Major Things To Look Out For When Choosing A Cryptocurrency Exchange

If you’re planning to involve yourself in cryptocurrencies, the first thing to do is to look for an exchange where you can make deposits and start trading. There are lots of cryptocurrency exchanges where you can trade but knowing the right one to use is very important. There’re a number of factors to consider before choosing a cryptocurrency exchange. This post will enlighten you on these factors.

choosing a cryptocurrency exchange

It is very essential for you to note that not all cryptocurrency exchanges accept fiat currency. Most exchanges only allow coin deposits (majorly Bitcoin) in order to buy other coins or tokens. You can follow the steps below to easily deposit Bitcoin onto any exchange of your choice.

How To Deposit Bitcoin On An Exchange Using Fiat

  • Fund your local crypto exchange account from your bank account to buy Bitcoin.
  •  Register on a cryptocurrency exchange that offers a variety of other coins and tokens. Verify your account if required.
  • Lastly, transfer the Bitcoin which you bought from your local crypto exchange to your new crypto exchange. When done, you can start buying other coins and tokens which are available on the exchange using your Bitcoin.

What To Look Out For When Choosing A Cryptocurrency Exchange

It’s very important to carry out a little research on an exchange before you start trading. Below are a few things you need to consider before you start trading on an exchange

The most effective way to know how reputable an exchange is to go through reviews from individuals and other well-known industry websites. You can also visit forums like BitcoinTalk and Reddit to ask questions.

Trading Fees
Make sure you look out for fee-related information on the exchange you’re planning to use before you start making deposits. Trading fees differ from one exchange to the other, so make sure you really understand deposit, transaction and withdrawal fees.

Available Coin Pairs
Don’t ever ignore this particular factor when choosing a cryptocurrency exchange. It’s very important to know if the coin or token you want to trade is on an exchange before going in, isn’t it? A lot of cryptocurrency exchanges offer just a handful of coins, so getting one that offers diverse options is very essential.

Payment Methods
It’s very important to know what kinds of payment methods are available on the exchange you wish to choose. Some exchanges accept Credit & debit card payments, wire transfer, PayPal etc. It may not be convenient for crypto traders to use an exchange with limited payment options.  Note that buying cryptocurrencies with a credit card will always require ID verification as there is a huge risk of fraud and higher transaction and processing fees. Buying cryptocurrencies with wire transfer will take longer periods to process.

Ease of Use
A good crypto exchange should be easy to use and also have a clean site interface to aid easy navigation. Using a site with complicated interface may be at times frustrating. Therefore, try as much as possible to take note of this factor when making your choice of exchange.

This refers to the ease of buying or selling in the market. A high liquidity signifies that there is a large amount of buyers or sellers. It is good to have high liquidity as it leads to better price discovery.  It also enables traders to transact faster.

Exchange Rates
Exchange rates of coins and tokens may vary on different exchange platforms. Don’t be surprised that you can actually save up to 10% while trading if you do your research well when choosing a cryptocurrency exchange to use.

Verification Requirements
Most of the Bitcoin trading platforms in the US and the UK require some sort of ID verification before deposits & withdrawals can be made. Some exchanges give their users an opportunity to remain anonymous.  ID verification protects exchanges against scams and money laundering, but verifications that take longer periods can be sometimes frustrating to the users.

Geographical Restrictions
Some exchanges offer specific user functions to only traders from certain countries. Be sure that the exchange you’re willing to use offers full access to every platform tool and function in the country where you reside currently.

This is a one of the most vital factors when choosing a cryptocurrency exchange. An exchange’s level and type of security is very important in making sure that your coins are safe. Few security practices an exchange should put in place are:
  • Keeping traders’ deposits in a cold storage. By doing this, hackers can’t get access to them.
  • Implementation of 2-factor authentication (2FA). This increases the security of your trading account.
  • Email verification. A confirmation email will always be sent to your registered email address for every transaction.

Good Customer Support
It’s very important to note that a responsive customer support would save you lots of time and anxiousness. Issues such as deposits/withdrawals, verification process, funds reflection, trading orders and many more have to be solved as quickly as possible by the exchanges. A cryptocurrency exchange with poor customer support could cost you time, money and even your well-being.

There is a constant increase in the number of cryptocurrency exchanges in the world, which can be baffling most especially for an investor who is inexperienced. Choosing a cryptocurrency exchange requires a lot of research and this can be time-consuming and also stressful at the same time. It’s recommended to get professional advice from people who know better if you’re not sure about the exchange to use.

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  1. Nice post. You've got good content here. I will surely visit again.

    1. Thanks for visiting. You can also join us on social media. All you need to do is navigate to the top of the site for our social media links.

  2. I currently make use of Binance and some other great exchanges to trade. Nevertheless, the points listed above will be of help to beginners who have still not decided which exchanges to use.

    1. It's good to know that you're already done with choosing your choice of cryptocurrency exchange. Good luck.