5 Things to Consider When Selecting a Crypto Exchange

The crypto industry is blessed with several cryptocurrency exchanges, giving investors various options to choose from. 

Even though each exchange claims to be the best with its enticing features and services, the selection process may be challenging for newbies since they have very little or no knowledge about how the crypto market works. 

Despite the challenge, new investors are constantly trooping into the market to cash in on the current crypto frenzy. 

A cryptocurrency exchange is considered the safest and fastest way of buying and selling cryptocurrencies, as new investors joining the industry will most likely make their first purchase on these platforms. 

5 Factors To Look For When Choosing A Crypto Exchange

Here are the five things to consider before selecting an exchange. 

Availability In Your Country 

Although all legit crypto exchanges are online-based, not all can be accessed from all parts of the world. 

For instance, an exchange that operates in the United States may not allow United Kingdom residents to access its platform. 

This limitation is mostly due to restrictions placed by financial authorities in a bid to protect its citizens. Before an exchange is allowed access in a country, the firm would have to meet certain requirements, including proving its authenticity. 

To not get disappointed, it is ideal that you contact the exchange’s helpdesk to know whether your country is supported. 

If your country is not on the list, do not try to get smart by using a virtual private network (VPN) to gain unrestricted access to the platform because it is an illegal act.

  • Security 

Using a crypto exchange involves trusting your funds with a firm and believing that it will be kept safe. 

Nobody wants a situation where funds will go missing overnight, stolen by the exchange, or hackers outside the firm due to a major security breach. 

Conduct adequate research about the firm, including its background, founders, mode of operation, and legitimacy. 

Ensure the firm does not have any past criminal dealings or involved in controversies that may put your money in jeopardy. The type of security measures put in place should be considered because it protects the exchange of being attacked, with large amounts of funds and information carted away. 

The crypto exchange should be equipped with advanced Secure Socket Layer (SSL) and encryption technology, which helps hide the true meaning of information entered into the platform. 

  • Availability Of Multiple Cryptocurrencies 

Despite the availability of more than five thousand cryptocurrencies, most exchanges only offer a selected few, including Bitcoin (BTC) and Ether (ETH). 

Supported cryptos vary across exchanges because each trading firm has specific guidelines it uses to add new projects. 

As your trading journey advances, there is a likelihood that you will develop an appetite for more crypto assets. 

An investor who once started with the largest cryptocurrency by trade volume, BTC, may feel the need to adopt one or more promising assets in the future. 

Your chosen crypto exchange should have a wide array of crypto assets listed on the platform, creating an avenue for you to diversify your portfolio should the need arise. 

  • Multiple Withdrawal and Deposit Options 

Before choosing a cryptocurrency exchange, you should consider what type of payment options are supported. 

Some trading platforms accept only PayPal for transactions, while others support several payment methods, such as credit and debit cards, Skrill, Netteller, bank transfers, and cryptos. 

A new user should choose an exchange that supports fiat currencies since you do not own a cryptocurrency yet. 

You should ensure that the platform supports multiple payment options so that you could still commence your trading journey in the event of a failure in one of the payment channels. 

Also, users should note how quickly transactions are processed across exchanges, with some platforms offering instant transaction processing while others take days to facilitate transactions. 

  • Fee Structure 

The amount of fees users are prompted to pay for transactions is another important factor you should consider before selecting a crypto exchange. 

Crypto trading platforms charge a certain amount of fee when you deposit, withdraw, and trade.

It would be best if you chose an exchange that offers very low and competitive fees instead of a platform that requires you to pay large amounts for fees. High trading fees negatively affect your profit. 

Sometimes, exchanges introduce zero-fee trading as a promo for a specific period to lure more traders into using the platform. 

Despite the offering, you should find out the firm’s fee structure in order to know if you can cope when it is reintroduced. 

Conclusion 

It could be challenging for new traders entering into the crypto space to choose the most suitable trading platforms that would give you a smooth trading experience. 

New and existing users should be informed of the latest cryptocurrency news to stay updated about what exchange has the best offerings. Do not rush into selecting an exchange without first considering the factors mentioned above. 

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