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How to Pick the Best Cryptocurrency Exchange? All You Need to Know

Written by: Coinpedia

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Coinpedia

Crypto Journalist and Editor of guest articles in CoinPedia. I am also handling Outreach & Partnerships Manager. Contact me: [email protected]

    Dec 20, 2021

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    The financial market is going through a revolution, with cryptocurrencies having billions of dollars invested in them. Crypto trading is on the global radar. But how can you buy Bitcoin, Litecoin, Ethereum, or any other cryptocurrency?

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    Forex trading has been around for ages, exchanging currencies according to their rates on the international market. Similarly, crypto exchanges are digital trading facilities to buy and sell crypto using your traditional money or trade one cryptocurrency for another. The primary factor reeling in investors in crypto from every corner of the world is its high profitability and low bars for investment.

    However, a successful stride in the crypto industry requires investors to trade through only the best crypto exchanges that offer them the best value.

    Centralized and Decentralized Exchanges

    Crypto is a decentralized currency which means it cannot be controlled nor traded through centralized financial institutions such as, Central banks and the International Monetary Fund. The differences between a centralized exchange and a decentralized exchange make crypto trading possible for you.

    Centralized ExchangesDecentralized Exchanges
    Runs as a profit-oriented organization that earns revenue by transfer fees.Don’t rely on third-party services for revenue.
    Exchange controlled funds.Users controlled funds.
    Transactions are processed through exchange authorized protocol which is monitored 24/7 for security and functionalityTrading occurs between users in an automated process without requiring approval from an authorized body.
    FIAT gateway.Not a FIAT gateway.
    Possible theft threats and server downtime.Not exposed to theft and server downtime.
    High liquidity.Low liquidity.

    What Do You Need to Look for in a Crypto Exchange?

    There are certain factors that you should consider when choosing a crypto exchange to trade for maximum profitability.

    Security

    As mentioned earlier, crypto is not traded under central organizations that monitor every transaction. Hence, the top crypto exchanges have put in systems to ensure the safety of your investment. While some exchanges put balances of their traditional currency in insured bank accounts, others protect your digital investment by insuring their financial service against hacking. Make sure you choose an exchange that provides you with robust security.

    Accessibility

    One thing that makes choosing the right exchange critical is the accessibility factor. Different countries have different restrictions on trading cryptocurrencies. For example, China has blocked all of its population’s access to every crypto exchange. The U.S. only allows specific exchanges to operate in its territory. Find a crypto broker that you can access in your geographical locations.

    Fees

    Fees refer to the transaction fee brokers charge for processing exchanges of any kind. It is a rather subjective factor depending on the financial goals and budget of a trader. However, most crypto exchanges that have high fees offer better protection of your valuable investment. So before choosing an exchange that meets your financial goals, consider what value it provides you for a higher fee.

    Coins Offered

    Although there are tens of crypto exchanges you can find online, most of them offer limited currencies for trade. You can find what currency each exchange platform is offering, so you pick the one that offers the crypto you want to trade. Bitcoin, Litecoin, and Ethereum are the most common currencies you will find across all crypto exchanges.

    Which Crypto Exchanges Are Best For Traders

    These are the best crypto exchanges you can choose from:

    1. Binance.US
    2. Bittrex
    3. Coinbase
    4. CEX.IO
    5. Gemini
    6. Kraken

    Choose Wisely

    Crypto exchanges make money by trading fees, listing fees, market making, and fund collection. They have their ways to strive. But it is up to you to choose the best crypto exchange that suits you best. Remember that it is not necessary that whichever exchange offers the most benefits is the right fit for you. Some investors might attract more to security, but the same exchange might not be accessible for others. You can visit bitcoin pro for more information regarding crypto exchanges and learn to make a better decision.

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    Coinpedia

    Crypto Journalist and Editor of guest articles in CoinPedia. I am also handling Outreach & Partnerships Manager. Contact me: [email protected]

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