How to choose a crypto exchange? | Tips from union experts

When choosing the best exchange for crypto, factors such as cost, security, trading volume, instructional materials should be considered, as well as whether an exchange lists the cryptocurrencies you are interested in buying. In this article, Traders Union experts offer traders some tips on what to look for while choosing the crypto exchange to work with.

Safety

With the growing use of crypto and its price rise, it has become an increasingly desirable target for cybercriminals. Losses totaling tens of millions of dollars have been incurred as a result of hacker attacks on prominent cryptocurrency exchanges such as Binance and Phemex.

Although cryptocurrency exchanges often compensate customers for the stolen assets, no one wants to find themselves in that position in the first place. By buying cryptocurrency from different exchanges, you can lower the overall level of risk you are exposed to.

Alternatively, you can make it a routine to move your cryptocurrency holdings out of the wallet offered by the exchange and into your own personal cold wallet. A cold wallet is a storage solution without a connection to the internet, which makes it almost impossible to hack them. However, you must remember your password to avoid permanently losing access to your cryptocurrency.

Available coins

Pay close attention to the various cryptocurrencies that can be bought on the exchange. It is possible that using a cryptocurrency exchange that only trades a few coins will not cause any problems at all. On the other hand, if you are a crypto enthusiast, you might want to have access to all 600+ cryptocurrencies. There are many exchanges that offer a variety of coins, such as Bybit. You can find the list of coins on any Bybit exchange review.

Trading volume

Although coins are readily available, it is not enough when no transactions take place. Ideally, you should check that there is enough trading volume in your target coins to guarantee that there is sufficient liquidity, allowing you to easily exchange coins and dollars. You can lose money on sales if you focus on low volume markets. Slippage is the term used to describe a situation where there is low volume, but you still place an order. You risk buying an item at a price that is higher than you want or selling an asset at a price that is lower than you want. If you are an experienced crypto trader, you should check that the exchange you choose has features such as limit orders, which can minimize slippage by setting a fixed price, as well as the margin you need. Keep in mind that trade types are still evolving in the US, so different exchanges’ offerings may vary over time.

Educational Resources

If you are just getting started with cryptocurrencies, you should look for a platform that is user-friendly and offers a wide variety of instructional tools to help you understand this complicated and rapidly evolving sector.

availability

Finally, just because you have access to an exchange’s website does not mean it is operational in your state or country. You should not make this assumption. Many state and federal governments are still thinking about exactly how they want to treat cryptocurrencies from a legal and tax standpoint.

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