Did you know that there’s a post about Bitcoin every three seconds? That tells you a lot about the growth of cryptocurrency over the last decade.
Now is the time to jump on the crypto trading bandwagon. If you want to start trading cryptocurrency, you need to choose a crypto exchange.
Selecting a crypto exchange isn’t as simple as it seems. There are a lot of exchanges out there, but most of them might not be what you need.
Read on to learn what you should consider when you’re looking at crypto exchange options.
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Centralized vs. Decentralized
There are two main types of crypto exchanges. A decentralized exchange (DEX) lets you engage in peer-to-peer trades.
It gives you more privacy to make the trades. It uses smart contracts, which is a type of executable code on the blockchain.
A centralized exchange (CEX) has a third-party serve as the go-between to make trades. They work like stock brokers, where you can set your sell price, buy price, and pay commissions.
The general rule is that beginners should start with a centralized exchange and more advanced cryptocurrency traders use a decentralized exchange.
User Experience
If a platform is too hard to use, you won’t use it at all. If you’re a beginner, you want to make sure the user experience is intuitive and easy to navigate.
You can find out about the interface by reading online reviews. They’ll usually say if a platform is beginner-friendly or not.
The other option is to see if there’s a free trial to test it out. Between the two, you’ll be able to learn more about the overall user experience.
Fees are part of the user experience, too. These exchanges charge a percentage of every trade. Fees range between 1% and 5%.
You’ll want to weigh the quality of the exchange against the fees. You might find that you’re better off paying more in fees for peace of mind and better quality.
Crypto Assets
You might want to trade specific types of cryptocurrency. The exchange needs to offer those assets that you want to trade.
Let’s say you want to buy Cardano. Does the exchange allow you to do so? It’s the same whether you want to trade Bitcoin or Dogecoin.
Location
The location is important when selecting a crypto exchange. That’s because if an exchange turns out to be a scam, you want to be able to have some recourse to get your money back.
That can’t happen if you’re in one country and your chosen crypto exchange is in another. It’s best to choose an exchange in your country or in a country that regulates crypto exchanges.
Tips for Selecting a Crypto Exchange
Let’s face it, there’s a lot to think about when selecting a crypto exchange. You just learned some of the top things to look for to find the best crypto exchange to fit your needs.
If you want to make the most out of trading cryptocurrency, you’ll put them to use as you’re choosing your exchange.
For more helpful financial tips, check out the other articles on the blog today!