If you have already invested in stocks and real estate, and now you are looking for another viable option to invest your money, why not cryptocurrencies? Not only is it going mainstream due to the emergence of various stablecoins, but it is also becoming a route to earn millions.
The first step in trading cryptocurrencies should be to select cryptocurrency exchanges that work for your goals and follow certain criteria. Not sure how to choose an exchange? Read on as we share all the different tips you need to follow to choose the crypto exchange that best suits your needs.
Check your security measures
Once you check the government regulations on cryptocurrencies in your country, you can start looking at the various security measures exchanges take to protect their clients’ investments and coins. Each cryptocurrency exchange will share this information on their website or app directly. They want to assure customers that their coins are safe from hackers and other threatening forces.
Of course, you’ll want to make sure you follow strict guidelines when setting up your account, making sure to use 2-factor authentication with SMS or Google Authenticator.
Also, consider whether you want to use a decentralized or centralized exchange.
A decentralized exchange offers more security measures than the centralized one, and they also do not ask for your personal information to start with your investments. They also don’t have those intermediaries to guide the transactions. This means there are fewer people involved in your transactions, which makes them more secure.
Most cryptocurrency exchanges that have been around for a while now know how important security is. They will constantly be updating their security measures, informing their clients when they do so. This should help you feel better about using this exchange as they are constantly trying to stay two steps ahead of hackers.
How is your trading volume?
Another thing to consider when choosing a crypto exchange is their trading volume. The largest crypto exchanges will have the highest trading volumes.
This shows you that many other people like you trust the cryptocurrency exchange and have been able to buy the cryptocurrencies they want. They have also been able to get the transactions they want.
You can also check customer reviews from other crypto exchange users like yourself. Look at the top ten crypto exchange lists to see which one always comes out on top.
The more positive reviews the cryptocurrency exchange has, the more likely it is that you too will have a positive experience with it.
Also, when a crypto exchange has a high trading volume, it can offer you a better rate on your transactions. You can get better prices when buying crypto, which is ideal. With smaller exchanges, since they have a smaller trading volume, the prices of cryptocurrencies increase.
The price of cryptocurrencies goes up and down constantly and if you are day trading cryptocurrencies you want to get the best possible price. Even a small percentage difference up and down can make a big difference in your profit margins.
How many cryptocurrencies do they offer?
Due to government regulations, certain cryptocurrency exchanges based in various countries have restrictions on the number of cryptocurrencies they can offer on their platform. This is not ideal for an investor like you who would like to choose from a wide range of cryptocurrencies.
This is why you’ll want to do some research on this to make sure your chosen crypto exchange offers all the different cryptos you’d potentially want to buy. There are more than 20,000 cryptocurrencies on the market now. But that doesn’t mean you want to invest in all of them.
The most important thing here is to find cryptocurrencies that work with your long-term investment strategy and make sure they are available to trade on your chosen exchange. Always do your due diligence when choosing cryptocurrencies and before investing in them.
Experts may have a lot to say about each cryptocurrency, but you’ll need to do your research to make sure it’s a good investment for you. The cryptocurrency market is still quite volatile, so it is important not to get complacent about it.
How easy is it to enter and exit positions and cash out?
There are many cryptocurrency exchanges that have received negative feedback from customers. Why?
This is because users were having difficulty entering and exiting positions and, in particular, withdrawing money from their positions. This is not ideal because the whole point of using an exchange is to be able to move your money from cash to crypto and vice versa easily and without delay.
Verify online customer reviews to make sure that your chosen crypto exchange does not have this difficulty embedded. What are previous users saying about the platform?
It may seem like a lot of work to do this amount of research before choosing your cryptocurrency exchange, but it is better than being stuck using a platform that will not allow you to cash in your positions. Or one that is a week or two late to do so.
Insurance and Rates
Some crypto exchanges will also provide you with insurance on your transactions. This protects you against hacking, theft, cybercrime, phishing, and other types of fraud. Cryptocurrency exchanges offer this to give crypto users that extra peace of mind when transacting with them.
But if they don’t offer this insurance, you can purchase it on your own from the insurance companies. These insurance policies are becoming more popular today because cryptocurrency buyers want protection against cybercrime and fraud losses. However, this does not mean that you start making all kinds of volatile transactions without any strategy or foresight behind it.
The other thing to consider when choosing a crypto exchange is the fees. Each exchange will have its list of fees that it comes with. These fees would be for making transactions, transferring crypto to another exchange, withdrawing money, and more.
You don’t want to pay too much in fees because that will eat up your earnings. Also, some cryptocurrency exchanges charge a fixed fee, while others will charge you a variable fee based on market volatility. Do your research on this to pick the exchange with the lowest potential fee while still getting all the features you want.
How intuitive is the platform to use?
You may have had this experience before. You download a new app or app and sit in a daze for a few minutes while trying to figure out how to use it.
Since cryptocurrency is such a complicated market, you’ll want to make sure you don’t run into this issue when working with your cryptocurrency exchange. The more intuitive and user-friendly the platform, the easier it will be for you to carry out all the necessary transactions.
Many cryptocurrency exchanges will have instructional videos and other training that will help you not only trade, but also learn more about cryptocurrencies in general. If you want to improve your crypto knowledge base, be sure to watch these videos first before making any trades. You can learn more about Bitcoin ATMs here too.
Potential to earn interest and other ways to earn money
Nowadays, buying and selling cryptocurrencies is not the only way to make money on the platform of your choice. Many cryptocurrency exchanges also offer other ways to earn money.
You could potentially earn interest on any crypto you leave in your account over time, just like you would on cash in a savings account. Or you could lend crypto and make a profit on it.
Many cryptocurrency exchanges have come up with creative ways to allow their users to earn money with their cryptocurrencies without trading. If you are a buy-and-hold type of crypto investor, then these alternative earning methods are a great way to earn more cash on your investments.
Selecting crypto exchanges takes some concerted effort
If you follow the advice detailed in the previous article step by step, you will soon have chosen the best cryptocurrency exchange for your cryptocurrency trading strategy. It may take a bit of time, but once you have an exchange, you can start making money from cryptocurrencies soon enough.
There are so many people making hundreds or even thousands of dollars from crypto every week, so why not you too? But first, you need to finish the crypto exchanges selection part.
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