How to choose a crypto exchange for trading and investing?

Even if you are not a professional trader, it is good to understand the basics of the crypto market, including site selection and risks involved.

On cryptocurrency exchanges you can earn much more than on the stock or currency market. However, the risk of losing invested money is also greater. It is not difficult to find a crypto exchange list; just follow the link.

Decide on your goals

What do you want to do on the stock exchange – trade or invest? Crypto exchanges are divided into centralized and decentralized.

The centralized exchange acts as an Internet service and controls the personal accounts of all users; there is often a requirement for identity verification. Centralized exchanges have obligations to traders and investors to pay out profits on transactions with a trading deposit (a trading deposit is a certain amount of money that a trader deposits into his own trading account), but exchanges also charge commissions for transactions.

Decentralized exchanges are technical platforms that work on the blockchain. They only allow direct transactions between participants. At the same time, your personal data and assets are not stored anywhere and are not linked to anything – some of the most popular in the crypto world: Uniswap, PancakeSwap and Compound.

On decentralized crypto exchanges there is no controlling and verifying body in the form of an administration. And here there is a higher risk of encountering fraudsters: buy a fake smart contract – even bitcoin is fake (a smart contract is a computer protocol that allows you to perform transactions and controls their execution using mathematical algorithms), or invest in a dubious coin, which may be behind the project -dummy. In both cases, the investor loses money and “empties” the trading deposit.

But here you can also find a new interesting crypto-asset, which after a while can take off and be recognized by centralized platforms, buy it at the start and make good money.

Important criteria for choosing a crypto exchange:

When choosing an exchange for cryptocurrency trading, the following factors should be considered:

Exchange size

Its reliability depends directly on the size of the exchange: the larger the exchange in terms of trading volume, the more users trade on it, and the more stable it is. Its ability to meet its obligations to you in paying the deposit depends on the financial stability of the exchange. Several factors affect the financial stability of the exchange: the number of registered users, the amount of funds deposited by customers on the exchange, the total trading turnover and how long the exchange has been in the market.

If the exchange pays deposits for a long time (for example, more than a day), this may indicate the financial instability of the exchange. Large stable exchanges usually withdraw funds almost immediately.

Change jurisdiction

The jurisdiction of a crypto exchange is formally determined by the country where the servers of the exchange website are located. Although the crypto markets are not directly regulated by governments and financial organizations in some countries, various restrictions are now imposed on some websites (up to registration refusal).

Which coins are traded on this exchange

Find out on the exchange website if it allows you to trade the coins you are interested in (coins, cryptocurrencies). The first, most important and most expensive cryptocurrency today is bitcoin. The rest of the coins are called altcoins. In second place after bitcoin in terms of liquidity is Ethereum. Stablecoins are cryptocurrencies whose value is tied to some fiat currency (that is, the common currency – dollars or euros) and other crypto assets. And also to commodities traded on the stock exchange, such as precious metals and gas: one of these stable coins is Tiberius, supported by the prices of seven precious metals.