Trading crypto is all the rage nowadays. While there’s still a significant amount of naysayers going around, professing that digital money is a fundamentally flawed asset that causes investors to lose more than they’ll ever be eligible to gain. And while nobody can deny that there is a certain degree of risk associated with trading cryptocurrencies, the same can be said about more traditional investments as well, such as those in stocks or bonds. If you decide to get involved in trading, you must become comfortable with a certain degree of risk. After all, some of the most successful endeavors out there can spring up on you utterly unannounced from an undertaking that didn’t seem like all that much in the beginning.
Despite concerns, an ever-increasing number of people are gravitating towards crypto, lured in by its many benefits. First of all, crypto can act as a good store of value. While its frequent fluctuations are enough to put many prospective traders off giving it a try, its enduring popularity means that digital money only grows in value over time. As such, it isn’t only a great way to diversify your portfolio, but it also holds the potential to help you amass wealth over a period of time if you manage your funds correctly.
However, one of the most important things when you trade crypto, is to find a reliable exchange to support your transactions. If you make the right choice from the very beginning, you’ll have an easier time entering the crypto world and forging an enduring career for yourself in the field. But what are some of the aspects you should keep in mind before determining which option works best for you?
Check the offer
Crypto’s rise to stardom has also meant an increasing number of exchanges you can choose from. However, with a wide variety of options at your disposal also comes a fundamental dilemma: how can you know you’re making the right choice? If you’re taking your first steps in the crypto world, it’s understandable that you wouldn’t want to make a choice only to realize it’s been the wrong one shortly after. Without prior experience, however, you don’t have a gut feeling to go by when making a choice.
One of the essential giveaway markers is the number of coins you can trade on the platform. Currently, there are roughly 10,000 different cryptocurrencies out there. You need to decide which ones you want to add to your assets and make sure they’re available on the trending exchange you choose. As a general rule, larger, well-known exchanges offer the widest varieties of coins, tokens, and other blockchain-driven assets. They are also adaptable and can be used by both beginners and those with a little more experience.
A word of warning, you should also check the security of the exchange you choose. Some don’t offer the adequate amount of investor regulations that makes trading a safe experience. You don’t want to lose your funds while trading in crypto, as what is lost typically remains that way.
Check the fees
When you start trading, one of the first things you’ll do is research the coins themselves and decide which one works best for you. For example, you might decide Ethereum is the best option for you, as the coin is a well-established name on the market and, therefore, less volatile than those newer. Nevertheless, you still have to check the Ethereum price before any ETH transaction you carry out. This is so you can avoid potential losses when you buy and sell, as the prices can and do fluctuate.
Apart from this aspect, however, you will also have to pay an additional exchange fee any time you make a deposit, trade or withdrawal. There’s no fixed amount that you can expect to pay depending on the platform you choose. In fact, all of them require a variety of tariffs depending on the type of transaction and your payment method of choice. Based on your total trading volume over a 30-day period, fee tiers decrease as the size of your investment increases. For example, Binance, one of the top crypto exchanges in the world, has fees ranging between 0.1% and 5%, depending on the type of payment you choose.
One of the main reasons a lot of people are still on the fence about becoming traders is that crypto is one of the favorite places for hackers to strike. It’s not surprising, considering that digital money is solely tech-powered, and theft can usually not be traced back to the perpetrator. The nature of blockchain processes makes it so that all transactions are typically final, so once you lose your funds, there’s a very slim chance of ever getting them back.
For this reason, many exchanges now carry commercial crime insurance. It covers theft, robbery, cyber fraud and acts of dishonesty generally, but it’s always important to check because the offer is likely to be different depending on the exchange. You should also make sure you have sufficient protection for your cash. As you move in and out of crypto markets, you also need to keep some fiat currency deposits at hand. Exchanges must ensure this money is kept safe in the event of potential bank failure. While plenty of exchanges offer this protection, many don’t so check in the user agreement section or the FAQ to make sure the one you pick does.
The bottom line
Trading in crypto offers many advantages. It’s clearly a technologically-driven process, and its popularity is only ever-increasing. Cyber money is definitely not going away anytime soon, and it’s actually more likely than not to be used on a broader scale as time passes. Its growing popularity makes traders feel confident that it isn’t a holding that’s just going to melt in a recession someday. It can also act as a secure asset against inflation, which is particularly valuable in nowadays’ context, in which the financial world navigates a bear market episode.
But one of the most important things to help you guarantee you’re getting all of the benefits is to make the right choice in picking an exchange. If that’s out of the way, you’ve already cleared the path to success halfway through.