Here are five factors that can help one determine which exchange is right for them:
Today, trading and investing in digital assets is pretty straightforward, thanks to the many crypto exchanges at your disposal. Just choose the right exchange, create an account and buy/sell/trade cryptocurrencies with ease. However, with so many different options to choose from, putting your money behind a particular exchange is easier said than done.
But fret not; here are five factors that can help determine which exchange is right for you:
The first thing you should look at is the security of the exchange. Opt for a platform that is always looking to sure up its systems. The best exchanges will host regular bug bounty programs, where they reward white-hat hackers for pointing out vulnerabilities in the network. Good crypto exchanges will also offer two-factor authentication and other robust security measures to keep your holdings safe. And just as an added safety measure, they will also insure customer holdings against hacks and attacks.
2. Investment and trading options: A good cryptocurrency exchange will offer you a variety of investment and trading avenues. For instance, some platforms in India provide more than 300 cryptocurrencies for investors and traders to choose from. In addition to these coins and tokens, a few exchanges also offer alternative crypto products, such as futures, ETFs, etc.
3. Liquidity: Liquidity determines how easy it will be for you to turn your crypto into fiat and vice versa. Therefore, you must look for a crypto exchange with good liquidity. The easiest way to get an idea of an exchange’s liquidity is to look at its 24-hour trading volume; the higher it is, the better. There are several platforms that provide real-time data, including trading volumes, of the various crypto exchanges in India and the world.
4. Fees: All crypto exchanges will have a set of fees. However, the number of charges and the extent to which they eat into your earnings will vary from one exchange to the next. Broadly speaking, the best platforms will have a transaction fee of 0.2 percent or less. You should also compare trading, deposit, withdrawal, and balance transfer charges before choosing a crypto exchange.
5. Features: Look for things such as quick onboarding, 24*7 customer support, a mobile phone application, a wide choice of payment methods, etc. These small features can make a big difference in your trading/investing experience. When it comes to mobile applications, you should also look into customer reviews and ratings. This will give you a fair idea of the quality of service on offer.
6. Rewards: Free crypto/money never hurts. Therefore, as an additional value add, you should look for cryptocurrency exchanges that reward good customers. Some exchanges will offer a referral bonus where you can earn up to 50 percent of the trading fee paid by the friends and family you refer. Some exchanges also provide crypto rewards for learning about projects and taking quizzes.
A good cryptocurrency exchange will have a large customer base. This is an indicator of other investors placing their trust in the said platform. Also, remember not to opt for an exchange just because it has the lowest fees; it should also tick all the other boxes. Finally, crypto markets are highly volatile —remember to back all trades and investments with thorough market research and understanding.