Trading cryptocurrency isn’t the same as trading stocks and shares. Understanding the cryptocurrency market takes time because market speculations drive the prices of digital currencies. Looking for professional guidance is better if you are testing the crypto waters for the first time.
A crypto trading platform can make it easier for you. Now, the question is, which crypto trading platform should you choose? Given the overwhelming number of crypto trading platforms, a newbie may need help to decide.
How can you choose the best crypto trading platform?
When you sign up with a crypto exchange, you can buy Bitcoin, Bitcoin Cash, Litecoin, and Ethereum through their websites and apps. You can access the cryptocurrency market no matter where you are. Crypto trading platforms will typically offer a wide range of coins and tokens. So, you have multiple options to create a diversified portfolio.
Top-of-the-line crypto exchanges comply with KYC and AML rules and other financial regulations. You can be confident you won’t get duped when dealing with such exchanges. To be sure you made the right choice of a crypto trading platform, you can use these guidelines:
- Variety of coins: When you are keen to buy cryptocurrencies apart from Bitcoin, make sure the trading platform supports multiple tokens and cryptocurrencies. While some venues may have extensive choices, others may have limited offerings.
- Payment method: Crypto trading platforms offer different ways of funding the account for buying cryptocurrency. Most support wire transfers; some will even allow you to buy using credit or debit cards or other online payment gateways.
- Fees: Some crypto exchanges charge unreasonably high trading and withdrawal fees that can eat into your profits. So, it’s always advisable to research the fee structure before signing up for an exchange for trading. You don’t want to be burdened with hidden fees later on!
- Liquidity: Unless the crypto exchange guarantees sufficient liquidity, you shouldn’t sign up for it. Without high liquidity, you won’t be able to convert your coins into cash and vice versa when the need arises. Every time you try to do that, you have to be prepared to pay a hefty markup that isn’t profitable. This happens because prices spike and crash often in the cryptocurrency market. Look at the platform’s trading volume to get an idea of its liquidity; if the trade volume is high, go ahead.
- Security: Crypto exchanges are the go-to platforms for crypto trading beginners, but they may be a key target for cybercriminals. Exchanges are being hacked, and users are losing their hard-earned money. So, you must select a crypto trading platform that uses stringent, state-of-the-art security measures.
- Customer support: For a newbie struggling to find a footing in crypto, having a round-the-clock support system is crucial. As a new entrant, you will have plenty of queries and concerns. Finding a platform backed by an excellent customer support service team is necessary.
- Reputation: It’s never a good idea to sign up on a trading platform that doesn’t have an excellent track record. Read customer reviews and look into the crypto exchange’s history to be sure that it has a rock-solid reputation.
- Controls: Unlike stock exchanges like the NYSE, which are regulated, crypto exchanges are more relaxed. There are no controls in place to give you peace of mind. What should you do? Look for a trading platform with security controls and audits. That way, you can be confident that your money isn’t wholly unprotected.
- Insurance: Besides looking for digital security measures, you should also inquire about insurance policies when choosing a crypto trading platform. Several exchanges have commercial crime insurance covering theft, dishonesty, cyber fraud, etc. But insurance policies will vary among trading platforms, so always understand your coverage.
Use these guidelines to find a crypto trading platform where you can start buying and selling your cryptocurrencies. You will be surprised how easy and hassle-free the entire trading process can be!