Cryptocurrency has remained a hot topic among investors since 2013. During 2013, 1 Bitcoin was worth around $20, and now, in 2021, the worth of 1 Bitcoin has soared up to $50,000. Cryptocurrencies are speculative investments that can create billionaires. At the same time, some people have lost assets by even forgetting their passwords to the crypto trading platform.
At the end of the day, it all boils down to the features of the crypto exchange that you use. By reading exchange reviews and understanding the evaluation criteria, you will be able to take suitable precautions while looking for the best crypto exchange.
Here is a rundown of some of the essential precautions you must take when choosing a crypto trading platform.
Learn About the Regulation Authority
Firstly, just like all other services that involve financial transactions, privacy and security are the essential preventive measures that you must keep in mind. The majority of the leading crypto exchange platforms include KYC procedures. In this procedure, a user must verify his/her identity before making a transaction.
Some platforms also allow users to stay anonymous while buying cryptocurrencies. Your first concern while looking for a crypto exchange should be the reliability, security, and regulatory features of the exchange platform.
You must learn about different regulation authorities like Australian Securities and Investments Commission (ASIC) in Australia, Financial Conduct Authority in the UK, or Financial Crimes Enforcement Network in the US.
Keep an Eye on the Transaction Volume
When it comes to crypto exchange, choosing a platform with a reliable transaction volume is another precautionary measure you must take. Volume is an essential metric that helps determine an exchange platform’s reliability.
Make sure to choose a platform with a transaction volume of more than one billion dollars in the last 24 hours for a trouble-free purchase process. Such providers generally are professionals in handling finance, and they tend to be well regulated, thanks to the large amounts of money they operate on a day-to-day basis.
You can determine how good a platform is faring based on the transaction volume by reading exchange reviews related to cryptocurrencies.
Be Cautious About Commission Rates
Every crypto exchange platform differs when it comes to withdrawal and deposit options. Each exchange has its own agreements with different payment providers.
Hence, depending on the crypto exchange and the payment method you choose within the platform, the commission rates may vary. Don’t blindly choose a platform without learning about the features of its payment portals.
Have a Good Knowledge of the KYC Process
Verification is a crucial step when you are opening an account in a crypto exchange platform. While looking for the best crypto exchange, be precautious about the platform’s verification features. Some providers may include verification steps where you may need to submit different documents to support and verify your identity.
It may take even up to a week or two for some platforms to complete the verification process. But, for a few other crypto exchanges, a selfie and the first page of your passport will be sufficient enough to run the operation. Such processes will usually be completed within a matter of a few seconds.
Be Mindful About Altcoins
Bitcoin has grown to be one of the most valuable cryptocurrencies in the world today. However, besides bitcoins, there are also many other altcoins or alternatives being purchased by many. Etherium, Litecoin, Ripple, Cardano are some of the popular altcoins traded by people across the world.
Therefore, while choosing a crypto exchange platform, you must first establish which currencies you will trade at the moment and which alternatives you will be interested in, in the future. This is because not all crypto exchange platforms support altcoins. So, make a list of your interests and check if the platform offers the service by reading exchange reviews.
Don’t Forget About the Available Fiats
Another significant concern that you must not fail to address while looking for crypto exchange is the available fiats. Even though most crypto exchanges accept deposits made with EUR, USD, and GBP, if you plan to pay the exchange with your local currency, you must choose a platform that offers a wide range of deposit options.
If you sign up on a platform without checking the available fiats, there are chances that a particular platform may not support the currency that you have in mind.
With the demand for cryptocurrencies getting higher, there is also an increase in the crypto trading platforms. However, not all platforms are legit and reliable. Make sure to read reviews and follow these precautions to find the best crypto exchange with features that will meet your needs.