With so many crypto exchange available, it becomes quite difficult to choose the best. Hence in this blog, we will discuss some major points that you conder while choosing a cryptocurrency exchange as per your needs and utility. There are many factors that you should consider and here are a few of them listed.
Juridications and Regulations
This looks quite easy to understand but it is quite important. Most of the cryptocurrencies are not compliant with the rules and regulations of the country. Hence it is not possible to use such exchanges since it is considered to be illegal activity.
For example, many of the cryptocurrency exchanges have websites based on their country, like exchange.us (only available in the US for their citizens). Based on the jurisdiction, every cryptocurrency exchange has a specific market to target.
Easy to use
Are you an expert at trading?
For many new investors, it would be quite overwhelming to use cryptocurrency exchanges since they involve a lot of display order books and complex charts. If you are new to such a platform, it is always advisable to use an exchange that offers you a basic view along with an advanced view.
Cryptocurrency exchanges such as BlockFi, Gemini, Binance, Square, Coinbase are well suited for beginners whereas exchanges like Bitfinex, Coinbase Pro, FTX are useful for experienced traders.
Liquidity is quite important because all the trades depend on it. If there is low liquidity in the market then there would less movement. Due to which you won’t be able to make trades that quickly.
Also, liquidity plays an important role when there is huge volatility. Exchanges with low liquidity can have more volatile movements. Hence you should always consider using an exchange with high liquidity volume.
Not every exchange has all the coins listed that you might want to trade-in. In many cases, exchanges prefer to list tokens which a high market cap. If you are looking to trade into more exotic tokens then you should search for exchanges that have listed them. CoinMarketCap is the best website to get a list of all the exchanges that trade any coin of your choice. You can simply browse their website and scroll to the market section. This will help you to find the best exchange for the token that you want.
It is quite essential that you use a secure cryptocurrency exchange. While you buy cryptocurrencies on some exchange, it gets stored in the exchange’s vault, not yours. There have been a few instances where a few exchanges have got shut down and people ran away with all the cryptocurrencies. Hence you should try to find an exchange, that gives you all the information about their security system.
If you are going to trade cryptocurrency, then you should choose an exchange that allows you to buy tokens in a hassle-free way. Also, you should consider all such factors before choosing any exchange. Also, there are decentralized exchanges available, but use them if you are not a beginner.