Choose the Right Crypto Exchange Platform With These Expert Tips
Cryptocurrencies have been on the rise since the mid-2000s. After their massive bull run last year, it’s apparent that this young and bold financial instrument is here to stay. Like many others, you might be interested in finally diving deep into the crypto industry but there are a few things that you need to take note of first.
The exchange or the broker where you buy, sell and hold your cryptos matters a lot. With so many exchanges to choose from, it can be quite difficult to find and see which ones are truly worth placing your money on. As a new investor, knowing which exchanges are the best is very important.
If you want to maximize your money’s growth while ensuring that you are on a safe exchange, then consider these tips before relying on a crypto trading platform.
A good crypto exchange should have many options for transferring funds. Most commonly, the methods to transfer money into the exchange include bank deposits, online banking, remittance centers, and other crypto exchanges as well.
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If there are more options to purchase and withdraw funds, the better the exchange is as it is going to be more versatile for you to trade with. It’s also a good means to have a backup method of payment just in case others are offline.
As this is money we are talking about, security should matter when choosing the exchange to invest in. A good way to check if a website has good security measures is by checking how hard it is to create an account. The harder it is, the more secure the platform is going to be.
A crypto exchange should have multi-factor authentication features. The use of passphrases and OTPs is very important as this limits how much hackers can do to get to your account. Aside from that, check the exchange’s history for any security problems in the past.
In the world of crypto, “staking” is a term that means you lend a broker a value of your token, in exchange for returns. Staking will lock your coin for a set period which can be somewhere between 3 to 12 months. It’s a good way to generate passive income but not all platforms have staking.
Staking is a viable option for those that prefer holding their crypto and wait for it to grow instead of trading it. Coins bought and sold using crypto exchanges do have the potential for growth. However, if you want regular gains, then staking is the way to go.
Of course, there are downsides to staking as well. For one, if the value of your token suddenly drops during your contract period, you have no means to sell your coins whatsoever as they are going to be locked in place. Another problem with this is that not all tokens have staking so the ones you are planning to have might not be feasible for it.
There are always fees when you are buying or selling your crypto. It is very important that you check this out before you trade with a platform. Remember, you are going to be making transactions regularly so it’s best to go with platforms that have generally lower fees.
All crypto exchange platforms are going to have fees. Those that don’t have any are most likely scam exchanges. Fees are required to keep the exchange operating smoothly and these are essential parts of the ecosystem.
Thanks to the internet, the dirt and deeds of a company are readily available online. As such, you should always look towards a company’s history before you trade on their platform. Look for any issues with securities, fees, and basically anything about the platform that serves as a red flag.
All details like these should be easy to find. Check on forums and news websites for all bits of notable information about an exchange.
One of the big misconceptions when it comes to cryptos is that all platforms can trade all currencies. That’s not the case most of the time. In fact, most exchanges trade only the top 50 to 100 coins at most. While exchanges do list the coins on their platform, not all of them make it tradeable.
Picking a platform with a wide selection of cryptos to choose from is a good idea as it can expand the opportunities for trading. Aside from the top cryptos, it can be a good idea to invest in up-and-coming altcoins that have a ton of potential as well.
However, keep in mind that there is a downside to this too. If platforms list more coins, this usually means that they can also trade coins that are very volatile. Meme coins have become popular in the last couple of months.
Platforms with a wide selection of coins could list these meme coins. While the low price can be enticing to invest in, never forget about the risks that follow.
DYOR stands for Do Your Own Research. While this guide is a good way to narrow down your choices for the best crypto platform, it is still a lot better if you do your own research about the platforms you are interested in. Check out the pros, cons, and risks that are tied to the platform.
Most importantly though, research about the coins you want to invest in or on the crypto market in general as well. This is still a young financial market so there are risks involved. By now, you should also be well aware of the volatility in the market as well.
Investing in cryptocurrencies can result in massive gains but keep in mind that there are a ton of risks as well. One way to mitigate those risks is by investing only in good crypto exchanges. Hopefully, this guide directs you to the best platforms that you can find currently.