The process of dabbling in bitcoin starts from choosing the exchange. But the whole journey of bitcoin trading can become more fruitful if you use a good bitcoin exchange. However, there are several options in the exchanges, so selecting the ideal one requires time and effort.
The bitcoin exchanges are the ones that store the bitcoin and let traders buy and sell. They act as the middleman between the buyers and sellers of bitcoin. With the help of a good exchange having a simple-to-use website, the whole procedure of trading bitcoin becomes much more accessible for everyone.
But all the exchanges are not made for you to use. There is an increase in security breaches and scam platforms, so you must beware of them. The investor needs to pay attention to many things, starting from the reputation to the platform’s trading fees, before selecting a bitcoin exchange. 5 main key factors you must look out for before selecting a crypto exchange are listed below.
1. The Reputation of the site!
Reputation matters a lot. Whether you are looking for a shop to buy clothes or you are going to deal with your money in bitcoin. The reputation of the platform plays a huge role. Some people don’t consider the platform’s reputation, and later they face significant issues because of it.
You should remember that the reputed bitcoin exchanges can provide you with the best services in a limited period. It is suitable for everyone to show the red flag to unrecognized bitcoin exchanges because you don’t know about the type of services they are providing.
A reputed exchange has a higher amount of trading volume because its customers are in large quantities. So reputation is one significant factor you must check out in the bitcoin exchange before selecting it.
2. Security of the Bitcoin exchange!
An Investor must thoroughly check the safety and security measures taken by the exchange on both mobile and the web. It must not be overlooked as digital tokens are prone to theft and hacking. You will need security in every step of your bitcoin investment journey.
You must pick up the exchange platform with the best security features to offer to its customers. The best bitcoin exchanges also have the extra layers of codes required to be authenticated when buying or selling. You might not know, but the exchange security is critical and should not be ignored.
You should not use any platform with a long history of cyberattacks or scam issues. Many people do not know, but most exchanges offer basic security features such as two-factor authentication. Still, you need to watch out for additional security features.
3. Regulatory Compliance
Anonymity is an integral part of your cryptocurrency, yet everyone is treated equally in front of the law. An exchange must be aware of its buyer in order to facilitate communication.
Global laws to ‘know your customer’ make it mandatory to upload ID proof of your name and address before you can transact anything. AML and Know Your Customer (KYC) regulations must be followed by any bitcoin exchange.
You must always go to a bitcoin exchange that follows your country’s regulatory compliance. Cause in an event such as the FTX crash, that will help you prove ownership of locked funds.
4. Payment modes of the exchange!
To start trading bitcoin on the exchange platform, you must deposit money in the account. A bitcoin exchange offers various payment modes to its users from which you are free to select anyone you want.
Before you select a bitcoin exchange, you must consider the payment modes offered by the exchange platform. A well-reputed exchange provides:
- Options for net banking.
- Debit or credit cards.
- UPI payment.
- Other digital wallets.
If you don’t check it beforehand, you might not be able to deposit funds in the exchange.
5. Fees of the exchange!
No bitcoin exchange will let you trade for free. It will always charge you fees to make the trade, whether buy or sell. There is no standard fee for the exchanges. Every exchange has its fee structure from which they make money.
You might not know, but the exchange charges a fee on every transaction. You should consider the fee charged by the bitcoin exchange in advance. A platform that is not providing transparent info about its fees should be avoided.
You should only select the platform which has the best fee structure. It should be reasonable in amount, so you don’t have to compromise with your losses.
Conclusion!
You should consider these factors while looking for a bitcoin exchange. Of course, all these exchange platforms have features, but these are the most important considerations you should make.
Also Read: Comparison Between Crypto Exchanges: Coinbase vs Binance vs Bitfinex
