Most people consider investing or trading in Bitcoin and other cryptocurrencies as intimidating. This is because the cryptocurrency market has been presented to most people as a very technical financial market.
However, that is not the case. You can start trading or invest in cryptos in no time, as long as you follow the right process. Following the right process starts by choosing the cryptocurrency exchange to use. Crypto exchanges are your gateway to the cryptocurrency market. Hence, the reason why they are important.
This guide helps you learn how to choose a crypto exchange and some of the best ones in the market.
Table of Contents
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What Are Crypto Exchanges?
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What Are The Criteria For Choosing Crypto Exchanges?
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The Top Four Cryptocurrency Exchanges For Experts And Beginners
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How To Use A Cryptocurrency Exchange
What Are Crypto Exchanges?
Crypto Exchanges are platforms where people can buy and sell cryptos like Bitcoin. You can use the exchanges to trade one cryptocurrency for another — converting Bitcoin to Ether – or to purchase the cryptocurrency using regular fiat currencies like the USD or GBP. These platforms reflect the current market prices of the cryptocurrencies they offer. The users can also convert the cryptos back to fiat currencies on an exchange, giving them the option to withdraw the funds back to their regular bank account or leave it on the exchange platform to trade back into cryptocurrencies later.
There are hundreds of cryptocurrency exchanges available to traders and investors. Hence, making it a tough decision to choose the best ones. However, the criteria outlined below will help you determine how to choose the right cryptocurrency exchange for you.
What Are The Criteria For Choosing Crypto Exchanges?
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Authenticity and security.
Conduct your research to determine whether the exchange you are choosing is a legitimate and secure platform. The authenticity and security of a platform will help you determine if your funds would be safe with the crypto exchange. Traders have lost billions of dollars to scam platforms. Hence, ensure you check the reputation of the platform and the various security protocols they have in place to secure your data and funds.
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Method of purchase.
The method of purchasing cryptos varies between platforms. Some platforms support deposits by bank transfer, some use PayPal, others accept credit and debit cards, and some only use cryptocurrency for purchases. Study the various payment options available on the platforms and choose the one most suited to you. For starters, with no coins, it is essential that you choose a platform that accepts fiat currency as it allows you to enter the market with little stress.
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Supported coins and tokens.
Virtually all crypto exchanges support Bitcoin and Ethereum. However, there are thousands of cryptocurrencies, and some investors want to gain exposure to others aside from BTC and ETH. Thus, you have to know the coins and tokens supported by a crypto exchange before you choose one. Binance is the most popular because it grants traders and investors exposure to more cryptocurrencies than other platforms.
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Fee structure.
The transaction fee structure differs across various crypto exchanges. Understanding the fee structure of a crypto exchange is crucial as it allows you to know what you are dealing with when conducting several activities. Ensure that you choose a platform that doesn’t have hidden transaction fees. You can choose a platform that offers flat transaction rates or those with a more flexible structure.
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User interface and user experience.
This criterion is very important to your success as a cryptocurrency trader or investor. An exchange with an intuitive interface and good user experience makes it easier to trade the cryptocurrencies available. However, user experience is subjective, and people enjoy various interfaces. Furthermore, ensure to check the customer service and other customer-related functionalities offered by a crypto exchange. The easier to access the platform, the better.
The Top Four Cryptocurrency Exchanges For Experts And Beginners
There are hundreds of cryptocurrency exchanges available to traders and investors. However, these four are some of the leading and most powerful crypto trading platforms in the world.
Binance
Binance is considered the most powerful cryptocurrency exchange in the world. With a trading volume above $13 billion per day, Binance is the largest. It also offers traders access to hundreds of coins and tokens as it has one of the largest collections of altcoins in the market. In addition to regular spot trading, Binance offers other services such as staking, derivative trading services and more. Binance is available in over a hundred countries globally, providing crypto trading services to millions of people. Finally, Binance is a good option for anyone who wants more advanced charting than most other exchanges.
Coinbase
Coinbase is amongst the most widely used digital currency trading exchanges, especially for traders in the United States. It is now a publicly listed company and provides services to crypto traders in the US, Europe and other parts of the world. Coinbase processes over $2 billion in trading volume per day. It offers crypto trading services to both retail and institutional traders, with the Coinbase Pro platform specially dedicated to the professional traders and investors. As a publicly-listed exchange, Coinbase offers insured custodial wallets for investors and traders to store their coins. Coinbase is highly secure but doesn’t offer as many cryptocurrencies as Binance.
Kraken
Kraken is one of the oldest trading platforms currently in existence in the crypto space. Due to the number of years, it has been around, Kraken is admired by many and provides trading services to thousands of traders globally. Similar to Coinbase, Kraken is looking to become a publicly-listed company. Kraken allows traders to access hundreds of cryptocurrencies, fund their accounts using fiat currencies and cryptocurrencies, and gain access to other cryptocurrency trading services.
CEX.io
CEX.io is another leading cryptocurrency exchange. Its excellent user interface makes it a good platform, especially for people new to the cryptocurrency world. It allows users to access a wide range of cryptos, including the leading ones such as Bitcoin, Ether, and Litecoin. The customer support on CEX.io is also one of the best in the crypto space
How To Use A Cryptocurrency Exchange
Using a cryptocurrency exchange is simple and involves a few steps. They are;
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Register with the cryptocurrency of your choice.
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Provide your name and other correct details and proceed to verify your account in accordance with the AML and KYC standards
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Access your cryptocurrency exchange account and fund it using any of your preferred payment methods
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Identify the coin or token you wish to buy and swap the deposited funds with the desired cryptocurrency. You can also buy BTC, ETH or USDT with the deposited fiat currency before swapping these cryptocurrencies with your desired coin or token.
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If you intend to hold the coins for long, it is best to move them to a cold storage wallet. However, you can leave them on the exchange wallet if you intend to trade the coin.
Final Thoughts
Cryptocurrency exchanges are central to your success as a trader or investor. Hence, knowing how to choose a crypto exchange is crucial. The above-reviewed platforms are some of the best exchanges available to traders globally.
This article was originally posted on FX Empire
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