Everyone seems to talk about cryptocurrency nowadays. We all want to buy it, trade it, and make big money off it. But how do you actually do this?
You need a crypto exchange to buy and sell the digital currency to get in on the cryptocurrency boom. Digital currency differs from regular currency and is known by different names with different price points and rates. This digital currency is Ethereum, Dogecoin, Bitcoin, and more.
Since the crypto market is deregulated, and the systems and formation of newer exchanges can be confusing, there are several ways to find the best crypto exchange. When choosing a crypto exchange, you should never forget to read everything carefully before investing money. Some of the different types of crypto exchanges are Binance, CoinEgg, Kraken, Gemini, and more.
As the crypto world keeps evolving, it is necessary to stay updated at all times. The FTX vs Binance news was quite large and made a few ripples in the exchange market. We are here to help you navigate through the snafus and understand cryptocurrency exchanges better.
What Are Crypto Exchanges?
Crypto exchanges are marketplaces where you can buy and sell cryptocurrencies. You can use crypto exchanges to trade or convert cryptocurrencies from one type to another – like Dogecoin to Bitcoin or Litecoin and so on. You can also use crypto exchanges to purchase cryptocurrency with an everyday currency like dollars and pounds.
The crypto exchanges reflect the latest market prices of the cryptocurrencies that are on offer. With the help of exchanges, you can also convert cryptocurrency back to regular money (either in your original currency or a currency of your choice). You can also withdraw the sum directly to your bank account.
When you consider a crypto exchange, you should always find one that aligns with your personal financial goals and strategies. Your crypto exchange goals should answer the fundamental basics of why you want to trade in cryptocurrency. Some exchanges help you learn the market, some offer more variety in cryptocurrencies, and some are meant for quick trade-offs.
How To Find A Crypto Exchange That Suits Your Needs?
There is no one-size-fits-all for crypto exchanges. Many people trade on several exchanges and make a selection based on which is best suited to them. However, when you’re selecting one to start with, there are a few things you should know in advance.
Accessibility:
Depending on your geographical location, you may be restricted in your ability to trade on all exchanges. You may also face national regulations that prevent you from buying and selling on foreign exchanges in some countries. For example, China has banned its financial institutions from providing any services related to crypto trading and cryptocurrency transactions. In the United States, the regulatory uncertainty has resulted in some states instituting their own regulations.
New York requires all crypto exchanges to obtain a BitLicense to operate within state limits and only licensed companies to offer a select few pre-approved coins. When researching an exchange, it is best to log on to the official site and read about the limitations, accessibility-related factors, and pre-existing conditions to trade. It is also good to check the national currency list (of accepted legal tender) and check the terms of service, exchange rates, payout options, and more.
Fees:
Some crypto exchanges have higher fees than average. However, you should not let this part deter you from your investment goals. The easier the process of buying the cryptocurrency, the higher the fees behind the exchange. Higher fees could also mean additional insurance and protections that well-established crypto exchanges provide. Moreover, you can save from the fees when you use codes for these platforms like Voyager promo code to save time and money.
Usually, the fees are fixed, but they could also be a percentage of the total trade. The costs could also change according to the strength of the currency you trade. They could also be charged per transaction or on price volatility.
Security:
To protect the currency, crypto exchanges have insurance against hacking and fraud. Crypto exchange giant Coinbase has insurance coverage of $255 million. The insurance also helps protect user accounts. When finalizing a crypto exchange, you should pay attention to the security of the currency. You can also check the asset value of the crypto exchange offline. Try to use a crypto exchange that keeps its asset offline and not online, making it harder for hackers to reach and access.
Final Words
There are other forms of security like two-step authentications, OTPs, codes, and more that can add extra layers of protection to the cryptocurrency.
There are several more factors like liquidity, taxes, and more. It is best to research the crypto exchanges in detail before finalizing one. Always remember, if you’re starting off for the first time, take it slow and build gradually. Eventually, you will find the crypto exchange that best suits your individual needs.
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