Finding the right cryptocurrency exchange
With literally hundreds of cryptocurrency exchanges in operation all around the world, choosing a cryptocurrency exchange can be a daunting exercise.
How do crypto exchanges differ? How do you even begin to narrow down the list of possible options? Should any exchanges be avoided?
Before you sign up, use these tips to help you assess your exchange options.
First things first
Many cryptocurrency exchange options can be eliminated by asking three simple 'go/no go' questions:
- What cryptocurrency do I want to buy/sell?
Exchanges often trade in only a few (sometimes even just one or two) cryptocurrencies, so it is important to find an exchange that trades in your cryptocurrency of choice. This is especially the case if you're seeking to buy or sell some of the smaller altcoins.
- How will I fund my trading activities?
Exchanges may have limited payment options. You may find an exchange that appears to tick all your boxes, however if they don't accept the method of payment that you hope to use, you're back to the drawing board.
- Where do I live?
Not all exchanges support all regions. Some exchanges may technically speaking support your region, however may not support your local currency. This can result in additional costs incurred for international exchange fees.
Further points to ponder
If you've narrowed down your list of possible exchanges based on these 'go/no go' questions, it's worth considering the following points (weighted to your personal preference) to help pinpoint the right exchange for you.
- Reputation: What do other people think of the exchange? What is its history -- particularly related to fraud or hacks? Is the exchange insured? Does the exchange hold the appropriate licence?
- Fee structure and exchange rates: What fees does the exchange charge to either buy or sell cryptocurrency? Are there any hidden costs? What rates of exchange do they offer?
- Security features: Hackers view crypto exchanges as potential 'honey pots'. Any exchange worth your business should have stringent security measures in place to prevent funds being compromised.
- User verification processes: Although it may be a frustrating wait when you're eager to begin trading, user verification processes respect local laws and help to safeguard against fraud. Consider using exchanges that take user verification seriously and complete this step in a timely way.
- Reliability: What is the exchange's volume of trade? How has the exchange historically handled larger volumes of trade? Bear in mind that exchanges with smaller volumes of trade may take longer than larger exchanges to process your trade.
- Ease of use: This is an important factor in choosing an exchange - especially if you're new to the cryptocurrency marketplace. How user-friendly is the exchange? What helpful features does the exchange have? How responsive is their customer service team?
Cryptocurrency exchanges are in plentiful supply. However after doing some research -- and trying a few firsthand, you'll soon get a feel for those that best meet your trading needs.
Some exchanges -- including Cointree -- even have a demo exchange to help familiarise you with what's involved in buying and selling cryptocurrency.
Why not take a look today?