The rise of cryptocurrencies has taken the world by storm. For one, it can allow an investor to have huge profits for a short amount of time. However, the opposite is also true—your investment may also immediately plummet. Still, despite their risky and volatile nature, people are still investing in cryptocurrencies.
Most people believe that potential investors only shun away from investing in cryptocurrency due to its volatile nature. But, the risks inherent within cryptocurrencies may be lessened if you know the basics. After knowing the nature of cryptocurrencies, like how they operate, how they’re traded, and how you can gain money, the next step would be selecting the right crypto exchange platform.
What Is Crypto Exchange?
As mentioned, crypto exchanges are platforms that crypto investors use, whether seasoned or beginners, to sell, trade, and buy cryptocurrency, like Bitcoin, Ethereum, Ripple, etc. In addition to selling, trading, and buying the same form of cryptocurrency, you can also exchange one cryptocurrency to another, like Bitcoin to Ripple, by using a crypto exchange platform.
When buying any type of cryptocurrency from these platforms, take note that you can also use fiat currencies, like GBP or USD. With a reliable platform, you can also conveniently convert the cryptocurrency back to your chosen currency. Thus, the right platform shouldn’t give you hassle when it comes to withdrawing your funds. If you’re still undecided on what cryptocurrency to buy or you’re still waiting for the right price, then you can also decide to store it in the platform itself.
Choosing The Right Crypto Exchange For You
The rise of cryptocurrencies also means the rise of crypto exchanges. With this variety, it may be difficult to choose one that suits your needs. To help you out, here are some tips you need to keep in mind when you choose the right crypto exchange for you:
- Research The Security And Authenticity
Unfortunately, crypto exchanges don’t really share the same commitment towards securing your cryptocurrencies or fiat dollars. This means that you may stumble upon plenty of incompetent platforms. Choosing these types of platforms may only expose you to scammers and frauds.
Since you’re investing your hard-earned money, regardless of the amount, you want to ensure that they’ll remain safe and secure in the platform. Also, read reviews in third-party forums and blogs about your chosen crypto exchange so you can gauge its authenticity.
- Know The Types Of Crypto Exchange
Essentially, there are three types of crypto exchange platforms you can choose from: brokers, trading platforms, and P2P (peer to peer) exchanges. To help you make the right decision, here’s a brief definition of each of the said platforms:
- Brokers: A cryptocurrency exchange broker basically works the same as a Forex broker. This means that the former will set the price for a type of digital coin, as well as provide a platform where potential buyers can purchase their desired cryptocurrency.
- Trading Platform: This is, perhaps, the most sought-after type of cryptocurrency exchange. In this setup, instead of interacting directly with the buyer or seller, you’ll interact with the platform itself. This means that, say, if you’re the buyer, then you’ll buy crypto from the platform, not the seller. The same is also true if you’re the seller–you’ll sell your coins on the platform, and not directly to a buyer. This type of crypto exchange is advisable since you’ll have the assurance that you won’t get scammed by the buyer or seller. However, the platform may charge a transaction fee.
- P2P: As the name suggests, with this type of crypto exchange, you’ll directly interact with the buyer or seller. This may be a little risky, especially if you’re dealing with a complete stranger, but you won’t have to pay any transaction fee. This means that you’ll buy or sell the market value of the coin you’re planning to exchange.
- Purchasing Method
Research beforehand if a crypto exchange requires you to use bank transfer, PayPal, or credit or debit card. Some platforms may only even allow purchasing using a cryptocurrency. If you’re just starting out, you want a platform that offers you convenience when it comes to buying cryptocurrencies. Hence, find one that accepts bank transfers, or credit or debit cards. This way, you can easily exchange your fiat currency for a cryptocurrency of your choice.
In addition to knowing the method of purchase, it’s also important that you know the duration of the transaction. Some platforms will complete your transaction for a couple of days. But, there are some that’ll immediately complete the transaction the moment you deposit your fiat currency. As a beginner, it’s preferable to choose the latter.
- User Interface
Regardless if you’re already a veteran crypto investor or just starting, you want a platform that has a good user interface. By good user interface, this means the platform should have navigable pages and an appealing design.
Fortunately, this shouldn’t be a problem since platforms, especially reputable ones, are always constantly updating their user interface so they can accommodate both existing and new users. This is especially true since users would most likely recommend a platform that has a great user interface, increasing the platform’s users, which means more profit for them.
- Make Sure It’s App-Friendly
In addition to having a good user interface, it’s best if the platform you’ve chosen also has an app version. By having one, you can sell your coins on the go, which is important, given the volatile nature of cryptocurrency. Surely, you don’t want to reach out to a laptop or desktop computer just so you can sell your Bitcoins when their price suddenly drops.
- Check If The Platform Operates In Your Country
Even if you’ve found a platform that has a nice user interface or has received a good review, it would be futile if this platform can’t operate within your geographical location. Thus, before investing your hard-earned money, it’s important that you double-check if the platform abides by your local laws and regulations.
This is important since even though cryptocurrency is rising in popularity, there are still plenty of countries that aren’t accepting digital coins.
As mentioned earlier, there are plenty of crypto exchange platforms available. Hopefully, with this guide, you may be able to narrow down your options. But, at the end of the day, the features and convenience that a crypto exchange may bring will ultimately boil down to your decision. Hence, choose a platform that you’re most comfortable with. And, don’t forget to check if that platform can operate in your country.