10 Key Things to Know When Joining a Cryptocurrency Exchange
Selecting the right Cryptocurrency Trading Platform may be one of the most important basic tasks for a crypto trader or investor. Joining the wrong crypto trading platform could potentially lead down to distractions, loss and wasted effort.
When it comes to selecting crypto exchange, traders must be clear about their requirements. For instance, do you want to trade regularly or looking for long term investment?
After the crypto trader determined his or her goals it is essential for traders to consider the following aspects such as exchange security, country regulations and host of other important factors. Below is a list of ten important things to know when joining a cryptocurrency exchange.
Crypto exchanges comply with different rules and regulations, based on practices, locations, and offerings. Most exchanges have KYC and AML practices, which need participants to submit personal details before opening an account.
These requirements and practices, however, vary from platform to platform. Some crypto exchanges require KYC/AML to lift certain limitations or withdraw funds. Customers need to provide proof of residence, photo identification cards, and other basic information as part of the process.
The cryptocurrency space is still a new industry, hence it is important to join crypto trading platforms that are reputed and reliable. Many exchanges have been involved in hacks, scams and various other nefarious activities, leaving users in a tough situation.
Conduct research on various crypto exchanges, check reviews and reputation of the platform before joining. Search the exchange on all social media sites to see if there are any complaints posted. Also, check each platform’s terms and conditions thoroughly.
Crypto exchange has its own security features. Join the crypto trading platform that offers 2FA or two-factor authentication. If not, the exchange won’t be suitable considering today’s security standards.
Also, check what type of 2FA is suitable. There are several 2FA such as Google authenticator, mobile text-based and Yubikey. Know the security measures properly before joining the exchange, one most important aspect.
4. Insurance fund
Are you using a crypto exchange platform that has an insurance fund? Not many customers are aware of this but there are certain exchanges placing funds to compensate customers under worst scenarios.
5. Fiat exchange
Investors and traders at some point prefer a fiat compatible platform to sell or Buy Cryptocurrency with Fiat. Some crypto exchanges have different options; go through all these carefully to know what works.
6. Leverage trading
Few crypto exchanges frequently provide leverage trading. This feature essentially allows investors or traders to borrow funds for trades according to the amount they hold on exchanges. Leverage is important for traders entering a short-term position with a large investment. Several exchanges offer leverage, though with varying terms and conditions.
Crypto exchange trading volume varies based on participants using them at a specific time, as well as the amount traded. This is an important aspect to select a crypto exchange. For instance, if a trader is willing to sell 100 BTC, he or she may not get enough options on a low volume exchange, forcing the trader to sell at low offers.
Check the volume of the crypto trading platform carefully before joining. Volume issues complicate cryptocurrency position on a few exchanges, making it tough to buy or sell a huge amount of these assets.
Cryptocurrency prices vary across different exchanges. Digital assets may trade higher or lower on any particular exchange compared to another because of its location, volume, and other important factors. Taking into count these factors can help you select the right exchange. More importantly price discrepancy can also be a warning sign that the exchange suffers from low volume and liquidity.
9. Asset selection
Popular crypto assets such as Bitcoin, Ether, Litecoin and Bitcoin Cash are widely available on most exchanges. Lesser- known coins or tokes are not available on a few exchanges. Hence know which cryptocurrencies each exchange offers, accordingly to your need.
Popular online exchanges charge nominal to small fee for every crypto trade. These fees depend on the platform, mainly on its percentage of the trade. Investors may not be so bothered about fees but traders do. Few crypto exchanges have withdrawal limits and fees, hence doing your own research is one best option before entering the crypto space.
The above mentioned 10 points are the most important things to consider and research when you are joining a crypto exchange. However, these factors or points vary from person to person based on their activities, values, and goals. Detailed research and understanding of facts can prove to be quite helpful for this fast developing crypto industry.
These are some of the important points to consider about cryptocurrency trading platform, for more information feel free to share your queries here.