Bitcoin was the first successful cryptocurrency in the world. The ability to secure itself, offer cheaper and faster methods of transmitting value around the world, and being independent of intermediaries had made it famous.
Before Ethereum, there were only a handful of cryptos, but its launch changed the crypto landscape forever. Offering the opportunity to create their own cryptocurrencies, it led to a population explosion. In a span of a few months, there were hundreds of cryptocurrencies and tokens. Today, the number is in the thousands.
Rise of Cryptocurrency Exchanges
With such a large number of cryptocurrencies, problems arose. If two people wanted to do business or transmit money, they both needed to be on the same page, i.e. the sender and the receiver have to be able to send and accept the same token. Secondly, the vast number of digital tokens, each with its varying value and economics meant they could rise and fall in value, giving people the opportunity to buy and sell them like any other traditional asset and make money off profits.
Cryptocurrency exchanges like Binance and Coinbase were a natural need. Users of these platforms now had the ability to trade in one cryptocurrency for another. This has helped hundreds of thousands of people all over the world. A person who was not ready to accept particular crypto could now do so and use a crypto exchange to trade in for his or her preferred one. Similarly, the sender could always use the exchange to buy the cryptocurrency the sender accepted.
And then let’s not forget the trading for profit. Like any other class of assets, cryptocurrencies have variable values. Traders can use the crypto exchanges to buy a cryptocurrency they believe is rising in value and then, later on, sell it for a profit. In the reverse move, a trader can sell off their cryptocurrency against another or a stable coin if they have sufficient data to back their theory of the value falling. In this way, they can mitigate their losses.
Which Crypto Exchange to Use?
The vast number of tokens and the naturally volatile nature of cryptocurrencies has led to many people using cryptocurrency exchanges and today. There are a number of these trading platforms around the world, each offering different trading pairs and services, from the simple peer to peer exchanges to complex, professional ones which offer leveraged crypto products such as perpetual, futures, and others.
With this much information overload, people find it increasingly difficult to make a choice. They have no idea which crypto exchange will actually serve their particular needs. Questions such as is the cryptocurrency supported through trading pairs; what is the security level of the platform; is it difficult to withdraw my assets; and what are the fee and charges involved arise. To find their answers, people have no option but to scour the internet, catching up with other people in different forums, and asking about their experiences.
What to Look for in a Good Exchange
Since there are so many crypto exchanges, you first must need to define what your exact requirements are. Doing your homework will help in cutting down the search almost by half. We advise that you list down your requirements in systematic order:
- Supported cryptocurrencies.
- Relative trading pairs.
- Order types (market, limit, OCO, Iceberg etc.).
- User interface.
- Legality such as AML/KYC checks and geopolitical limitations.
- Fiat or bank support.
- Trading and withdrawal/deposit fee.
The next thing would be to go online and search around for exchanges that fit your need. BitMEX, for example, offers very limited pairs but allows for extreme profitability chances through leverages of up to 100x. Of course, that also means the risk of losing all of the invested amounts is higher.
At the other end of the spectrum, there is a simple peer to peer exchanges that allow users to swap their assets for very limited cryptos, often not more than 5 or 10, and carry no specific trading pairs. These exchanges have a higher trading fee but due to their simplicity and ease of use, are very popular among people.
In short, it all boils down to what you as a trader, actually want. To help you get started on what exchange you want to sign up on, we suggest you check out the hedgewithcrypto.com and Revain that can help you by showcasing reviews and opinions on these platforms.
Hedgewithcrypto is an online platform that has been created specifically to help newcomers in the cryptocurrency field. It describes itself through its mission to make cryptocurrency easy for everybody. The team behind the platform intends to make people of all ages and locations more aware and educated on cryptos and how to use them.
Revain is also a review platform that has a dedicated cryptocurrency exchange section. It uses AI to filter out fake and low-quality reviews by its users and even allows the trading platforms to register on its website so that they can also comment on any false review against them.
We suggest you check out hedgewithcrypto.com and Revain to have better insight for your cryptocurrency exchanges and crypto trading needs.