Cryptocurrencies are booming worldwide. Driven by huge media frenzy and fresh attention from celebrities and influencers, 2021 has seen an explosion in the number of people willing to learn about investing in cryptocurrencies.
If you’ve been swept up in the crypto fever, there’s a few decisions you need to make before you decide what coin to buy. Key amongst them is selecting a cryptocurrency exchange for your investment journey. A cryptocurrency exchange allows users to buy, sell and trade crypto coins, providing an easy way to manage your crypto portfolio. But with so many out there, how do you decide which one to use? We’re here to answer just that! Read on and learn the five most important factors to consider when choosing a crypto exchange.
The Selection Of Currencies
Crypto is all about freedom and choice. With thousands of coins in circulation, it’s understandable that investors would want to have the broadest selection available to them. Keep this in mind when doing your research as not all exchanges provide the same number of cryptocurrencies that you can buy or sell. Some exchanges list more coins than others, while a few exchanges only deal in a selected set of coins.
The very best crypto exchanges – CoinSpot among them – put security first. Security is the most important factor to look for in any cryptocurrency exchange. Due to crypto’s unregulated and decentralised nature, there is no authority to appeal to in the event of theft, meaning it’s on users to keep their portfolios safe. As such, look for an exchange with a sterling security record, free from breaches and thefts that uses industry-standard encryption technology. Additional points to look for are the option of two-factor-authentication on accounts and independent certification to external security standards.
Although you might have heard that sending and receiving cryptocurrencies is cheaper than banks, rarely are these transactions free. Different crypto exchanges charge different fees for transactions using different types of coins, with factors such as trade volume and individual trade size dictating the final payable transaction fee. Read up on the exchange’s fee policy before you commit.
While cryptocurrencies are gaining in popularity, many governments have taken a dim view of them, instead choosing to ban their exchange and possession. As such, some countries are banned from trading cryptocurrencies and may be barred from accessing a digital exchange. Rules vary depending on jurisdiction, so ensure that you’re up to date on the regulations in your state or country before beginning your crypto journey.
Availability Of The Wallet
Your cryptocurrency wallet is as essential as your physical wallet, providing a secure and accessible place to store cryptocurrencies. Crucially, some exchanges offer an online wallet service, while others function as pure trading posts, only offering the ability to buy and sell and requiring users hold their cryptocurrencies privately. Your preference will depend on your level of crypto knowledge, how comfortable you are storing your coins at the exchange, and your ability to self-manage a wallet.