This article takes a look at important factors for you to consider before choosing the best cryptocurrency exchange. We've come up with a list of exchanges for you.
List of Exchanges
There are many available exchanges that you can buy cryptocurrencies at, and navigating the right exchange can be hard. There’s a number of factors that you have to consider in ensuring that you’ve opened the right exchange based on your expectations, requirements, and what’s best for you. The majority of exchanges offers only the top coins, which usually consists of Bitcoin and Ethereum. (See also: Coins, Tokens & Altcoins: What’s the Difference?)
This guide will help you make an informed decision on what exchanges is available, which you should pick, and the factors that are important to consider when opening a crypto account on an exchange.
Converting Money to Coins
If you’re new to cryptocurrencies, your first step would be to find an exchange that allows you to deposit money. Due to regulations, all exchanges require you to verify your account before depositing your funds, through the submission of your identity proof and any other personal information. Hence, you should find an exchange in your domestic country first to convert money from your bank account into Bitcoin.
It is important to note that not all crypto exchanges accept fiat money; some exchanges only allow you to deposit coins (most commonly Bitcoin) to purchase other alternative coins. Bitcoin is the most popular crypto that is offered on almost all crypto exchanges, and represents the gateway to purchasing other coins. In other words, if you want buy any other coins, you must do the following:
Step 1: Open a domestic cryptocurrency exchange in your country and verify your account (submit identity proof)
Step 2: Deposit funds from your bank account to your crypto exchange account and start buying Bitcoin
Step 3: Open a crypto exchange account that offers a variety of other coin. Usually these exchanges do not accept fiat deposits and only allows coin deposits
Step 4: After verifying your account, transfer the Bitcoin that you’ve bought from your local exchange to your new crypto exchange and you can start buying other coins with your Bitcoin
Important Note: Trading Fees gets smaller with volume. The ones listed on the table are the max range* (Maker fees are paid when you add liquidity to our order book by placing a limit order under the ticker price for buy and above the ticker price for sell. Taker fees are paid when you remove liquidity from our order book by placing any order that is executed against an order of the order book.)
Once you’ve opened an exchange account that allows fiat deposit, you can link your personal bank account with your crypto exchange account and start depositing funds to buy Bitcoins.
Important Factors to Consider:
1. Coin Pairs Available
Many exchanges offer only a handful of coins; the most popular being Bitcoin and Ethereum. There are only a handful of exchanges that offer a wider variety of coins. A more diverse option of coins available is better as it gives you more choices of coins to purchase. (See also: Coins, Tokens & Altcoins: What’s the Difference?)
Liquidity refers to the ease of buying/selling in the market. A high liquidity means that there is a huge number of buyers/sellers. High liquidity is good as it leads to better price discovery and it allows you to transact faster.
The level and type of security mechanisms employed by an exchange is vital in ensuring that your coins are safe. Examples of good security practices undertaken by exchanges include:
a) Keeping deposits in cold storage; this means that your coins are safely tucked away offline, beyond the reach of hackers
b) Availability of 2-factor authentication (2FA) option; 2FA increases the security of your account
c) Email encryption and verification; for every transaction there will be an email sent to your account to confirm the transaction
4. Customer Support Quality
Having a responsive customer support would save you lots of time and anxiousness, especially in a fast-paced environment. Issues on your verification process, deposit/withdrawals, funds reflection and trading orders should be solved quickly by the exchanges, or it could cost compromise you time, money and well-being.
5. Trading Fees
Low transaction fees on buying and selling would relatively prevent your margins to be eaten away, especially if you’re a constant trader. It is important to look at the fees of your exchange, to see if it’s relatively comparable to other exchanges.
6. Ease of Use
The user interface of the exchange should be easy to use and clean to avoid confusion. Having the necessary indicators at the tip of your fingers and the ease of navigating through the platform should make it easy for anyone to use the interface. (Read also: Guide to Common Crypto Terms)
All in All
Choosing an exchange is the gateway to the crypto world. There are many factors to consider when choosing the best exchange, and the aforementioned factors should serve as a guide. Feel free to ask any questions and we’ll get back to you as soon as we can!
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I'm Aziz, a seasoned cryptocurrency trader who's really passionate about 2 things; #1) the awesome-revolutionary blockchain technology underlying crypto and #2) helping make bitcoin great ‘again'!