How to choose a crypto exchange in seven (7) simple steps

One of the most important first steps when entry into cryptocurrency is to choose a crypto exchange. Choosing the wrong platform can lead to a full hack trip, a diversion and a waste of time.

First, you need to define what you want to achieve before even looking for the right crypto exchange. Is your purpose simply to invest in the long term or to conduct short-term trades on a regular basis? By assessing your needs, you can find the best for you and your needs.

Here is a short guide to help you choose the cryptocurrency that is more suitable for you.

  • Make a list of exchanges
  • Consider the reputation of each exchange
  • Review geographic locations and restrictions
  • Receive licenses and regulatory status
  • Consider their security features
  • Compare fees and other fees
  • Explore their features.

How to choose the best crypto exchange

1. Make a list of crypto exchanges

At the time of writing, there were 475 cryptocurrency exchanges, according to data from the industrial tracker CoinGecko. These trading platforms differ in terms of supported cryptocurrencies, features and services, as well as in what customers are allowed to use.

Since you are considering choosing the best stock exchange, you may want to make a list of the most suitable platforms that are tailored to your trading needs and conduct a proper analysis on them to choose the best one.

2. Consider the reputation of the stock market

Due to the fact that the cryptocurrency business is still relatively young, it is important to be aware of a company’s reputation before choosing a cryptocurrency. Many exchanges have involved malicious activities, including hacking and exit scams, putting clients in a poor financial situation.

It is crucial to explore various exchanges or legitimate sites for investing in bitcoin a simple Google search with the term “fraud” and review of results. Check out what other people are saying about sharing on social media to see if there are any complaints.

Another point to consider are the terms and conditions of the exchange, noting and keeping in mind everything that concerns or is out of place. You can easily find the terms and conditions on their website.

3. Review geographic locations and restrictions

Geographic location and constraints are at the heart of the cryptocurrency exchange user experience. A huge number of cryptocurrency exchanges serve only people from a certain geographical area. Think about this: what is the use of an exchange application if you cannot legally trade on it?

So before you apply for cryptocurrency exchange, make sure it is available from your country (and legal). Since the law and other rules on crypto and blockchain are still evolving, it is possible that your government has imposed restrictions on your ability to access and use the exchange.

4. Review licenses and regulations

Another question is where the stock exchange is registered and licensed. Most anonymous crypto exchanges may be licensed in jurisdictions that are “suitable for cryptocurrencies” such as the Cayman Islands, Malta and other countries. These jurisdictions have enacted laws that will allow cryptocurrency companies to participate in their financial ecosystems. Some stock exchanges also choose to establish themselves as tax havens to avoid paying excessive taxes.

When it comes to decentralized stock exchanges, regulations are still unclear. According to some experts, DeFi platforms certainly violate financial regulations in at least some jurisdictions. These DeFi platforms could soon be forced to obtain appropriate licenses, depending on the services they provide, and regulators will be allowed to investigate them.

5. Consider their security features

The harder it is to open an account on a particular stock exchange, the better. This implies that the exchange is not very reliable if it is too easy to create an account.

Each exchange has its own set of security measures. Verify that the cryptocurrency exchange supports two-factor authentication (2FA). If not, the exchange may not be in line with today’s security requirements.

For example, Google Authenticator and other popular 3FA third-party options undoubtedly provide better security than 2FA based on mobile text.

Some exchanges may also have additional security measures worth looking at, such as cooling wallets and custody services.

6. Compare fees and other fees

You have reviewed the list of possible exchangers and discovered a few that seem to have a good reputation, a solid security history and no history of hacks or fraud. It’s a good start, but you’ll also need to think about how each exchange will affect your investments on a daily basis.

Available fees and currency pairs are two significant features that define different exchanges.

Most exchanges charge a fee for your transactions; this cost may be based on the amount of the transaction or it may be based on your activity level or it may be unrelated to any of these variables in certain situations.

Some sites offer comparisons of cryptocurrency exchange fees and can help you determine which exchange office has the most attractive fee structure.

7. Explore their features

The importance of conducting proper research on how to choose a crypto exchange that is in line with your trading needs cannot be overstated. Exchanges vary, and features supported on platform A may be completely different from those found on platform B.

You can explore these features first hand by registering on your favorite platforms or surfing the web for unbiased reviews that clearly state which services and features are supported. Either way, you would have to invest in the business and find out for yourself.

Features you should look out for include: basic and advanced trading tools, ease of use, mobile app compatibility, customer support, among others.

Frequently asked questions about how to choose a crypto exchange

What are the registration fees?

Registering a merchant account does not include a fee, it is usually free. However, it is important to consider the amount of the fee that the exchange office charges users for trading, depositing and withdrawing funds. Binance, the largest cryptocurrency in terms of trading volume, is known for relatively low fees that many investors may find almost insignificant.

How long does it take to create a cryptocurrency account?

Depending on the exchange you choose, creating an account is usually easy and quick. On most exchanges, registering an account and starting your cryptocurrency trading journey does not take up to five minutes.

While some exchanges have simplified their registration processes, others may require users to comply with the Mandatory Knowledge Requirement of their Client (KYC), which usually takes longer.

What is the best crypto exchange?

Currently, the most widely accepted cryptocurrency exchange for traders outside the United States is Binance. This is due to its user interface, broad support for several altcoins and relatively lower fees.

For users in the United States, Coinbase seems to be the most reliable for American retailers. Regardless of the listed exchanges, it is important that you conduct appropriate research to find out which cryptocurrency exchange suits your trading needs.

Final thoughts on how to choose a crypto exchange

Here are seven steps you can take to begin the process of preparation for mediation. In the future, before choosing an exchange, you may want to consider going through the above points to guide your choices.

Whatever you do, always conduct due diligence before choosing a crypto exchange.

Related Posts

Leave a Reply

Your email address will not be published.