Cryptocurrencies are taking the world by storm and many people are turning to them for investment. But the cryptocurrency market is very volatile and risky not only for beginners but also to experienced investors/traders. And one of the ways of ensuring that you get a good cryptocurrency trading experience is by choosing a good cryptocurrency exchange.
There are very many cryptocurrency exchanges online and all have different features and offer different crypto products. You will therefore need to choose wisely to ensure you choose an exchange that meets your trading needs.
In this guide, we shall look at the various factors that you should consider when choosing a cryptocurrency exchange to help you choose the best cryptocurrency exchange.
One of the most important things to consider when choosing a crypto exchange is how easy it is for you to interact with its user interface.
By an exchange’s user interface we mean the exchange’s website, wallet, and trading platform where you can monitor the market price movements of various cryptocurrencies or crypto products like cryptocurrency futures, carry out market analysis and enter and close trades (positions).
You should find an exchange where you do not struggle navigating about the various features of the cryptocurrency exchange website, wallet or trading platform.
A user-friendly crypto exchange:
You have possibly heard of the rampant hacking of cryptocurrency exchanges and hackers getting away with millions of users’ crypto funds. And you sure would not want to end up investing in an exchange that is always a victim of such hacks. And although it is impossible to tell which exchange will be hacked next, you do not want to invest with a crypto exchange that does not guarantee the security of your crypto assets.
A secure website offers:
It is very important to verify the authenticity of the company behind the crypto exchange and the people that run that company. We have heard of cases where scam crypto exchanges start and after investors have deposited a considerable amount of funds, the company shuts down, closes their website and runs away with investors funds.
Some indicators of a transparent and authentic crypto exchange include:
Customer support is a very important feature since it allows you to quickly and easily get in contact with the crypto exchange support team in case of any issues while using the exchange.
Different exchanges offer different ways of contacting their customer support team including via email, chat, and telephone call. It is important to go for an exchange that offers chat and telephone support since these provide a faster and easier way of reaching out to the support team for prompt feedback on queries compared to when using email.
You should be vigilant to review the fees that the crypto exchange charges and more so to determine if there are any hidden charges. Hidden charges refer to charges that are not stated as fees on the exchange’s fee structure but included in other places like spreads or higher listing prices.
Some exchanges indicate that they do not charge any fees only for them to list their coins at a higher rate than other exchanges, have high spreads, or even include hidden conversion rates.
Besides the exchange’s fee structure, you should therefore also look at other things like spreads and listing prices (the price at which various cryptocurrencies are listed at) and compare these to those of other exchanges.
Also, to determine if the fees charged by the exchange are competitive, you should compare as many exchanges as possible.
Besides having a wide selection of cryptocurrencies to trade, you should also check to make sure that the crypto exchange lists the cryptocurrencies you are dying to trade. It would be very unfortunate to open a trading account with a crypto exchange only to find out that one of your favourite cryptocurrencies is missing.
Besides, the exchange should also offer any other cryptocurrency products you may want to trade in. If you want to trade bitcoin futures, for example, you should choose an exchange that provides bitcoin futures.
Liquidity in cryptocurrency trading is very important. The higher the liquidity, the faster the rate at which transactions are processed.
You may ask, how then does one establish if an exchange has high liquidity or not? Just look at the exchange’s trading volume. The higher the trading volume the higher the liquidity.
Different exchanges allow different methods for purchasing cryptocurrencies including bank transfer, PayPal, credit and debit cards, other cryptocurrencies, and POLi among others.
You should choose an exchange that offers a method that you are most comfortable with.
If you do not have a cryptocurrency in your custody or if you are looking for a peer-to-peer crypto exchange, it is advisable to choose an exchange that allows you to purchase crypto assets using your local currency for the case of peer-to-peer exchanges or make deposits in your local currency for the case of the other exchanges.