users, constructing their networks, and constructing a user experience.

Overall, strive to be aware of all of your possibilities and consider how you can identify the exchange that will be safe for the time being while also being the most profitable in the long term. Finally, don't be scared to sign up for multiple exchanges and take advantage of them all.

Customer Service

customer service

Even the best cryptocurrency exchange program can occasionally encounter issues. Newer users, in particular, may have a number of questions about the fundamentals of cryptocurrency and how the exchange operates.

Sometimes the need for customer service is urgent, and money is at stake. Crypto markets are volatile and waiting days for a response from customer care could have serious financial ramifications.

As a result, investors should investigate the reputation of an exchange's customer service. Do they react quickly? Are customers generally happy? Is there any emphasis on excellent customer service in the exchange?

Insurance

Some exchanges insure some or all the funds held by users. This could be an appealing selling point for investors who are wary of sending their money to a company with which they are unfamiliar. An exchange that provides insurance could protect investors from losses if anything tragic occurs (like a hack or employee theft).

Because insurance plans differ, conducting independent research to learn more about a specific transaction would be necessary.

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James Andrews

About the Author

James Andrews
Joined: August 4th, 2022
Articles Posted: 1