Cryptocurrency exchanges play a crucial role in the adoption of virtual currencies. Each cryptocurrency exchange has its own unique characteristics and advantages, so it is important to consider the following factors when choosing a cryptocurrency exchange. If you are serious about crypto trading, you should learn about the different types of cryptocurrency exchanges and focus your attention on those that offer the most potential for profits.
Once you understand the differences, you will be well on your way to becoming a successful cryptocurrency investor. We list down some of the most important factors to consider when choosing a cryptocurrency exchange. Keep reading to discover our favorite exchanges of all time!
7 Factors To Consider When Choosing A Cryptocurrency Exchange
1. What is the purpose of a cryptocurrency exchange?
A cryptocurrency exchange is where you buy and sell cryptocurrencies with other people. This is often done using a trading platform, where you connect with other traders using an app. You can then collectively trade and buy or sell cryptocurrencies using that app. The most common type of exchanges are online trading platforms. These usually offer trading in multiple cryptocurrencies, like Bitcoin, Ethereum, Litecoin, etc. You can find plenty of online trading platforms that will also allow you to trade fiat currencies like the USD, GBP, JPY, etc.
2. Live or online trading
A significant amount of trading is done online. There are a few exchanges which allow you to trade 24/7, like Bitstamp and Coinbase. Many other exchanges allow limited trading hours, but offer a full array of features otherwise. Some exchanges, like Kraken, provide live trading in real time. You can follow the market action and price movements via real-time notifications.
3. High volume or low volume
If you’re trading large volumes or small amounts, low volume exchanges are better than high volume ones. It is harder for an exchange to get hacked when there are very few trading sessions taking place. Consequently, it’s harder for an exchange to get overwhelmed when there are lots of trades going on at the same time.
4. Cryptocurrency exchanges that provide fiat currency support
Some exchanges, like Bitfinex, support major fiat currencies like the US dollar, the euro, the GBP, and the JPY. This is a big advantage for people who are interested in trading fiat currencies, but don’t want to use an exchange that doesn’t support their local currency. This is usually the case for countries with a single currency, like Australia, Canada, India, New Zealand, etc.
5. Digital assets or fiat currencies
Some exchanges, like Kraken, allow you to trade digital assets like Bitcoin and Ethereum. This is a great option if you are interested in trading cryptocurrencies, but don’t want to deal with the technicalities of trading real estate or stocks. You can just press a button and buy or sell cryptocurrencies without having to know anything about it.
6. Quick and easy account opening
Some exchanges, like Coinbase, require you to create an account first, even though you don’t usually have to do this with other exchanges. This is because Coinbase is trying to make the process as easy as possible, which is why it asks for your contact info, such as your email address. There are plenty of exchanges that don’t require you to create an account, like Bitstamp, Kraken, and Cex, which are excellent for fiat currency trading.
7. Exchanges with good customer service
Some exchanges, like Kraken, have great customer service. This is mainly due to the fact that they have been around for a long time and have been well tested in the marketplace. Kraken has a great reputation as a trustworthy trading platform, which is why people continue to use it even though they have moved to a new trading platform.
A great deal of trading is done online these days, with most exchanges welcoming fiat currency and cryptocurrency trades. This means that you’ll need to choose an exchange that caters properly for both types of trades. There are numerous factors to consider when choosing a cryptocurrency exchange, and it’s important to keep them in mind when making your decision. So, what’s the best one? Well, that depends on how you want to use it.
If you’re mainly in it for the profits, we recommend Bitstamp. If you’re more interested in getting involved in the peer-to-peer currency economy, Kraken is a better option. When it comes to choosing a cryptocurrency exchange, you want one that offers high potential for profits, has a good track record, and is user-friendly. Bitstamp has all three of these things, as well as reliable support. Kraken doesn’t come close, and we wouldn’t recommend using it as your only exchange.