Four factors to consider when choosing a cryptocurrency exchange

Four factors to consider when choosing a cryptocurrency exchange
An increasing number of people are interested in cryptocurrency, ranging from investors to financial institutions. If you want to trade cryptocurrencies as well, you will first need an account with a cryptocurrency exchange. These platforms allow you to trade virtual currencies for other assets, such as fiat or virtual currencies and act as an intermediary for the buyer and seller. Stick to the most popular and trading apps, check rates before buying cryptocurrencies, and don’t invest more than you are willing to lose, especially if you are a beginner in the crypto world.
There are many cryptocurrency exchanges out there, and choosing the best one can be overwhelming. However, a good starting point is to check if the person you have your eyes on is available in your country. Then go on to study aspects like security, fees, and user experience. Not all of these platforms are created the same: some can be overly complex, others are shady, and many charge high fees.
If you are new to the cryptocurrency space, it can be difficult to differentiate a reputable provider from one that only seems to offer quality. You know you can’t just give your personal data and money to the first app you come across. But being careful and understanding the following factors that you should analyze before registering with the exchange can be beneficial for your cryptocurrency trading experience.

technology
According to some experts, many industries, including law and finance, may be disrupted due to blockchain and related technology. Advantages of cryptocurrencies include decentralized systems that do not fail and cheaper and faster money transfers. A cryptocurrency, such as Bitcoin, Ethereum, or the US dollar, is a digital medium of exchange and uses cryptography to verify the transfer of funds or regulate the creation of monetary units. This has earned people’s trust in encryption applications, especially because there is no third party involved, and there is no room for corruption.
However, you should not rely solely on the genius of developers because no one can guarantee 100% that your wealth is untouchable. There are some features to analyze before signing up for an encryption app, such as:
– The web address must start with HTTPS because HTTP connections mean that the web page is not secured. You should use two-factor authentication for login security – your username, password, and only a piece of information that you own.
– Small customer deposits can stay in the app’s wallet if the exchange is large and secure enough, but large deposits are best kept offline, in what’s known as “cold storage”.
The platform should send SMS and email alerts and have audit software that monitors activity every second for additional security assurance.
What you can do for maximum security is to put your withdrawal wallet’s IP address or addresses on a safe list.

Liquidity
Liquidity is crucial for a good platform as it is about being able to easily convert your coins into cash and vice versa without charging high fees. This is especially true in the world of digital assets, where prices fluctuate from minute to minute.
When you check on Binance and see that the price of the coin you want to buy is skyrocketing, you most likely want your buy order to be executed quickly and at the price displayed on the screen. Likewise, you may want to quickly get rid of a coin that is gradually losing value. However, these tactics are available to swing day traders, because long-term investors adopt buy-and-hold strategies, holding cryptocurrencies in hopes of a higher price.
The quickest way to determine if an exchange has sufficient liquidity is to examine its trading volume: the higher, the better. There are popular cryptocurrency information websites that provide 24 hour trading volume for hundreds of exchanges.

protection
Cryptocurrency exchanges allow you to buy, store, sell and trade virtual currencies, but do not forget that they will also have access to personal information about you. It is essential to choose a platform that is large enough – if not the largest – because these platforms have the funds to invest in security tools and software.
Before you wonder how to buy cryptocurrency, understand how important it is to secure your money and data. You should not put your trust in an unreliable crypto exchange, as they may leave you vulnerable to fraud, money theft and data breaches. This is why seasoned investors recommend you to only go to respected and well-known cryptocurrency trading platforms.
There are also scams and traps that you can easily fall into, so check the following aspects to decide if the chosen exchange is safe or not:
Deposit and withdrawal limits
– Customer support
Trading volume
– Transparency
– insurance
– expenses.

Fees and legal aspects
It is possible and legal to use exchanges from other countries, but it is recommended to use one from your own country. Some platforms only support a small number of countries, and not selecting a foreign country may make regulatory changes easier to comply with. It is also worth noting that if you lose your money, you may be compensated, if the exchange has this type of insurance.
After you are done with the legalities, you should compare exchange fees. It is usually not more than 1% per transaction and may decrease as your trading volume grows. Many apps are also known to charge exorbitant withdrawal fees for specific altcoins.
Look at deposit fees too, many exchanges offer a quick and easy way to buy virtual currencies with a debit or credit card, but this service usually comes with a fee of 5% or higher.

Extra tips
If you value anonymity, you should probably avoid any exchange that requires you to reveal too much about who you are. However, you cannot skip the KYC exchange process. You should know in advance that the chosen platform may ask you to submit personally identifiable information, which typically includes your date of birth, full name, address, email address, telephone number, and social security numbers.
However, you can rejoice because finding a reliable, easy-to-use, and fee-cheap exchange is not difficult. If you pay more attention to more aspects than are summarized above, you can rest assured that you have minimized the risks related to the stock exchange. These are some additional tips recommended for both beginners and experienced traders:
– Check how many currencies you can trade on the chosen platform
Check her insurance policy
Take control of your tax reports.