How to Choose a Bitcoin Exchange: 4 Tips

Bitcoin is reaching new highs. Since October 2020, its price has already quadrupled. Other coins like Dogecoin are also growing fast. Unsurprisingly, trading is now a hot topic these days. You can make a profit by buying and selling crypto coins at the same time. However, any strategy is useless on a fraudulent platform. These tips will help you pick a reliable company. 

 

Security And Status

Security is crucial for all financial transactions, but cryptocoins are particularly vulnerable. The first exchanges in the early 2010s were often targeted by cybercriminals and associated with online fraud. Fortunately, the biggest systems of today like Coinbase use top-notch security measures. 

Caution is paramount. Research before creating a wallet. What is the legal status of the system? When was it established? What is the feedback from users like? For example, Coinmama is a reputable platform with decent support. Kraken has a US bank license, etc. 

 

Learn About the Fees

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How much will each operation cost you? Fees vary between systems. High charges will eat into your profits, so choose optimal transaction costs. Typically, platforms with tokens have more favorable conditions. There are fewer fees. If you need to compare two systems of this kind, select the one with more tokens. 

 

Choose the Right Type

A Bitcoin exchange may be classified as a broker, p2p exchange, or trading platform. A broker is similar to an intermediary in Forex: it defines the rates for buying and selling. P2P platforms connect the counterparties and allow them to perform transactions on their own. All interactions are direct, but such systems must be secure. 

Finally, trading platforms are the most popular. As the term suggests, they are most suitable for frequent buying and selling action. The buyers and sellers do not interact with one another. Instead, they connect to the same platform which charges a transaction fee after an established match. 

 

Purchase Methods

Not every platform allows you to use your debit or credit card. Some systems only work with PayPal, others accept bank wires. Choose the most convenient environment and find out about any fees. Processing times also vary. Instant processing is obviously the best. 

 

Final Words

The costs, security, and payments are all important. Beginners should also opt for systems with a clear layout and navigation. User experience and functionality matter — all the necessary buttons must be easy to find. Ideally, this system will also have rising transaction volumes. 

Overall, weigh up all pros and cons before settling on a system. In things like crypto trading, caution is paramount. Like any investment decision, it involves specific risks. A diversified portfolio can protect you against volatility, but it will still be useless if the exchange itself is not safe.

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