When it comes to trading cryptocurrency, it can be a minefield for a beginner. Any trading method can present difficulties for a newcomer, but the dangers are far more apparent due to the volatility of digital assets. However, by performing due diligence and ensuring you understand the asset, you can start off on a good path to trading intuitively.
This isn’t us being negative about cryptocurrency. There are plenty of examples of digital assets making some serious profit for early investors. Cryptocurrency prices have exploded since the creation of Bitcoin in 2008 by Satoshi Nakamoto. It is always best to learn the basics of any investment field before investing your hard-earned money into it.
Cryptocurrency exchanges have sprung up over the last few years. This is due to the enormous profits in the digital asset market. Exchanges have begun to move into the space in a bid to make money. However, it is important that you select a top exchange that has a good reputation.
This is the key, and it’s not that easy to decipher which exchange is best due to the multitude that you can choose from online.
Choose a reputable provider
Firstly, to ensure a particular crypto exchange is the right one for you, find an exchange with a visible CEO, with a proven track record and reputation in the industry. Only a handful meet these criteria, and it depends entirely on what you’re looking to trade. You may prefer one exchange over the other, so it is always wise to keep your options open.
Currently, the topic of cryptocurrency exchanges is rather hot. A reputable provider will have good reviews online and no issues with customer service or response times. This can include email, live chat, or social media responses.
This doesn’t mean that they don’t all have customer service options – it’s just that the lack of effective assistance can be telling about how their overall business structure operates.
These aren’t the only two variables to look out for, either. You can usually measure the quality of a provider by speaking to other traders in the industry. Suppose you have established a network of cryptocurrency traders, either online or in person – in that case, they will usually be able to tell you about the best exchange from their own personal experience.
Do they offer a wide choice?
When exploring what exchange to use, you can look at what markets they offer. However, be wary that some exchanges may have a lot of different coins with no utility. If you find an exchange that doesn’t have plenty of the top 10 via market cap available but has a host of meme coins you haven’t heard of, this could be the sign of a “Wild West” exchange with low liquidity.
This means that even if you buy and sell a token on their website, you might be unable to execute your trade at an advantageous price because the centralized currency that pairs with the token isn’t available. The exchange you want to use must support big players in the industry, such as Bitcoin and Ethereum. If you can check the price of other smaller altcoins, such as the Luna price or the Smooth Love price, this would be the sign of an exchange with a strong marketplace that covers all the angles.
Before you decide to invest in a digital asset, make sure you investigate all of the above. Also, make sure that the exchange gives you high levels of accessibility. Cryptocurrency markets are open 24/7, unlike stock markets, which operate only during business hours. Therefore, you must to be able to access the exchange whenever you wish, with no issues. This applies to PC or laptop trading or using a mobile device to invest in your chosen asset.
With the number of cryptocurrencies and cryptocurrency exchanges on the internet, we can appreciate that it is difficult to settle on a provider, hoping they will provide you with the service you expect. The cryptocurrency space is still new, and legislation and regulation are playing catch-up. Unfortunately, this means that some exchanges and cryptocurrencies are not operating in good faith. This could mean your capital is at risk when investing in that specific asset or the exchange itself, so you must be vigilant and do the required research.
It is advisable to heed all of our advice above, invest with caution, and do not attempt to overleverage your position by investing money you cannot afford to lose.