Crypto exchanges rule the roost when it comes to investing in cryptocurrency. Interestingly, Bitcoin trading didn’t start with crypto exchanges, rather with P2P platforms, followed by OTC portals. Crypto exchanges were launched for the first time in 2015; it won’t be exaggerating to say that these platforms are a relatively new concept in the crypto investing and trading scene. However, riding on their cutting-edge dashboard and multi-faceted investment and trading opportunities, crypto exchanges have now become the go-to destination for trading and investing in cryptocurrency. Over the past 7 years, the crypto world has witnessed a dramatic surge in the growth of exchanges, and for all the good reasons. Read more about Multibank.io.
There are over 600 crypto exchanges today for trading and investing in crypto, and the numbers are only growing. However, while the basic dashboard is usually the same yet every such exchange comes with its unique set of fees, as well as, terms and conditions. Thus, not every crypto exchange out there would be suitable for you when you are planning to invest in crypto. Good thing is, there are some pro tips that will help you to land up with a reliable crypto exchange that will be compatible with your investing in crypto goals.
Centralized or decentralized
If you are new to trading or investing in crypto, you should know that there are two basic types of crypto exchanges- centralized and well as decentralized. Centralized ones are governed by a single authority who serves as the custodian of users’ funds. Also, centralized exchanges follow strict KYC checks to ensure only valid users. Other pros of centralized exchanges are- fast processing speed and flexibility of fiat payments.
Decentralized exchanges are built on decentralized networks and they follow a much relaxed environment in comparison to their CEX counterpart. For example, these platforms won’t hold custody of user funds nor will they run KYC checks. Also, decentralized exchanges are extremely difficult to hack. But, DEXs could be slow and sometimes, slightly unprofessional. Besides, DEXs don’t accept fiat payments for investing in crypto.
So, if you are looking to trade and investing in crypto in a highly regulated environment and don’t mind waiting for KYC checks and paying high fees, go for centralized hacks. But one thing, centralized exchanges are often the soft targets of hackers. On the other hand, if you are okay with not-so-fast processing speed and want a more relaxed environment for investing in crypto, DEXs would be the platform for you.
Your choice of assets
Do you have plans to invest in new altcoins? Well, then, check beforehand that your chosen crypto exchange holds your choice of assets.
Crypto exchanges charge fees for every activity you do, trading, deposit, withdrawal, and so on. But, the range of fees might vary from one exchange to another. Thus, the experts usually advise to take a survey of fees charged by at least 5-6 exchanges. The study would be handy to find the platform with the most competitive fees for investing in crypto.
This is certainly one of the most critical concerns to keep in mind while trading and investing in crypto with a crypto exchange. Crypto scams and hacks rose to ATH in 2021, leading to a loss of around $14 billion if not more.
A reliable crypto exchange would generally adopt advanced security mechanisms to ensure a safe and comfortable atmosphere for trading and investing in crypto. So, make sure, your chosen crypto exchange is armed with all upgraded security features like cold wallet storage and 2FA authentication.
Also, make sure that your chosen exchange carries insurance- it will help to compensate for lost user funds if the exchange ever gets hacked.
Compatible with your geographical region
This is a pointer that crypto investors often forget to check out while investing in crypto with a crypto exchange.
Almost all exchanges out there cater to investors from other countries. But that doesn’t mean that they accept investors from every country in the world. The first exchange you come across online might not accept traders or investors from your specific jurisdiction. Thus, you must check beforehand whether or not your chosen crypto exchange is willing to accept traders and investors from your particular jurisdiction.
You are going to have a hard time trading or investing in crypto if it’s always a challenge to use the exchange dashboard. Thus, make sure that a chosen exchange features a user-friendly dashboard to ensure an inviting ambience for investing in crypto.
If you are just starting out in the investing in crypto scene, look for exchanges that have separate dashboards especially designed for beginners. They also have a distinct section for veteran investors and traders.
24/7 customer support
You will know that you can put your trust in a crypto exchange if the platform is offering round-the-clock customer service by a dedicated customer care team. However, before you begin investing in crypto with that exchange, call up the exchange number in odd hours to see who picks up. If it’s an animated voice, then you might not receive dedicated personalized attention. But, you can be at peace if there is a human on the other end of the phone.
So, you have quite a bunch of tips that will help you to choose the right exchange for investing in crypto. Below are some additional tips that will make the whole experience safer and more successful for every crypto investor and trader out there.
- Do not stick to just one single exchange for investing in crypto; you should also create accounts in other exchanges
- Always invest in Bitcoin while investing in crypto
- Make sure to invest in at least 2-3 cryptocurrencies to create a diversified portfolio while investing in crypto
- Do not invest more than 2-3% of investment capital while investing in crypto for the first time. Later, as you start gaining experience, you can allot up to 5 to maximum 10%
- Do not keep all your funds in the exchange wallet- store majority of them in your personal cold wallet
- Do not share account and wallet information even with the closest pals
- Do not operate exchange account/s while on public Wi-Fi