How to pick the best crypto exchange ?
In the last few years, and especially since 2017 with the boom of cryptocurrencies, many crypto exchanges have been created (and are still being created). Today, there are so many platforms, that a part of crypto traders are lost and don’t know where to exchange their coins/tokens/money.
And even if they seem to be the same, there are a lot of differences between platforms!
If all traders would have the same profile, finding the best cryptocurrency exchange would have been very easy. But in reality, they have not the same trading profile nor same expectations.
According to me, here are the characteristics that traders should pay attention to when they’re looking for the best crypto exchange. Of course, the order of importance may differ from a trader to another.
The best crypto exchange will fill all the following requirements:
Are you allowed to trade crypto assets?
Unfortunately, if your local laws don’t allow you to buy/sell or even own cryptocurrencies, you can stop your researches here cause you may have problems with the law if you go further.
Are you allowed to trade on the platform?
Can you trust this crypto exchange and is it safe to use it?
I advice you to check the reputation of the exchange you want to deal with to avoid being scammed. Furthermore, it needs to use best practices and provide last technologies to secure the assets of their customers like:
- Cold / hot wallets
- Encrypted systems
- Multi-signatures wallets
- Enhanced passwords
- Two-factor authentication
- White IP list …
To learn how to secure your crypto assets, you can read my articles from the security section (more will come soon).
Is the asset you want to trade on the crypto exchange?
According to Coinmarketcap.com, it exists more than 2300 coins/tokens at this time (08/12/2019), but trust me there are many more. Every day, new crypto-assets are created. You understand why a cryptocurrency exchange can’t list them all.
For example, one of the biggest exchange, by number of pairs, is Livecoin and it lists “only” 315 assets. We are far from 2300!
So even it is obvious, I prefer writing it : before registering, check if your assets is available on the chosen platform.
Is there any support?
Most of the time, there is a support which will help you with any problem, but better be sure!
Is your deposit/withdrawal methods accepted?
If you want to trade with fiat money, check if your method is available on the exchange cause it exists a lot: credit/debit card, bank wire, prepaid cards, Skrill, Paypal …
Is the platform translated into your language ?
If you speak english, you’re safe cause all exchanges are translated into english. But if you speak only Italian or French for example and if these languages are not proposed, it can be very hard for you to use the platform.
Can I remain anonymous on crypto exchanges?
Anonymity can be very important to users for many reasons like fiscality or security. More and more exchanges are now asking their customers to fill their KYC to comply with AML so it becomes harder every day to use an exchange anonymously.
On the other hand, if you just want to trade cryptocurrency/crytpocurrency you will find easily an exchange that won’t ask about your identity.
Is the platform cheaper than the others proposing same characteristics? How much will I have to pay when I use a crypto exchange?
Exchanges are not free to use. They take fees mainly on three types of transactions:
- On deposit: it happens, but most exchanges don’t tax deposits.
- On trades: on the contrary, buy/sell transactions are 99 % of time taxed by a percentage. Finding an exchange with a low fee rate will save you a lot of money, especially if you want to trade a lot.
- On withdrawals: sometimes exchanges will subtract a fee, greater than network fees, from your balance before sending you your assets.
Liquidity and volume:
Is the exchange enough liquid to execute my trades in good conditions?
When you deal with little platforms that have only low volume of daily transactions, you may have difficulties to find a counterpart for your trade and you may wait a long time before seeing your buy or sell order filled.
To help you to find answers to these questions and more, I propose you to read this article: “Comparison of the best crypto exchanges“. You will find the best crypto exchange you need in few seconds!
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