So you’ve finally decided to get involved with cryptocurrency. You’ve seen all of the memes about people making a ton of money, and you want a piece of the pie. The only question is: how do you start?
Buying cryptocurrency isn’t as easy as buying a product online or exchanging your currency for a foreign currency. No, you have to use a crypto exchange. There are so many to choose from!
We’re here to talk about how to choose the right crypto exchange. Read on for our quick tips!
Read Online Reviews
Reading online reviews is one of the best ways to narrow down your options when you’re looking for a new crypto exchange to use. This is especially true if you’re a beginner. If you don’t know what to look for, how can you know whether or not you’re using a good exchange?
You can look for reviews in multiple places.
Often, you can see customer reviews on the app store and online from people who have used (or who are currently using) the crypto exchange in question. These give you a true look at what real people think of each exchange and you can be reasonably sure that those people are being honest. You can also find real user reviews on forums and sites like Reddit.
You can also look for full reviews written by experts. You can check out an in-depth review of Binance written by someone with plenty of experience in the world of crypto, watch YouTube reviews on Coinbase from crypto YouTubers, and more. These people will talk all about the pros and cons of each crypto exchange from a professional point of view so you can make an informed decision.
There’s no reason you shouldn’t let someone else make the decision for you. Learn from people who already know what they’re talking about and you’ll have a better chance of picking a worthwhile crypto exchange.
Consider the Importance of Liquidity
Liquidity: what does it mean when we’re talking about cryptocurrency? No, it’s not literal liquid. It’s the potential to turn your money (cash) into crypto coins or vice-versa, and fast.
Cryptocurrency is volatile. Prices can change significantly in minutes, and that means that if you can’t buy or sell quickly, you may end up losing serious money or missing out on incredible gains. It can be a huge disaster, and there’s nothing you can do about it after the fact.
You can kind of determine liquidity by looking at the trading volume of the crypto exchange. You want to see a high trading volume. This implies that it moves quickly and you shouldn’t have a problem getting your money or your cryptocurrency when you want it.
It’s also a good idea to choose a crypto exchange with longevity and a good track record.
Take Note of Fees
Trading cryptocurrency isn’t free! There are fees involved, and you need to know them before you start making any commitments. Fees are always going to be a percentage of your trade (whether you’re buying or selling) and they often fall with higher volumes.
You can expect fees of up to 5%. This sounds like a lot, and for people who trade often, it is. Sometimes fees vary depending on your payment method or the type of transaction you’re completing, so make sure that you get all of the details.
Some platforms have fees of under 1% for some transactions and closer to 5% for others. Don’t let surprise fees sneak up on you.
Fees may seem like the largest consideration, but they shouldn’t be. While you want to minimize your fees, remember that if you’re trading often and making a good profit because of the other good qualities of your crypto exchange, a high fee may be worthwhile.
In other words, take note of fees, but don’t make your decision based on them.
Don’t Skimp on Security
Any time you’re letting another entity hold your money, you need to keep security in mind. It’s easy to forget about it. After all, these crypto exchanges are being heavily marketed and everyone is using them, so they must be safe, right?
Wrong. Unfortunately, there are plenty of opportunities for things to go wrong on a crypto exchange. Cybercriminals understand how much money can be made from the average crypto exchange. They will do anything they can to infiltrate.
You need to choose an exchange that protects you and your money.
Hundreds of millions of dollars in customer assets have been stolen over the years, and while the crypto exchanges are responsible for reimbursing their customers, there’s no real guarantee that that will happen.
Two-factor authentication is a good start, but look for exchanges that use as many authentication measures as possible. Yes, it’s annoying to log into an exchange that’s so heavily guarded, but that annoyance is worth it if it means you won’t be stolen from.
Check on the Available Coins
Did you know that not all crypto exchanges allow you to buy every type of coin? That’s right. While there are thousands of coins to choose from, many exchanges limit you to the most popular ones. This means it’s difficult to “get in on the ground floor” of a new coin.
There are pros and cons to this. Often, new coins never go anywhere, so if you can’t see them, you’ll save yourself the heartache of a bad investment. On the other hand, you’re a responsible adult who can make your own purchasing decisions, so perhaps you want as many options as possible regardless of the potential outcomes.
Either way, pick an exchange that offers the coins you want.
Which Crypto Exchange Will You Use?
Buying and selling crypto is more confusing than ever. There are so many options for coins and exchanges that it’s difficult to even get started! Hopefully these tips will help you set yourself on the right track.
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