If you’re a crypto investor or even an intending one, you’ll need to use a crypto exchange at some point in your journey. You may not need to trade or store your crypto, but you’ll definitely need it at least to buy crypto. Whatever you need it for, there important things you should note when choosing an exchange.
These things apply to both centralized exchanges like Binance, and decentralized exchanges like Uniswap. They are the platforms from which you can buy digital currencies like Bitcoin, Ethereum, and the others. Although all exchanges are basically used to buy or sell crypto, not all are equally good.
It is thus important to choose your platform wisely and since you don’t have the time to try all of them, we save you the effort by bringing you this list of things you should have in mind when deciding which platform to use for your crypto buying and selling, and here they are.
Security
Above all else, security is a major concern when it comes to crypto transactions. If you don’t want to fall victim to the many traps set for unsuspecting crypto investors, you better mind the security of the platform you wish to use.
Does the platform have measures such as two-factor authentication (2FA) which help to secure your account? Is it insured in case something happens to your funds? What is the security history of the exchange etc., are critical questions you need to ask.
Exchanges like Kraken have never been breached while Binance and Coinbase are insured in case of any unfortunate incidents. These are the kind of exchanges you should use. This does not suggest you not use smaller exchanges, just don’t go on an obscure exchange that no one knows about and you’ll be fine.
Fees
Fees can be a burden on the wrong exchange. Now depending on your country of residence, one exchange may be more expensive to use for you than another. There are different factors responsible for this, but we’ll not go into that in this article.
You need to research fees on a secure platform of your choice to make sure the fees favor you in particular. This can save you a lot of money as fees add up quickly, and you’ll be happier for it. Do your research before using that platform.
Ease of Use
There’s no point choosing a secure exchange with low fees that you can’t use easily, right. Crypto transactions are risky enough on their own, you don’t want to end up using a difficult platform that may cause you to lose your funds just because you couldn’t navigate it.
Does the platform have a simple user interface that other people can attest to? This doesn’t apply if you’re experienced in using exchanges, but you wouldn’t be reading this article if you were an experienced trader, would you? Take your time to pick a beginner-friendly exchange.
Liquidty
Not all exchanges have sufficient liquidity for trading assets. If you wish to not get stranded waiting for a transaction that is stuck due to low liquidity, find an exchange with good historical liquidity. What is liquidity? It is the availability of assets to trade against other assets.
Even if an exchange has a history of high liquidity, it may not have good liquidity for the asset you wish to trade, so check it out first. How many buy and sell orders are their for your asset on the particular exchange you wish to use? This will save you time and money in the end.
The Team
Does the exchange have a well-known team behind it? Have you heard the name of its founders anywhere? You should use only well established exchanges and not some exchange with its team in the shadows.
If it has a well-known team, its chances of just folding up and running away with your funds is reduced significantly, so do you research before making up your mind. Whether a beginner or seasoned investor, keep these points in mind and you’ll be just fine.
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