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Ever since the crypto trend exploded in 2017, people around the world got interested in digital currencies. A massive number of new investors, traders, miners, and others joined the crypto space, and while 2018 has been a difficult year for crypto, the coins’ popularity still continues to spread.
In fact, new investors are entering the market all the time, and since many of them are completely new, they often have difficulties when it comes to finding their way around. While there are many aspects to cover when it comes to navigating the crypto space, one of the most important ones for traders and investors is finding the right crypto exchange.
A lot depends on finding a proper exchange, and there are many aspects of each service that you must consider before settling down. Even so, you don’t have to only use one exchange. But, it is still important to know what to look for and what to pay attention to in order to get the best deal. With that in mind, here are the top ten tips on choosing the right crypto exchange.
1. Make sure it features the coins you’re interested in
It should go without saying that the first thing you should look for in exchange is what coins it offers. After all, if the exchange does not offer the coins you are interested in, it is better just to move on and find one that does, instead of trading whatever coins there are already listed. However, do remember to check even those exchanges that do not already offer your coin of choice, as they are often updating their lists of coins, adding new ones and removing those with bad quality.
2. Does the exchange support your region?
While most of the work exchanges do is being performed online, that does not mean that you can access any exchange from any region in the world. Most exchanges only cover a certain area, and depending on whether or not you live in it would impact your ability to trade on the exchange.
3. How can you fund your trading activities?
After finding an exchange that offers your coin of choice and confirming that you can actually access it, you need to check if there is a way for you to fund your trading activities. Not all exchanges accept every payment option, and some of them offer a very limited choice of funding your trading account. This is a crucial thing, and even if the exchange fulfills all of your other expectations but not this one, you won’t be able to trade on it.
Centralized crypto exchanges have one major flaw, and that is the need to deposit funds in them — whether in the form of cryptocurrencies or traditional money. As such, they are often targeted by hackers who see them as massive vaults. This is why it is of great importance for the vaults to have functioning locks. In other words, the exchanges’ security is one aspect that should not be ignored, as doing so may result in you yourself losing all of your funds.
5. Ease of use
Of course, if you wish to use an exchange, you need to be able to find your way around it. This is very important for new traders, as different exchanges have different levels of user-friendliness. Some exchanges are specially designed to be simple and intuitive so that even new users can figure out what to do on their first day. However, some exchanges expect that you already know how to navigate a more complex interface, which can be confusing and repelling to those who lack experience.
Fees are another thing to look into before choosing an exchange, as there can be many different types of fees. For example, some exchanges only feature trading fees, and maybe deposit and withdrawal fees. Others can charge additional fees for inactivity, or entering positions and holding them open for a prolonged period. Not to mention conversion fees, which are also present on many exchanges.
Next, you should probably look into the reliability of the exchange. This includes the exchanges’ trading volumes, their historical performance, and alike. This is important because exchanges with smaller trading volume may take a much longer time to process your trades than those used to working with large volumes.
Of course, reputation is also an important aspect, as users will share their displeasure if the exchange has done something to damage their trading. And, if the exchange is known for hacks, fraudulent behavior, or if it lacks user insurance or even proper licenses — these are all red flags that suggest that you should likely stay clear.
9. Coin pairs
We have already talked about the importance of the exchange offering the coins you wish to trade, but it is also important to check what trading pairs the exchange offers. For example, pretty much every exchange has Bitcoin trading pairs, and all other coins featured on these exchanges can be exchanged for BTC. However, can you exchange your coins for ETH directly, or do you have to go through Bitcoin first? Are there pairs of different coins and fiat currencies? This is very important, as converting your funds through several pairs to reach the one you want may result in massive fees.
10. Does it have its own native coin?
Some exchanges have their own native coins, like Binance Coin (BNB), which is a native coin at Binance exchange. Using the exchange’s native coin may result in additional trading pairs, a discount on trading fees, and other similar benefits. Of course, the lack of a native coin is not really a deal breaker for most people, but if you can enjoy additional benefits because of it, it might be a good idea to look into it.