A cryptocurrency exchange platform provides a secure and convenient way to trade, buy or sell cryptocurrencies.
Cryptocurrency exchange platforms work like traditional stock exchanges. However, instead of stocks and commodities, a cryptocurrency exchange platform trades cryptos like if you plan to buy bitcoin and fiat or local currencies.
For most people, the easiest way to get started with crypto is through an online cryptocurrency exchange platform like OKX. There are two types of crypto exchanges: centralized exchanges and peer-to-peer exchanges. Centralized exchanges work like stock markets. Buyers place orders that are filled by sellers at whatever rates they specify. Buying Bitcoin through a centralized platform usually requires less effort than P2P trading but often comes with higher fees and other risks like having a single point of failure for hackers to target and exploit.
Peer-to-peer exchanges are marketplaces for crypto buyers and sellers. They post ads about what they are willing to buy/sell. P2P trading offers more privacy than centralized platforms but involves more risk. That’s because they do not have a regulated third party overseeing transactions between traders.
#1 Market Liquidity
Another thing to look for in a cryptocurrency exchange platform is high liquidity. Liquidity refers to the degree to which a market can absorb large transactions without causing large price swings. A high-liquidity exchange platform won’t move the market as much when you buy or sell tokens, so it will be cheaper for you to trade on that platform. That is especially important if you’re an active trader and are trading large numbers of coins. When making big trades, it’s better to do so on an exchange with high liquidity because such platforms have less risk of price slippage.
Because liquidity is vital, check how many people are trading on the platforms you’re considering and how frequently they transact there. Not only does this tell you how liquid the markets are but it also gives you some insight into whether other people like using that exchange.
#2 Store Security
There are many considerations one must make when choosing a cryptocurrency exchange platform.
One of the most crucial features to look out for is whether or not the company offers two-factor authentication. Because cryptocurrency operates outside traditional banking systems, it has been a prime target of hackers. Two-factor authentication acts as an extra layer of security on top of the standard password and username login process.
Additionally, two-factor authentication can be in the form of requiring users to enter their email or phone number upon logging in from a new device. To protect your assets and peace of mind, we recommend that you only use exchanges that offer some form of two-factor authentication!
Alternatively, you could take away all risk by storing your crypto in your wallet! We recommend using a hardware digital wallet for this purpose.
#3 Exchange Policies
You must review the exchange’s policies before sending your hard-earned money to their platform. Examine the website for clearly defined policies as well as announcements. By doing so, you can ensure that your money is being handled safely and securely.
If an exchange does not have clearly defined company policies, it is best to avoid using its services altogether. Policies should list important information such as how long withdrawals will take, whether there are any withdrawal limits, which payment methods they accept, and how long deposits will take. Additionally, see if the exchange has a policy against insider trading and price manipulation activities.
#4 Market Volume
The market volume is the number of trading taking place on the exchange.
The higher the trading volume, the better. You want to join an active exchange that has enough liquidity so you don’t have to worry about issues like your buy or sell order not getting filled immediately or at all due to low liquidity.
Availability and convenience are two of the most important factors to consider when choosing a crypto exchange. If you’re new to crypto trading, you might feel like all that jargon is hard to understand
One way of learning how to interpret order books is by practicing with simulated trading. It provides an environment where you can practice with virtual currency. That could be particularly useful if there are differences between the markets on different exchanges.
#6 User Reviews and Reputation
You should always check the reviews to determine the exchange’s reputation. A good place to start is by visiting TrustPilot, a reputable online platform where people can share their honest opinion about a service or product – no holds barred. Reviews are posted by verified customers, and you can also see how many reviews each seller has received.
One or two negative reviews don’t reflect the overall experience, but if you read numerous bad reviews from actual users, then you should consider looking for another exchange platform with better customer feedback.
Also, it’s vital to take a look at an exchange’s history and how long it has been in business. That is true because cryptocurrency exchanges with a longer trading history tend to be established and reputable companies that have been tested by time and experience.
The best cryptocurrency exchange is the one that fits your needs.
When it comes to cryptocurrency exchanges, each trader has their own unique needs. The best cryptocurrency exchange is the one that fits your needs. Each platform comes with its personality quirks and nuances that you won’t realize until you have some experience with it.
As we go over what makes for a good exchange platform, keep in mind that there are different types of trading accounts available on each platform. Some exchanges will offer only a basic account; others will offer tiers based on your trading frequency or other factors; and most will offer buying and selling cryptocurrencies as an additional service, apart from trading accounts altogether. As such, not all of the points made below will apply to every kind of account or service offered by an exchange platform.