In order to buy and sell cryptocurrencies, a bitcoin exchange is required. Choosing the right exchange is the first major step that potential investors and traders need to take. Your journey depends on the cryptocurrency exchange you choose, as if you choose the wrong exchange, it could lead down to a road full of distractions and hurdles.
Before you look for or choose the exchange, you need to know your goals or requirements. Exchanges are online marketplaces that allow users to buy and sell digital assets. Learn more about exchanges on Crypto Genius and learn how exchanges and bitcoin network works.
In reality, Spot Bitcoin is the real bitcoin that a trader or investors can either buy, sell or transfer to a cryptocurrency exchange that allows users to hold bitcoin for the required period of time. A trader needs to set objectives, and once you know your objectives, you need to look into different aspects, including exchange security, country regulations, and other aspects.
In this article, we will put different highlight areas that are imperative to consider while choosing a cryptocurrency exchange, which is as follows:
Check out the below points while choosing the right cryptocurrency exchange
Reputation
The cryptocurrency space is a completely new industry, and therefore before you choose an exchange, you must know about each exchange’s reputation. Lately, many exchanges have participated in hacks, scams, nefarious activities, and more. Proper research must be done on an exchange, and you must search on search engines about the results of scam exchanges.
You can also check the history and details of different exchanges on social media platforms and can learn about them. Check if there are any complaints in history or if there are any reports of scams or hacks. Also, check the terms and conditions of different exchanges. Social media platforms are usually the alarming places that inform you about the alerts.
KYC/AML
All the exchanges are subject to follow some laws and regulations and laws and regulations differ according to practices, offerings, and locations. Some reputable exchanges have practices of Anti-Money Laundering and Know Your Customer, and those exchanges necessitate users to submit their personal documents while creating an account with a cryptocurrency exchange.
All the requirements and practices vary in different exchanges, and some platforms require AML and KYC to deposit and withdraw the funds following certain specific limits that require users to provide copies of their proof of residence and other personal documents.
Fiat exchange
Both the investors and traders require an exchange to convert their cryptocurrencies into standard currencies. There are some exchanges that allow users to transfer cryptocurrencies to national currencies for the use of trading and allow the user to withdraw the profits in national currencies. At the same time, some exchanges offer different fiat exchange options that are compatible with only a few banks. Before you start working with an exchange, you must check how the banks’ exchanges work and what are the different types of fiat currencies that they allow you to trade.
Security
Exchanges are the online marketplaces that are vulnerable to cyber-attacks, and therefore it is important to choose the exchange that takes care of their customers and provides the ultimate security. Every exchange has its own methods of security, and before you choose an exchange, you must learn about the security features it offers.
Check whether the exchange enables two-factor authentication or multi-factor authentication or not. If the exchange you are looking at doesn’t offer 2FA or multi-factor authentication, then the exchange may not be accepted according to the standards of today. Every exchange has different security measures, and you must gain knowledge about what exchanges offer.
Insurance fund
Traders and investors must also check with the exchange whether they offer insurance funds or not. There are some exchanges that have funds to compensate their users under certain circumstances, whereas there are some exchanges that are covered under FDIC, i.e., Federal Deposit Insurance Corporation.
Prices
Each exchange has different prices of valuable assets. Some crypto assets trade lower or higher on a specific exchange as compared to others. Price discrepancy is a major factor due to which most exchanges suffer from low volume and liquidity.