Factors to Consider When Choosing a Cryptocurrency Exchange

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Cryptocurrency Exchange

Cryptocurrency exchange platforms are places where people “meet” to buy or sell crypto. There are hundreds of such platforms available to choose from. 

This is due to the rise of cryptocurrency, which has led to over 10% of the internet users globally owning at least one form of crypto and some getting wager updates on what the point spread is on the game to win with crypto.

You may be a newbie who wants to start trading or transacting with crypto. Where do you start? This article will help you to choose a crypto exchange platform.

Type of Platform

There are three cryptocurrency exchange platforms; trading platforms, crypto brokers, and peer-to-peer platforms.

A trading platform is where business people meet. One buys crypto and keeps it hoping to sell it at a later time when the value appreciates. 

The scarcity of cryptocurrency almost guarantees its increase in value over time. Coinbase, Binance, Gemini, Crypto.com, and BitMart are examples of crypto trading platforms.

A cryptocurrency broker platform sources crypto from different places for you to buy from them. In this case, you purchase cryptocurrency directly from the platform. TradeStation Crypto, Webull Crypto, and BitPanda are examples of crypto brokers.

Peer-to-peer (P2P) platforms connect a buyer and seller directly. They do business directly without a third party. Examples include Local.bitcoin.com, Paxful, and LocalCoinSwap.

Therefore, you need to know your goal before choosing from these types of crypto exchange platforms.

Security

The first thing to check is the URL of the platform. Make sure it starts with https:// and not http://. https://.

You may also consider a platform with several layers of authorization like face recognition and 2-factor authentication.

Your Location

With the rise of cryptocurrency globally, there is a direct proportionality in the number of crypto exchange platforms. Developers create and manage these platforms in their regions. However, most platforms operate globally.

Your location is vital in choosing a crypto exchange platform. It is more convenient to choose a platform that supports your local currency in terms of exchange. 

For example, if you are in the US, it will be convenient for you to use a platform operating there, not one in the UK.

Transaction Fees

All platforms charge fees on all transactions done. For example, if you are buying bitcoin from someone on Coinbase, you and the seller are charged a small fraction of the amount as a transaction fee.

Transaction fees for cryptocurrency transactions are generally lower than those involving fiat currencies. However, some platforms charge a higher fee than others. It is your role to research and choose a platform with a transaction fee that is okay with you.

Means of Purchasing

Some platforms allow direct bank transfers when you want to purchase cryptocurrency on them. Other platforms support debit and credit cards. Others allow transfers from online financial platforms like Paypal and Payoneer.

Most crypto exchange platforms support more than one method of payment. You must ensure that the platform you choose meets your demands. More importantly, you should choose a platform that supports a payment method that you already have.

Supported Coins

Bitcoin, Ethereum, Tether, Binance Coin, Cardano, and USD Coin are the commonly used cryptocurrencies. Most platforms have these in their options.

However, thousands of other altcoins are in existence and circulation. Some regions only use a particular coin in their transactions. 

Therefore, when looking for a crypto exchange program, you will need to know the number of coins they offer. The more the number of coins, the better a platform is.

Type of Your Wallet

Your wallet will determine the platform you choose. Hardware and non-custodian wallets do not allow you to buy cryptocurrency directly using traditional fiat currencies. 

You have to transfer crypto from a custodian wallet. Therefore, if you want to buy crypto from an exchange platform, you should first have a hosted wallet.

The Simplicity of the Platform

You don’t want a platform that will bring a lot of difficulties in accessing it. The platform you choose should allow you access using any gadget, a phone, or a computer.

Platforms with mobile applications are the best as you can quickly sign into and out of your account.