Know How to Evaluate Crypto Exchanges and Pick Best Crypto Exchange for You |
Posted: October 16, 2020 |
Know How to Evaluate Crypto Exchanges and Pick Best Crypto Exchange for You
Cryptocurrencies remain outside the pale of government regulations. What attracts people to crypto is the high level of security and peer to peer level transaction possible. These days it is easy to get your Bitcoins or Litecoins from crypto exchanges but are the best crypto exchanges for you? Learn how to evaluate them and pick the right one. Crypto exchanges differ in the norms, procedures, security parameters, ease of use and customer services. The crypto market is worth over $ 16 billion and trade takes place on over 200 platforms.
Trust factor Trust factor is important since it is your hard-earned money that you will lose if you pick the wrong platform. Just how much you can trust an exchange handling crypto currency can be inferred from their procedures such as Know Your Customer process, their certifications and registrations and their stated anti-money laundering practices. Does the exchange you are considering have a past history of any nefarious activities? If so, steer clear.
Look at security on the site. The normal standard is to have two factor authentication. The 2FA should preferably be Google authenticator, Yubikey or Authy.
The third trust engendering factor is whether the exchange has an insurance fund to compensate you in case of loss in certain situations.
Your intention Pick the best crypto exchange according to your intention.
If your plan is to buy and hold cryptocurrency on long term basis then you must look at spot exchanges. You can purchase actual crypto, sell it or hold it for as long as you please.
If trading is your intent then look for exchanges that offer facilities in futures and options and ease of settlement to cash or digital asset. Keep in mind that trading on one exchange restricts your transactions to that exchange and you cannot transfer to another exchange. If you do, then look at Fiat exchanges that allow transfer of national currencies to crypto world and vice-versa. Look at the banking arrangements such exchanges offer. Coinbase is the best crypto exchange offering Fiat currencies, security and trustworthy cryptos.
Further, if you plan to trade then consider the leverage. Some exchanges might permit trades 10 times the value of funds in your account, others may allow 100x while others may offer 2x or 3x. Cojoined are terms and brokerage they change on such leveraged trades as well as payouts.
Volume of transactions If you plan to buy a lot of crypto, it must first be available on that exchange and that happens when there is volume trading in an exchange. An exchange that is relatively less known may not be able to satisfy this criteria so, if you want to buy bulk or sell bulk your transaction may not go through. Consider volume of transactions on an exchange based on your intent. If you plan to buy and hold then even low volume of best crypto exchange will be the best crypto exchange for you since they may offer attractive brokerage rates. Along with volume also consider the variety of assets available. You should have access to Ethereum, Litecoin and Bitcoin at the very least. Simplex is good but it does not deal in some crypto currencies. However, it offers fast payment processing andlets you pay with credit or debit card besides being secure and easy to use. Binance could be the best crypto exchange since it deals in 100 different cryptocurrencies and has 2 factor authentication.
Spend time researching the best crypto exchanges. It will be worth the effort when you actually trade in cryptocurrencies.
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