6 Factors to Consider When Choosing the Best Cryptocurrency Exchange
The fact that cryptocurrencies abound in the digital currency circle has made the best cryptocurrency exchange platforms a booming industry worth billions of dollars, with many news exchanges coming into the arena.
In fact, the growth of Blockchain is so phenomenal that investors around the world are clamoring for digital assets – to an extent that some crypto exchanges stopped taking in new users in 2017 because of the huge influx that exceeded their resources.
Did you know?
Late last year when Bitcoin had a hysteria – an uncontrolled situation where prices plunged and volumes crashed, Coinbase – a reputable exchange platform stopped trading for a while because of huge losses.
Meanwhile, digital currencies and cryptocurrency exchanges continued to grow in momentum – triggering the establishment of new crypto exchange platforms.
Many of these new exchanges are genuine but have not been tested, or in other words, they are yet to be tested in the overwhelming marketplace.
Furthermore, many other crypto exchanges are set up by fraudulent people with corrupt motives and intentions.
As a result, how can you find the best cryptocurrency exchange for your investment?
There are some factors to consider as you will learn in this article. These factors will help you choose the best channels for your cryptocurrency exchange.
Please make sure to read the entire article.
1. How Authentic and Secure is the Crypto Exchange?
The first step for me when choosing the best cryptocurrency exchange is to confirm the authenticity and security of the platform.
You want to make sure that the platform is legal and well secured because non-secure platforms are a serious issue that has pledged many crypto industries today – costing them billions of dollars in losses.
The result, Coincheck lost over $500m to hackers. The largest sum ever was stolen from an exchange.
Coincheck was an unregulated exchange, which shows you the need for investors to confirm the legality and security protocol of the exchange platform in question before investing.
You agree that fraud abounds in the cryptocurrency world, and exchanges are responsible to take necessary measures to prevent fraud and protect stakeholders investments.
Here is what HashChain Technology – a cryptocurrency mining company’s founder and CEO said:
He encouraged you – cryptocurrency traders to find an exchange platform that uses two-step authentication login process.
Therefore, is your chosen exchange platform using a two-step security system? Is it a place where stakeholders feel safe with their investments?
2. Does the Cryptocurrency Exchange Support Cryptocurrency Tokens?
But that is not all that is required for investors to start investing in an exchange platform, because each platform has its own policy that governs them.
This simply means that there are major differences in supported tokens in the cryptocurrency marketplace.
Take, for example, Coinbase and Binance. Coinbase trades just 4 of the major digital currencies, on the other hand, Binance is trading an incredible list of cryptocurrencies.
You can see the variation right there.
So look at a situation in which different elements are equal or are in the correct proportions, such as in the case of Stablecoins.
Stablecoin is used sparingly by crypto traders to hedge against the volatility that is available in the digital currency marketplace.
And as a US dollar-backed cryptocurrency, acting as a stable currency for digital exchange that is providing something as collateral across many banks, TrueUSD has successfully established itself in the marketplace.
TrueUSD uses accounts that are related to guardianship or being protective to give token-holders legal protection and direct banking.
In this way, the company would not directly touch their funds.
Pro Tip: Make sure to choose a crypto exchange that supports all cryptocurrency tokens in your investment radar.
3. How Reliable is Cryptocurrency Exchange?
At some point, trading volumes go up exceedingly high, and at other times currency price takes a dive and shrink dramatically.
So how will your exchange platform perform during such times of high volatility?
In a situation like this, will your chosen exchange work without hindrance, or will it fall victim to the ever-changing environment and cost stakeholders their investment?
The co-founder of Storj Labs – a cloud storage service company that uses blockchain said:
John Quinn encourages users to store their cryptocurrency assets in a separate wallet other than the website used for trading.
Consequently, it is important to check and confirm the reliability of the cryptocurrency exchanges before choosing a platform.
Find out their performance rate, analyze their trading signals to discover their success rate, etc.
For instance, Blockchain Whispers is currently the best and most reliable telegram channel for crypto trading signals, with a phenomenal track record of 23/24 successful picks, and an overall profit of 3594%.
23 successes out of 24 are terrific. Such a track record is a good indication of incredible reliability.
4. Analyze Trade Volumes
In cryptocurrency exchanges, trading volume is a basic component to analyze when deciding on what exchange platform to choose.
Because the metrics of trading volumes shows you the number of customers who are buying and selling cryptocurrencies on a cryptocurrency exchange platform.
As a result, if your analytic report shows you a higher metrics of trading volume, it is a green light that the exchange is reliable.
But please take note that some of these exchanges can manipulate the system by using bots to increase their metrics. Hence, the best practice is to go for those that have a terrific track record.
There are many of them in the marketplace, such as:
There is more to the list, however, these are just a few of the most reliable exchanges available.
5. Consider User Experience & Interface (UX & UI)
An important element of a reputable and well-organized exchange is an incredible user experience and easy to use user interface.
These functionalities will boost your working experience and activities on the platform. But you need to know that user experience is personal to each individual and is influenced by personal feelings or emotion.
This simply means that people will have a different opinion based on individual experience and activity on an exchange platform.
But those with amazing user experience and interface are surely going to increase in volume and transactions. Thus, try to find the best crypto exchange that has phenomenal user experience as it will improve your working experience.
6. Do they have a Quality Customer Support System?
Personally, I hate being directed to a frequently ask question page (FAQ) each time I put in a query, because a FAQ page does not always have the answers.
A quality customer service must have a swift responsive customer support system where your queries are answered by a human.
The system must attend to, and solve customer complaints quickly. If there is a delay in responses, customers can lose money in the process.
Accordingly, an exchange service that has a quality customer support system will help to build trust with customers.
As you have noticed, the cryptocurrency exchange market is booming and consistently growing in number. This trend has left many marketers confused as to which exchange channel is the best for business.
Effectively, choosing the best exchange has become a problem for many – especially newbies in the cryptocurrency business.
In this case, a thorough research is required. But make sure to follow the practical tips in this article, as these will help you navigate easily and find the best cryptocurrency exchange for your investment.
Feature image: image given by author
In-Post Image: image given by author
DisclaimerThe writer’s views are expressed as a personal opinion and are for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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