There are many trading platforms out there to choose from when starting off in crypto trading. We know how important a good trading platform can be to your overall crypto investment goals. So we decided to make a list of 8 most important things you must look out for, before deciding to deposit your money on any crypto platform for the purpose of trading.
Always remember that there are scam exchanges out they, sponsored by bad players to rip people like you off their hard earned money. Always be careful when dealing with strangers online and never trust anyone with your sensitive trading information. Having said, here are the 8 tips.
1. Is it trustworthy? This is the most important aspect to look out for before depositing your money on any crypto exchange. To do this, you will have to visit popular crypto forums on the internet like bitcointalk, Reddit or Quora to gather feedback about the exchange from community users who have used the platform in the past. The goal is to gather useful information from people’s experiences and possibly take advantage of it. You can also try googling the exchange to read or view reviews about the exchange from trusted sources. When looking for reviews make sure to only use trusted sources.
2. Is it secure? always be mindful of the level of security such as 2FA and other security features available on the exchange. Protecting your funds against loss and keeping it away from hackers is much more important than the momentary gain you wish to make on the exchange. The more stringent the security feature available on the exchange, the better.
3. Does the exchange have reasonable daily transaction volume: Visit coinmarketcap and check the transaction volume on the exchange. Higher transaction volume means a higher number of transactions on the platform. Higher volume also indicates that the crypto community has greater trust on the platform. Never you trade on a low volume exchange because not only that low volume indicates low trust rating but also, low volume means that the market can easily be manipulated by the whales. Know it that, there are many fraudulent bitcoin exchanges out there and their first way to identify one is low transaction volume. Exchanges trading less than 1mn USD daily is a no go area for me.
4. Does the exchange have your favorite altcoin? : Which cryptocurrency does the exchange support? You will want to make sure that your favorite altcoin is being traded on the market where you are signing up.
5. What payment options do they accept? This is partly for convenience and partly for assessing the credibility of the exchange. Few exchanges have started using credit/debit cards, and PayPal among other ways. Choose an exchange that has payment methods most suitable for you.
5. What are their fees structure? Generally, crypto exchanges charge a certain percentage of fees based on volume of transactions. Some exchanges charge seperate withdrawal fees other than the transaction fees from coin’s blockchain. Make sure you do your research and understand the fee structure of the exchange you plan to sign up with before depositing your funds on the exchange.
6. How long is their processing time? The time taken for processing the various tasks is something you should consider when selecting an exchange. They could take time for account verification, deposit, and withdrawal. Exchanges that follow strict operational procedures might have slightly higher processing delay.
7. What are their verification and validation processes? It is very important for you to always read and understand the verification processes that are required by the exchange and ensure you have all the requirements before signing up on the platform. Make sure you submit all the verification requirements and wait for your account to be verified before funding your account on the exchange. Sometimes it may not be possible to withdraw your cash immediately with some exchanges without verification. Meanwhile, there are a couple of other trading platforms that do not require lengthy verification procedures.
8. Where is the exchange located? Many exchanges allow you to trade globally. However, different countries have different laws regarding digital currencies. For this reason, it is best to choose an exchange from your country or from a jurisdiction where cryptocurrency is more generally accepted.
Israel Martins is a cryptocurrency researcher and trader since 2016, passionate about blockchain and other emerging technologies.