If you’re interested in cryptocurrency or are looking to buy bitcoin, the marketplace may seem like a confusing and even dangerous place. Even seasoned investors and traders are often on the look for better exchanges, and many switch exchanges at least once in several years.
Moreover, crypto exchanges differ greatly from one another, especially when you consider the variety of different features and functions.
From fees to security and protection, exchanges have a wide range of different metrics, and finding the best exchange is no simple task. This guide compiles the top 8 things to consider when you’re picking your crypto exchange as well as my personal recommendation at the bottom!
1 – Fees
Let’s be honest, no one likes paying fees, so the common inclination of new crypto traders is to find exchanges, that are offering the lowest fees. This comes with pitfalls as low fee exchanges tend to be very budget-driven in every aspect. If an exchange is only taking a small amount, there is only going to be so much they can reinvest in the security of the exchange itself.
This is why you the most popular exchanges tend to have middle of the road fee structures. You should avoid low-fee exchanges if possible.
2 – Diversity of Cryptocurrency
There are many exchanges that offer a small selection of cryptocurrencies while some other platforms offer literally thousands of different cryptocurrencies. Of course, crypto exchanges with a small selection of coins tend to be driven towards only those cryptos that are lucrative enough to work with. Likewise, the exchanges that have many hundreds or even thousands of cryptocurrencies tend not to vet or check the credibility of the currencies they add.
Good exchanges will be open to new tokens and currencies but will not be easy for a cryptocurrency developer to gain access to. This is because good exchanges want to protect users and scam currencies get weeded out.
3 – Ease of Use
This point is often overlooked, especially if a trader sees that a certain exchange has a currency they want or that the fee structure is competitive. The simple fact remains that if you can’t use a platform easily, the probability of making mistakes and paying for them is noticeably increasing. Whether it be because you couldn’t sell your currency in time or you miss out on a sharp rise because the purchase was not easy to do – an exchange is only as good as its comfort of use.
4 – Hacking protection
It should come as no surprise that hackers target exchanges, brokers, and cryptocurrency platforms more often than individual users. This is because the financial incentive is greater to target exchanges rather than individuals (unless the individual in question is Satoshi Nakamoto).
Many high-profile hacks have been targeted on exchanges and it is something that users should definitely consider when looking for an exchange. Has the exchange been hacked before? How much was stolen? How long ago the exchange was hacked?
Finding the answers to these questions will often leave you surprised, especially because most of the big names are frequently targeted.
5 – Regulation and Money Laundering
From one criminal element to another – unfortunately many exchanges do very little to verify customers and users which means that they become a hotbed of criminal activity. It is best to avoid such platforms.
Exchanges that submit or work with regulators as well as do know-your-customer checks are definitely the platforms that you want to be trading on.
6 – Faster Payments
Some cryptocurrency is slow to transact. But, that doesn’t mean that the process should be even more slowly because you have chosen the wrong exchange.
Exchanges that process payments in real-time and aim to deposit funds quickly are worth their weight in gold. Rarely, exchanges even have standing with external banking institutions and regulators to offer faster payments as a trusted provider. This means that selling your Bitcoin equates to instant money in your actual bank account.
7 – Accurate Pricing
A common trick by low fee exchanges is to build in a profit margin to their pricing. This is also a tactic used across many exchanges to generate more revenue. This is the reason why some exchanges have wildly different prices for crypto compared to others. Sometimes this difference can even be as much as $100 in the case of Bitcoin.
Look for exchanges that price consistently over time and that the prices they advertise stack up with the prices you get. Exchanges that aren’t regulated (see point 5) often get away with price manipulation because they aren’t responsible for anyone.
8 – Payment Options
When it comes to buying things, we want to know that we can use the debit or credit card in our wallet or the payment provider of choice. It becomes very frustrating when exchange shopping and finding that the payment facilities are subpar or limited. Look for an exchange that has many payment options as well as the desire to add more in the future.
CEX.IO – My Preferred Exchange
If you want to find an exchange that fits all the above-mentioned criteria, look no further than CEX.io. They go out of their way to provide a simple, easy to use platform that is safe and hasn’t been hacked. They even provide faster payments on the faster payments UK scheme which is incredible considering how high the UK financial regulation standard is.
You really can’t go wrong with CEX.io so make sure you check them out and give them a try today. You won’t be disappointed!