Lately, the world has seemed fascinated with cryptocurrency, a modern alternative to ‘real’ money, since it offers several advantages. Cryptocurrency seems like a sensible option amid worldwide pandemics and an unsteady economy.
But, before investing in crypto, you must find the best trading platform secure enough to keep your digital money safe. This is true for newcomers and experienced traders alike.
Thus, here are nine essential tips to consider when looking for the best crypto exchange platform in the market:
1. Legitimacy
It’s important to know that digital crypto companies and startups are blockchain-powered, which means they keep complete transaction data. As such, ensure to verify if the trading platform’s business plans address fundamental issues like specifying digital currency liquidity and ICO guidelines. Genuine people also should run the company.
If the startup you’re considering lacks some of these features, reconsider your options. Keep in mind that there are a lot of scams and frauds out there, and they can have a significant influence on individual investors.
Moreover, make sure to find the trading platform’s physical address. If no address is available, it’s best not to use it. You won’t understand the often-complex legal ramifications of your transactions unless you know where the trading platform is based. Especially if your account is hacked, it will be much easier to contact them if you know their physical address.
2. Reputation
When choosing a crypto trading platform, look for one with a solid reputation. Someone may try to persuade you to focus on a lesser-known platform, but experts advise against it. Even with very dependable systems, the world of cryptocurrency is still new and full of risks. Assurance is everything here. If you don’t want to lose your money, find a trading platform with a good reputation and security.
3. Security
The more difficult it is to open an account at a specific cryptocurrency trading platform, the better. A trading platform’s trustworthiness can be determined by how easy it is to open an account. What happens if your digital assets vanish? It may be challenging to locate and retrieve your funds in some circumstances.
It’s best to store most of your digital assets offline—often an option for staked coins. Trading platforms should also do this with assets that aren’t required for liquidity. The concept ‘cold storage’ refers to funds stored in a crypto wallet offline and, therefore, not easily hackable.
4. Jurisdiction
This factor is simple since it’s a yes or no situation. Does the platform serve your country and state? If you respond no, then don’t use the trading platform.
Some trading platforms also feature country-specific websites. For example, American users may need to visit ‘trading platform.us’ instead of ‘trading platform.com.’ The jurisdiction of a trading platform reflects both their target market and where they are permitted to operate under cryptocurrency laws.
5. Payment Methods Available
Payment options vary amongst crypto trading platforms. Some accept credit or debit cards, while others only accept bitcoins. It’s vital to learn more about the payment method, so you know what’s available and whether it’s safe to acquire cryptocurrency that way.
Check how long it takes the platform to conduct your transaction and provide your digital currency. Some trading platforms handle it instantly, while others take days. You may ask about instant transaction processing if speed is vital to you.
6. Liquidity
Among the considerations in investing in cryptocurrency is understanding liquidity. Traders require liquidity to trade at any moment without disrupting the market. This means a trading platform’s volumes must be sufficiently busy on any day.
A trading platform needs a lot of users who hold a lot of assets and move them regularly to attain that volume. If few orders are available, no one may be willing to purchase or sell the coins an investor desires. Buying may also cause prices to rise, causing an investor to overpay. Selling may cause prices to fall, reducing possible earnings.
Liquidity is critical during volatile periods in the crypto markets. Less liquidity can heighten volatility, causing prices to rise or fall more than usual.
7. Fees and Pairs
You’ve sifted through the list of prospective trading platforms and identified several with excellent reputations, security records, and no history of hacks or frauds. That’s excellent. But now, you must analyze how each trade will affect your daily investing.
The fees and currency pairs that trading platforms offer vary greatly—most charge a fee for your transactions, which might be based on the quantity, activity level, or both.
Learn about costs and how they may affect your investment style. Do you intend to be highly active and transact daily? If so, look for a reduced transaction cost trading platform. You should also know the accompanying gas fees if you’re considering trading ether.
Another factor to consider is your trading platform’s cryptocurrency pairs. Some of the world’s most popular and profitable trading platforms only provide a limited number of digital currencies. You may want to seek elsewhere for obscure altcoins. Remember how your investment strategies may affect the features (and restrictions) of whatever trading platform you choose.
8. Deposit and Withdrawal Limits
Even if you intend to hold crypto for the longest time possible, you may need to withdraw at some point. While most trading platforms do not impose a minimum deposit, they may limit how much money a customer can withdraw or deposit in a specified timeline.
Those looking to move considerable sums of money should note these restrictions. Even the best trading platforms may have strict time restrictions on how much money users may move.
9. Customer Service
Some trading platforms have poor customer service. This can be a severe problem since you’ll need a trading platform that can immediately respond should something goes wrong with your account. This is a significant benefit if you find a service-oriented trading platform.
Conclusion
Cryptocurrencies are gaining popularity for a good reason: they provide security and reliability in a world of economic uncertainty. Remember that technology is relatively unexplored and that you must take extra precautions to protect your funds. Thus, it’s best to research and look around for the ideal crypto trading platform that suits your needs before taking anything out of your pocket.
