Everyone from enthusiastic investors to enterprising millennials, from financial institutions to multinational companies are jubilant to understand more about the Blockchain-based cryptocurrency, sometimes called as Bitcoins (but it is a type of cryptocurrency only!). More importantly, people trying to explore the knowledge related to currencies, exchanges, services, and products, to earn the speculative profits associated with Bitcoins. What is a cryptocurrency exchange? However, above all you need to know about choosing the best cryptocurrency exchange platform so that your funds will be secured, you can trade easily with nominal fees and many more. In this article, let us know about the factors that you must consider while choosing the best cryptocurrency platform.
How To Choose Cryptocurrency Exchange Platform?
Unlike the traditional stock markets, where the profile of the company is associated with the share value in the market; in crypto space, cryptocurrency exchanges hold the important place to keep your funds secure, tradable, and earn the profits. Following are the few factors which must be considered before choosing the best cryptocurrency exchange platform:
Security (Check the Locks!)
Supported Cryptocurrencies and Tokens (Check the CoinS!)
Liquidity ( Check the Flow!)
Most of us forget to check the liquidity or trading volume while scrolling for the cryptocurrency exchange platform. Liquidity is one of the major factor which makes the transaction speed faster without considering the price volatility of currency. It could be different for different reading pairs depending upon their supply and demand (cryptocurrency exchange rates), in the crypto markets. You can easily check the trading volume or liquidity by clicking on the website of CoinMarketCap and filtering the exchanges on the basis of liquidity.
Trading Platform (Check the Purpose!)
There are mainly three types of crypto exchanges in the crypto marketplace which are utilized as the trading platforms.
P2P Exchanges: Many of the crypto traders, wish to maintain the privacy as much as possible, so they generally choose the peer-to-peer exchanges to trade directly with either buyers or sellers of crypto assets. P2P platform acts like a bridge between the traders so that traders can negotiate the prices, decide the mode of payment, and many other conditions. These platforms help in reducing congestion of network, maintaining security and trustless system for exchange.
Crypto Brokers: Crypto brokerage is one of the crypto exchange platform where the brokers or any middleman tries to negotiate the prices between sellers and buyers through their platform. If you are a newbie or do not want to engage in technical analysis, you can choose the crypto brokers as trading platforms.
Thus, you should consider that if the trading platform is a full-fledged exchange, P2P platform, or brokerage firm, before selecting the Best bitcoin exchange.
Fee Structure (Check the Hidden Ones!)
Method of Purchase (Check the Mode!)
User Interface (Check the Ease!)
Reputation (Check the Status!)
The cryptocurrency marketplace is still in a nascent stage which is non-regulated and decentralized, making it vulnerable to scams, hacks, and cyber attacks. So, before you end up in creating your crypto account on any of the exchanges, you must conduct thorough research either by reading the reviews or searching about the hacks associated with the exchanges. This exercise could make you aware about the security breaches took palace on the exchanges. Many of the giants even assures the compensation in case of any hack on the exchanges.
Considering the above factors, it can be concluded that while selecting a cryptocurrency exchange platform, the balance among all the factors need to be maintained to assure the best returns on the investments. Every exchange is different in terms of their payment infrastructure, security protocols, rules and regulations, fee structure, user experience, and many more. Therefore you need to self educate yourself about the major factors which need to be taken into account for a better experience in the crypto space.