How to Pick Crypto Trading Platforms Everything You Need to Know
Best Platforms for Trading Crypto: Did you know there are 1,203 Bitcoin social media posts per hour?
Cryptocurrency remains one of the most popular topics on social media. After all, only a few investment profits can compare to crypto trading profits.
But crypto trading isn’t always as straightforward as social media posts make it seem. Many traders have been burnt after choosing the wrong trading platforms.
Does this mean you should forget about trading cryptocurrencies? No, you only have to pick crypto trading platforms that tick a few boxes.
Lucky for you, we’ve compiled a list of factors that should be on these boxes. Here’s everything you need to know when choosing trading platforms.
Understand the Different Types of Trading Platforms
Contrary to popular belief, crypto trading platforms aren’t all the same. They fall into two broad categories – centralized and decentralized platforms. Though both options have pros, it’s best to know what you’re getting into before trading.
Centralized platforms are popular because they’re more organized and stable. They’re run by organizations that verify transactions and ensure their security.
Decentralized platforms are handled locally on the blockchain, so anybody can verify transactions. This increases their transparency but also makes them riskier than centralized options.
Before making your first trade, take time to assess the platform you’re considering. Does it fall under the centralized or decentralized category?
This way, you know what you’ll need to focus on when trading. If it’s a decentralized platform, you’ll need to look for ways to secure your transactions.
Consider Reputation
Nothing tells you more about a platform than its reputation. You can find all the information you need on a specific platform on the internet.
Look at their users’ experiences on popular review sites. Pay particular attention to reviews on ease of use, withdrawal, and customer support.
If you can, meet up with various platforms‘ users before making your choice. Ask them about some of the problems they encounter and how easy they are to solve.
Also, ask for tips for maximizing crypto trading profits on various platforms. Only consider platforms with excellent reviews for your peace of mind.
User Experience
As is with stocks, timing is vital when trading with cryptocurrencies. The last thing you need is a platform that’s difficult to use. You may end up missing out on lucrative trades.
So, always assess a platform’s ease of use. Can you easily understand the platform’s functions and rules? If so, it’s an excellent choice for cryptocurrency trading.
But, don’t expect trading platforms to be as easy to understand as social media platforms. Give yourself some time to go through their features before shooting them down.
After assessing ease of use, consider whether your chosen platform allows mobile access. This is convenient for people who don’t always carry their laptops.
Security
Investors lost roughly $1.22 billion to hackers between January and March this year. So, security is a core concern for new and experienced crypto traders.
Always check the trading platform security by conducting a background search. Here are the two core questions you need to ask:
- How many security threats and breaches have your chosen platform gotten?
- How has the platform dealt with the breaches?
Security threats are common in the crypto trading market. And, platforms can only do so much to stop them.
But there’s a difference between a threat and a breach. The right platform will have systems that detect hackers early.
It’ll also have measures to protect investors’ money in case of breaches. Some return money to investors’ wallets when they detect suspicious transactions. This may not save all your money, but it’ll minimize losses.
Purchasing Options
Nothing beats the convenience of buying cryptocurrencies using various modes of payment. So, always check a platform’s purchasing options before trading.
The ideal one will allow online payment methods like CashApp and PayPal. It’ll also allow investors to buy cryptocurrencies using debit and credit cards.
Nowadays, you can even find platforms that allow you to trade using cash. You only need to find their ATM, deposit cash, and start your trading journey. Click for more information on how to buy cryptocurrencies using ATMs.
Fees
Crypto platforms operate on investors’ fees. Since there’s no standard charge on trading fees, various platforms charge differently.
Some take a fraction of your earnings from every transaction. Others earn from investors’ deposits and withdrawals, and others from both.
Always look into how your chosen platform intends to earn from you. This may be stressful as you’ll need to read its policies or contact its support staff. But, it’s necessary as that’ll save you hundreds, if not thousands of dollars, in the long run.
Any investor worth their salt will tell you fees can kill your investment. Shop around until you find a platform with manageable costs.
Avoid any platform that’s not willing to disclose charges before trading. The best ones are transparent from the beginning.
Guidance
Trading with cryptocurrencies is far from easy. One wrong move can ruin your portfolio, causing losses.
The best platforms protect new investors from making mistakes by offering guidance. They offer advice through blogs, videos, or a mixture of both.
Usually, they derive their tips from successful traders‘ moves. The aim isn’t to give new investors a cheat sheet but to help them understand the best crypto trading strategy.
Trading Limits
This isn’t a primary consideration for new investors, but it’s crucial for those looking to maximize their earnings. You can’t trade on a platform with a $1,000 daily trading limit and expect a $1,000 profit.
For that, you’ll need a platform with a substantial trading limit. Always read through any platform’s policies on limits to avoid choosing the wrong one.
Listed Assets
How many cryptocurrencies do you know? Some investors assume that Bitcoin and Ethereum are their only options. While these are among the leading digital currencies, they aren’t the only ones.
Limiting yourself to a few cryptocurrencies limits your earning potential. Here are other cryptocurrencies you should know about:
- Dogecoin
- USD Tether
- Litecoin
- Namecoin
- Novacoin
- Peercoin
- Devcoin
- Terracoin
There are roughly 18,400 cryptocurrencies in operation today. While a single platform can’t provide all of them as options, it should give a substantial number.
Lesser-known options may be ideal for a first-time investor because they’re cheaper. Confirm if your chosen platform offers the choices you want to trade.
Crypto Trading Pairs
Crypto trading pairs are cryptocurrencies you can trade for each other. Examples include BTC/LTC, allowing you to trade Bitcoin for Litecoin. Not all platforms will support your desired exchanges.
If you’re interested in trading Ethereum for Bitcoin, look for platforms allowing ETH/BTC exchanges. Otherwise, you can’t take advantage of the arbitrage opportunities from different prices. Luckily, you can find this information by conducting a simple internet search.
Legality
Though cryptocurrencies aren’t legal tenders, crypto platforms are regulated by the government. Here are some cryptocurrency regulations in the US:
- Platforms must register with the Financial Crimes Enforcement Network
- They must enforce an anti-money laundering program
- They must keep all the necessary trading records
- They must submit the records to the relevant authorities
Not all platforms follow these regulations. While it may seem easier to deal with those that don’t, it’s too risky. Protect your finances by finding a platform that follows the rules.
Verification Requirements
Like other investing sites, crypto trading platforms require users to verify their identities. Some ask for verification details before trading, and others when withdrawing earnings. Either way, asking for these details is crucial to preventing criminal activities.
Be cautious when dealing with platforms that don’t verify your identity. They’ll likely have criminals as clients, putting your investment at risk.
Risks could be anything from government interference to hacks. They can affect trading, causing you to lose out on lucrative trades.
Exchange Volume
The best crypto trading platform options have high trading volumes. Such platforms make your life easier since they can access various trading assets.
And, their resources allow them to offer bonuses and discounts, so you can save a lot of money. You can contact your chosen platform for this information or use the internet.
Customer Service
As with anything artificial, crypto platforms sometimes face problems. You may find trading or withdrawing your money difficult.
If this happens, the people to call should be your chosen platform’s customer support team. But, what will happen if they’re unresponsive or unhelpful? Chances are, you’ll end up losing your hard-earned money.
To prevent this, assess a platform’s reliability before starting trading. Reach its customer support staff with questions, and evaluate how they respond. The right team will get back to you quickly and clarify any issue or concern you may have.
Leverage These Tips to Pick Crypto Trading Platforms
Hopefully, you’ve learned how to pick crypto trading platforms from this article. Consider various platforms’ reputations, security, fees, and assets to find the right one.
Looking at all the factors we’ve discussed here will take some time. But, it’s worth it as it’ll leave you with the best trading platform.
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