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How To Choose The Best Cryptocurrency Exchange

The past few months have proven to be the worst for anyone dealing with cryptocurrency, particularly Bitcoin. This digital currency has seen its value crash by more than half from USD $65,000 (a peak that was set in April). Nevertheless, Bitcoin is still in a better position than it was a few years ago. 

As if that’s not good enough, crypto experts are predicting that the Bitcoin price will regain its momentum before the end of 2021, when it’s expected to be around $66,000. In addition, experts suggest that Bitcoin will be the main form of global finance by 2050, overtaking the US dollar, which is the current holder. (1)

With all these positive reports surrounding crypto, you might be convinced to invest your money in the market. But how and where should you start your journey? The most popular method of making money in the world of cryptocurrency is trading. 

how to choose the best cryptocurrency exchange

However, you’ll need to find the best exchanges where you’ll be able to buy and sell digital coins. This post discusses tips to help you choose the right crypto exchange for your investment. Read on to learn more!

What are cryptocurrency exchanges?

Before going into the nitty-gritty of crypto, it’d be prudent to note what cryptocurrency exchanges are. As the name suggests, these are platforms where you exchange flat currencies like USD with digital currencies such as Bitcoin and Ethereum. (2)

Since there are many such platforms in the current market, finding the right one could be difficult. Some exchanges might currently be locked to a single region, while others might need you to buy a minimum crypto amount. To help you find the right exchange, you should research on the best ones in Australia from bestcryptoexchangeaustralia.com.au before embarking on your investment journey.

Even with a detailed list of the best exchanges, it might still be quite difficult to decide on the best one. 

Here are some of the tips and tricks you should consider in the process:

Security is paramount

The very first thing you should consider when choosing a crypto exchange is its level of security and authenticity. Obviously, if the system has few security protocols, you risk losing your funds to hackers or any person with ill intentions. It’s worth noting that there are very many traders who’ve lost billions of funds to scammers. In fact, that’s one of the reasons why some people are still skeptical about this form of investment.

So how can you confirm that a crypto exchange has the right security protocols? One of the most important security features an exchange must have is two-factor authentication. This mode of authentication ensures you’re the only one who has access to your crypto exchange account and notifies you whenever somebody else tries to access it.

Also, checking whether the exchange’s website uses HTTP or HTTPS protocol can go a long way in protecting your investment. While they both work the same, HTTPS uses complex encryption methods to encrypt normal HTTP requests. As such, HTTPS offers more security to your data than its counterpart.

What about your compensation in case of a breach? A good crypto exchange should have some form of cryptocurrency insurance, which ensures that the users are compensated for their lost funds. Insurance can either be through an external insurance company or an internal arrangement. 

Transparency is key

Most crypto exchanges prefer holding all cryptocurrency tokens offline to avoid being hacked. This is, by far, the best security measure in the current crypto industry because hackers can only access exchanges connected to the internet. However, some companies take advantage of this technology to scam users. (2)

Therefore, you should choose a crypto exchange that’s as transparent as possible. For instance, they should be ready to provide addresses of its cold storage. On the same breath, they should also be willing to submit any relevant audit information regarding verification of the currency reserves.

How long before you receive your Bitcoin?

Depending on the crypto exchange and the size of your transaction, the process of transferring Bitcoin—or any other digital currency, for that matter—can take anywhere between a few minutes to several days. Therefore, it’s important that you confirm the average confirmation time and see if it fits your needs.

Longer or shorter delays don’t necessarily determine how good the exchange is, provided these are communicated early enough. However, you should check if the company offers locked-in pricing. In other words, will you be charged the same price at which you bought the crypto before the delays? Other companies charge the market price at the time of delivery, which can mean paying more for the user.

Method of purchase

There are many methods of purchasing some of the best cryptocurrencies. However, not all of them are ideal for you, especially if your country has a lot of financial restrictions. Some popular modes of payment include PayPal, direct bank transfer, credit, and debit cards.

Before you go about checking which methods are offered by every crypto exchange, it’d be wise to first confirm the ones accepted in your country. After that, you can now compare with every exchange. It’s recommended that you choose one that gives you at least two options. As such, you won’t face delays when one payment method experiences downtime.

User experience

Confirming that a crypto exchange fits the bill by looking at user manuals and reports is one thing, but going through the feedback of previous customers is what will give you a clearer picture. User experience is one crucial factor, and you might not be able to rate it by just reading through the exchange’s FAQs. Find what other users are saying about this exchange and see if there’s anything to worry about. 

Still on user experience, browse through the portal to have a feel of the user interface. Is the UI intuitive enough? Does it lag when using? How fast do the pages load? You should also note the whether the design feels comfortable and easy to learn. Of course, this is quite subjective, and whatever somebody else doesn’t love might be your ideal feature.

how to choose the best cryptocurrency exchange

Conclusion

Cryptocurrency continues to grow in popularity, thanks to the ever-soaring value of various coins. Similarly, the number of crypto exchanges has rapidly increased in recent years because more people are looking to join the crypto market. As an investor, you might find it challenging to choose the best exchange.

To avoid falling into the traps of scam platforms, you should confirm an exchange’s security and transparency before opening an account with them. Other important factors to keep in mind include user experience, method of purchase, and the time taken to complete a transaction. With all these at the back of your mind, you can never go wrong when choosing a crypto exchange.