How to Pick a Bitcoin Exchange: Everything You Need to Know
If you thought cryptocurrency was just a fad, think again. While many people have had doubts about the longevity of cryptocurrency, you will soon realize the value of crypto investing by taking a look at the numbers. Bitcoin is by far the most successful cryptocurrency on the market today, with a current market capitalization of $480,105,286,947.47 USD. That’s a fair chunk of change. But as a beginner investor, it’s no secret that Bitcoin investing is volatile. If you want to learn more, such as how to pick a Bitcoin exchange, this blog is for you.
Crypto Exchange: How Does it Work?
A crypto exchange is basically another word for platform. This platform allows for buying and selling Bitcoin in a safe and convenient manner. You can also exchange your local currency for cryptocurrency on these platforms — hence the term ”exchange”.
In most cases, using a crypto exchange platform works like using a brokerage account. You open the account, put funds in it, and buy and sell securities (much like buying and selling stocks, bonds, ETFs, etc.). In short, you can buy and sell cryptocurrency on the stock market with this account.
Crypto exchange platforms intend to make the buying and selling process seamless, convenient, and secure. As a user, you don’t have to understand much about the inner workings of these platforms, as it’s their intention to make the trading process easy for you!
Check out cointiply.com if you’re looking to get a head start on earning Bitcoin. While there are plenty of options for exchange platforms, let’s take a closer look at how to pick the right one:
This is one of the most important considerations to look at first. The jurisdiction of exchange platforms refers to whether it serves investors based in your country or region. This jurisdiction determines an assortment of cryptocurrency rules, regulations, and tax obligations you’ll have to follow.
If the exchange platform does not serve your region, move on and look for another.
Is it User-Friendly?
This is super important if you’re starting out as a crypto investor. You need to look for a platform that’s easy to use and understand to get your money’s worth without making the wrong move.
Some exchange platforms might appear daunting, with complicated interfaces, charts, and an overwhelming amount of information. If it looks too complicated, it probably is. Look for newbie-friendly platforms to begin with. As you learn and grow in your crypto investing expertise, you can always switch platforms to suit.
Available Trading Partners
This is also referred to as liquidity. This means that an exchange platform has a big enough user base and a high enough volume of orders so that you can make crypto trades at any time of the day.
With enough liquidity, you have a plethora of trading partners to choose from in order to make good trades. You need these trading partners to increase your chances of buying and selling Bitcoin at the best price.
It’s a no-brainer that the platform you choose should exchange the assets you intend to invest in. It’s no use if the platform does not offer trading in your preferred asset, whether it’s Binance coin, Ethereum, Solana, Bitcoin, etc.
Bear in mind that not all exchange platforms offer smaller, lesser-known cryptocurrencies. But most will offer the popular variations such as those mentioned above. If you’re interested in trading smaller, more exotic types of crypto, you’re better off looking for smaller exchange platforms that cater to a more niche market.
It’s no secret that online fraud, hacking, and malware attacks are an increasing threat to crypto investors. That’s why you need to look for an exchange platform that offers top-notch cyber security. While the blockchain is virtually impenetrable, exchange platforms have their vulnerabilities.
Keeping your cryptocurrency on an exchange platform is like storing it in a bank account — it means you’re trusting someone else with that money. That’s why you must do your research on the level of security a platform offers. Most of the time, you’ll find this information openly disclosed on their website (if they’re legitimate).
The longer an exchange platform exists, the more robust its security is. So, you’re better off settling with an option with a good, long-standing history.
Consider Their Reputation
Like any other business, your reputation is make or break for your success. You must consider the reputation of an exchange platform because, essentially, they’re operating as a business (much like a bank).
You can do your own background search on reviews of a certain platform to get a feel for how happy or unhappy their customers are. All you have to search for is ” X crypto exchange reviews,” and you should find a decent amount of information.
Don’t Forget About Trading Fees
Finally, don’t overlook the cost of trading fees on an exchange platform. They are somewhat of a ”hidden” cost when purchasing Bitcoin, so you need to have a good idea of what they are, as they can add up fast.
This is how exchange platforms make their money — thanks to transaction fees. Just make sure they’re not robbing you each time you conduct a transaction, and you know what to expect from each exchange.
Pick a Bitcoin Exchange With Knowledge on Your Side
It’s understandable if you’re cautious about crypto investing as a first-time investor. The market is volatile, but if you invest and exchange your Bitcoin at the right time, there’s plenty of good money to be made.
To learn more about how to pick a Bitcoin exchange, when to invest, when to withdraw, and more, explore our page dedicated to cryptocurrency on this site!