As cryptocurrencies are becoming more popular, new cryptocurrency exchanges are coming onto the market, but only a few of them should deserve your confidence.
All crypto investors should certainly spend enough time investigating a reputable crypto exchange so that they can deposit their money without any fear.
#1 What is a cryptocurrency exchange?
The cryptocurrency exchange is a web platform that allows investors to exchange “fiat money” (USD, EUR, etc.) for cryptocurrency or another cryptocurrency type.
#2 Why do I need a crypto exchange?
Cryptocurrencies cannot be purchased from where the other conventional investment options offered. Banks or other retailers will not sell you crypto in opposite to gold or stocks.
There are dedicated platforms for the exchange of cryptocurrencies. Therefore, if you want to make any kind of investment securely, you should open an account with a good cryptocurrency exchange.
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#3 What to look for in a high-quality exchange?
Finding a high-quality cryptocurrency exchange early on will prevent many unpleasant experiences you may have in the future.
I would ask the following questions to make sure the exchange is OK to work with:
#4 Where is the crypto exchange based?
This is probably one of the most important questions you need to ask. You deposit money to an exchange. Do you know where did you send your money?
Is your exchange based on Dubai or Hongkong or some other place in the world? Each country has different rules and regulations that may eventually affect you at some point.
Make sure the exchange you plan to work with is based in a country that is regulated well enough.
#5 Does The Exchange Have Good Amount Of Volume & Liquidity?
Cryptocurrency exchanges with big trading volume have outstanding liquidity. Liquidity is the blood of an exchange. Centralized exchanges are usually a more liquid environment to rapidly buy/sell your crypto. It’s also needless to say faster.
Larger market cap coins such as BTC, ETH or LTC are more liquid than smaller market cap coins. This is due to more buyers and sellers available to trade these coins.
If a crypto exchange taking more than a couple of seconds to fill our order we want to start looking better alternatives to it. Keep in mind seasonal changes like a bear market can significantly lower the volume in result the liquidity together.
#6 Does The Exchange Have Enhanced Security Features?
We want the exchanges to have at a minimum:
- Two-factor authentication (2FA) (Either Google Authenticator or SMS)
- Anonymous sign-ups (this feature usually is applicable to decentralized exchanges)
- Complex captchas to be solved by the robots.
- Email confirmations to complete a withdrawal process.
- Ability to set daily maximum withdrawal volume to our desire.
#7 Is the Crypto exchange transparent enough for its processes?
At all costs, we want to avoid the exchanges that have low transparency.
I have worked with shady exchanges to buy certain cryptocurrencies only offered by them.
Trust me, depositing your funds, exchanging it and finally withdrawing is a pain once your exchange has no priority to share information with you.
#8 Is the exchange notorious to make unpleasant surprises often?
During the 2017 bull market, I wanted to sell my crypto as it tripled in less than 24 hours. I visited the exchange website, but the site was under maintenance for an unexpected period.
The site went live 3 days later. I could barely profit when I had the unique opportunity to triple my investment.
It doesn’t really matter how good you are reading the market.
If your cryptocurrencies on an exchange that makes unpredictable moves, you may very likely find yourself pulling out hair on your head.
#9 Does the exchange has good social media presence?
High-quality businesses spend time and money to develop a good relationship with their clients. It is absolutely necessary to stay updated by the exchange through social media channels (usually twitter or telegram).
#10 Is crypto exchange regulated by trusted authorities?
In US crypto exchanges are regulated by the “Securities and Exchange Commission” (SEC) under U.S. securities laws.
Similarly operating authorities exist in other countries worldwide. We must insure that our cryptocurrency investment is protected by a similar regulatory entity.
In reality, you would never know how the Hong Kong government rules its crypto exchanges, but you can limit your risk.
#11 If the crypto exchange hacked before, if yes, could they restore investors funds?
So many times cryptocurrency exchanges are hacked. History repeats itself. I am sure it will happen again even in the future.
I think Mt Gox is the most famous cryptocurrency hack. There are so many hacks as well as hack attempts occurred.
It is very important to check the cryptocurrency exchange, that is subjected to a hack, could return funds to investors?
This is a very good sign for a crypto exchange that deserves your trust.
Because if once they did it, they will very likely do it again. Let alone the lessons they learn from the hacking by itself.
#12 Do they delist cryptocurrency projects and make no refund to the investors?
I guess you didn’t expect this question to be asked. What would you do when an exchange delists your cryptocurrency?
Exchanges here to profit from your transactions. If the value and/or the trading volume drops below a certain threshold for a significant amount of time exchange may want to delist your coin.
Hence it is not a good idea to hold to the asset offered only by one or two exchanges.
#13 Do they have strict rules for cryptocurrency project listings?
If a crypto exchange list almost all cryptocurrencies without having a filtering system, you may not want to work with that exchange.
Cryptocurrencies with committed teams are the type of projects we want to invest in to be profitable in the long term.
#14 How fast technical support reacts to opened tickets or sent emails?
This one is no brainer. But important to mention here.
I have experienced crypto exchanges that respond to tickets in weeks if not a month. No joke, for many crypto exchanges you are nothing as soon as you deposited your funds.
I am not going to call them names of low-quality cryptocurrency exchanges here not to disrespect their businesses. But rather I will show you some high-quality exchanges that you can trust.
#15 Do They Have A Functioning Mobile App?
Although almost %50 of entire internet traffic is going through mobile devices, there are still cryptocurrency exchanges that have no functioning mobile app.
You may not always have the chance to track your investment on desktop, hence a dedicated mobile app is a big plus.
Let’s assume you just started your journey with the cryptocurrencies. You have made your research and finally decided to buy your favorite pick of altcoins.
The first thing you need to do is find a “Fiat to BTC exchange”.
Because %99 of altcoins cannot be purchased with “fiat money” (dollars, euro etc). In these type of exchanges, you can purchase major cryptocurrencies (Bitcoin, Ethereum, Litecoin, etc.)
Then you need to move your BTC to the specific crypto exchange that your targeted altcoins are offered.
Exchanges may ask you providing a passport or a national ID, together with your driving license. Some exchanges require your address verification. In this case, you will be asked to provide a utility bill, or credit card statement.
Both documents should have your name and address information on them. Exchanges have different requirements, better visit your account page on your dashboard to see what is asked for.
Check what is exactly required from you to fully verify your account. This step is incredibly important.
Never start any buying or selling or even depositing any assets, before you fully verify yourself on the exchange platform.
I was almost forgetting, they may ask you to take a selfie of yourself while holding your passport with a piece of paper that showing the current date.
Let’s start with the good cryptocurrency exchanges that you can definitely trust.
Binance is by far the best cryptocurrency exchange available.
There are older exchanges exist, however, compared with the Binance they are not as much reliable. Binance also provides a great selection of different altcoins all in one place.
Earlier they didn’t offer the option of “buying crypto with a credit card”.
Now, you can use your credit card to buy BTC, ETH, LTC, and XRP. This move made Binance the cryptocurrency exchange platform that is much ahead than its competitors.
People no more need to go to “Fiat to BTC” and then “BTC to Altcoin” exchanges. The minimum amount of purchase with a credit card is set as $50. Transactions are secured with the proven payment gate “Simplex”.
Why would to buy crypto on Binance with the credit card?
Following reasons make it very attractive for people to buy BTC with the credit card.
- On average 10 to 30 min crypto deposited to your wallet
- Fast transactions with a VISA or Mastercard
- Low fees applied %3.5 per transaction
Kucoin is also another good exchange that is reputable. Certain altcoins that you may not find on Binance you can find on Kucoin.
The user interface of Kucoin is a little different than Binance. But both exchanges are quite user-friendly. It will not take a long time to get used to them.
You already know why you should never hold your crypto assets on any exchange.
Kucoin also requires an ID verification to have a fully functional account. This is expected from the exchanges to be compliant with the regulations.
Bitmex is one of the world’s most liquid cryptocurrency exchanges. It allows for making high leverage trading. The capability of trading with high leverage makes Bitmex much more liquid than the other exchanges.
Unlike the other cryptocurrency exchanges, Bitmex accepts only Bitcoin deposits. If you haven’t traded on Bitmex before, it may take some time for you to get used to its interface.
Although Bitmex doesn’t offer a wide variety of altcoin selections, the ability to trade on high leverage (up to 100x margin) is mouth-watering for many traders. In other words, you can control 100 times more than your initial balance.
For those who have a small account, with good ability predicting where the market will move, Bitmex can be the best option. Bitmex applies quite smaller trading commission fees when it is compared with the other exchanges.
Important Reminder: Cryptocurrencies are already very volatile in nature. Using high leverage adds up additional risks for your investment. Most people lose money trading the cryptocurrencies.
Making consistent gains on the cryptocurrency market is not for everyone. It requires having good trading psychology, rock-solid money management plan, as well as a proven to work trading strategy. Never invest in anything more than you can afford to lose.
Cex.io launched in the UK in 2013, started its service as a cryptocurrency exchange, and a cloud mining company. However, in January 2015, the company decided to stop its mining services to continue as a cryptocurrency exchange only.
When it comes to buying “BTC with cash”, there are not many options you can use your credit card. Cex.io differs from other crypto exchanges at this point.
They don’t accept fiat money only via Bank Transfers but also with a credit card. We can surely say Cex.io is one of the most reliable “Cash to BTC exchanges” that let you buy Bitcoin with your Credit Card. Their streamlined dashboard enables purchasing crypto with a few clicks only.
They accept deposits made via:
- Payment Card (VISA or Mastercard)
- International Bank Transfer
- Domestic Bank Transfer
This exchange has features of maximum security, and maximum reliability to store your coins. I would highly recommend checking their “Frequently asked questions” section, to learn about all the features they provide.
There are many other cryptocurrency exchanges on the market. I have only shared with you today the ones I have had no issues with. You may find some other exchanges that may work better for you.
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