If you are interested in buying or selling cryptocurrency, one of the first pieces of advice you will receive is that you need to find an exchange. Making the wrong choice can lead you down a path full of frustration, distractions, and wasted time and effort. To ensure you choose the right exchange, you need to outline your objectives. If you want to invest long term, you might need an exchange that offers different features than if you were looking to buy and sell regularly. After you have determined your objectives and the type of exchange that would work best for you, here are some areas to look into when choosing the exchange.
Security
Before you start buying and selling cryptocurrency, you need to ensure the exchange is secure enough. Each exchange offers different types and levels of security. At a minimum, the exchange should offer two-factor or multi-factor authentication.
It is also a good idea to check if their two-factor options are compatible with what you already use. Google authenticator, Yubikey, and Authy are very common as they offer better security than text-based two-factor authentication and you likely use one of them already.
Reputation
Cryptocurrency exchanging is still a young industry so it is always a good idea to research the reputation of any exchanges you are interested in. Some exchanges have been involved in hacks, scams, and fraud and you would do better to stay away from them.
A good way to check their reputation is by entering their name on a search engine followed by the word “scam”. This will yield results you can use to gauge an exchange’s reputation.
Lastly, try to find out which exchanges the cryptocurrency community uses. Exchanges such as Coinbase Canada are likely to come up because they are one of the biggest global exchanges offering some of the best security the industry has to offer. When doing this, social media will come in handy, too.
Volume
Trading volume is a very important metric, especially for people who would like to buy and sell large volumes. Trading volumes depend on the number of people who trade a platform at a time and determines how easy it is for you to find someone willing to buy or sell the amount of Bitcoin you have.
High trading volumes also increase the chances of finding sellers and buyers willing to sell and buy at the market price. If the trading volume is too low, you might be forced to buy at a higher price or sell at a lower price because there are too few people trading at a time.
Asset choices
Most cryptocurrency exchanges will have common cryptocurrencies such as Bitcoin, Litecoin, and Ethereum. However, if you are interested in smaller coins, tokens, and currencies, you might have to choose another exchange. So, before choosing an exchange, ensure it has the assets you would like to buy and sell.
At the heart of finding the best cryptocurrency exchange lies good research and patience. Good research ensures you can find the exchanges that offer the best price, have the right trade volume, are secure, and have a good reputation. Patience ensures you do not choose an exchange on a whim only to realize later that it does not offer exactly what you were looking for.
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