Cryptocurrencies continue to dominate all around the world. It provides users with a fresh and convenient way of making transactions. The market comes with high liquidity, so you need to prefer for cryptocurrency exchanges. To help you learn more about crypto exchanges, read further.
Types of Exchanges
In blockchain technology, there are 2 types of exchanges, the decentralized and centralized exchanges. Let us differentiate these types below.
- Decentralized exchanges
This type of exchange adopts blockchain technology and works on peer to peer protocol. The system works with the number of independent nodes.
- Centralized exchanges
It resists the blockchain values since the assets are regulated by a central entity, which can cause trust issues.
Choosing a Crypto Exchange
There are various crypto exchanges in the market, so you need to choose the right one that can meet your trading needs. Even more important, you need to choose a reliable platform to make your crypto trading. You can prefer a Bitcoin. They can give you an excellent trading platform for cryptocurrencies.
The following are some helpful tips in choosing the best crypto exchange.
Make sure to choose an exchange that comes with a good reputation. With that, you have the assurance that your investment is in the right hands. Find an exchange that doesn’t have a record for hacks, illegal activities, and exit scams. You can conduct a research, so you don’t have disappointments in the end.
- AML/ KYC
Keep in mind that various crypto exchanges have different regulations and laws, depending on their offerings, practices, and location. Some exchanges practice AML (Anti-Money Laundering) and KYC Know Your Customer. With this, you can submit personal details. Some need it to lift some limitations or withdraw funds. It may require you to give proof of residence and copies of photo identification. Moreover, some need customer verification upon the procedure of making accounts.
- Insurance fund
Some exchanges provide insurance fund. So, they can compensate clients under certain conditions.
Another major factor in choosing a crypto exchange is security. Do they have 2-factor authentication (2FA)? If they don’t have, then you are risking your security. If an exchange doesn’t have this feature, it doesn’t adhere to security standards in the market.
- Fiat exchange
As a trader, for sure, you are looking for an exchange that can provide you with fiat exchange, So, you can transfer national currencies into crypto for your trading. You can check if your potential exchange can provide this service.
Some exchanges can charge a lower fee for a trade, which can depend on the platform and the percentage of the trade. Some exchanges also come with limits and withdrawal fees.
The crypto-assets can be lower or higher, depending on the platform.
Volume is another thing to consider since it can affect your exit and enter positions.
- Leverage trading
Leverage trading is important if you want to make short-term positions with a bigger size.
- Asset selection
Make sure to choose an exchange that has wide asset selection, including Ethereum, Bitcoin, Litecoin, and other cryptocurrencies.
Crypto exchanges are necessary for your crypto trading. So, you must choose a reliable one to send and receive cryptocurrencies. With that, you can have the best experience when it comes to your crypto investment.
If you want to get the best cryptocurrency exchange, you must apply the tips mentioned above. It can guide you to get a reputable exchange that can serve you the best platform on gaining profits with your trading. In addition to a reliable exchange, you must develop an effective trading strategy to avoid financial losses that can bring you regret.