Saturday, February 29, 2020

How To Pick A Cryptocurrency Exchange

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If you are a cryptocurrency veteran or a newbie ready to dip into investing, you need to pick a trading platform that is right for you.

But with a huge number of exchanges worldwide vying for your custom, how do you know which one to pick?

The first decision is probably selecting more than one exchange so all your crypto eggs are not in the same basket in case of a security breach allowing hackers to scoop your investments up or the exchange going bust.

Don’t forget most exchanges are not in official financial protection schemes if investments go wrong and if you have too much cash at risk should the worst happen, you are unlikely to see the money again.

That said, the next step is drawing up a shortlist of suitable exchanges.

Points to consider

Look for good reviews from other users, transparent ownership and the country where they are based. Exchanges in countries like the US, UK and the European Union are expected to adhere to strict money laundering and know your customer (KYC) rules.

Although this is only semi-regulation, qualifying exchanges must have a degree of reliability and professionalism to trade under these regimes.

Consider the cryptocurrencies available for trading. Most exchanges have their own list and none offer all the coins on the market.

It should go without saying the exchange should accept the fiat currency you want to convert into cryptocurrency for trading.

Don’t forget to compare fees – minimum account balances, trading fees, exchange rates and the like.

Coinbase and Kraken

Most exchanges offer investment information, but traders should take this with a pinch of salt however well-meaning, as the writers are unlikely to discuss better investments on rival exchanges.

The US exchanges Coinbase and Kraken are considered the two largest and most secure online platforms.

That does not mean they won’t be hacked, they just have the best security and it hasn’t happened yet.

Coinbase trades in more than 30 countries and offers Coinbase Pro – a souped up service for professional traders.

Gemini is also popular as the exchange founded by the Winklevoss twins, who famously won a huge court settlement from Mark Zuckerberg in a row over who really came up with the idea for Facebook.

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