How to Choose Cryptocurrency Exchange
If you are completely new to the crypto market, it’s important to know what you should be looking for when choosing your cryptocurrency exchange. Some of the factors include exchange history, security, trading fees, liquidity, markets, and customer service.
This might sound overwhelming for some and in that case, we recommend reading our cryptocurrency exchange reviews and making a decision based on that information. If you are willing to dig through the market and its cryptocurrency exchanges, we recommend looking at the following factors in addition to your basic requirements
Reputation
When looking for a cryptocurrency exchange it’s always good to search the web for user reviews, reviews made by well-known crypto-related sites, and forums. It’s also good to look at the launch date of the exchange as an old stock exchange will probably have a good reputation compared to a new one.
We always recommend checking whether the cryptocurrency exchange is officially registered and that it also has a license.
Payment Methods
What payment methods are available on the crypto exchange varies from exchange to exchange. Some exchanges only accept deposits and withdrawals of cryptocurrencies which means you won’t be able to deposit or withdraw FIAT-currencies (government-issued currencies such as USD, EUR, NOK or SEK): However, if you want to make a deposit or purchase using FIAT-currency, you want to find an exchange that uses traditional payment methods such as credit/debit card, bank transfer, and PayPal.
Coin-Pairs
Trading pairs or coin pairs refer to transactions between two different types of cryptocurrencies, and not all exchanges support the same pair. There are over 1000 trading pairs, but it is important to remember that there are not exactly trading pairs between Bitcoin (BTC) and Ethereum (ETH) on Binance and for instance Coinbase.
If you are an experienced trader looking to diversify your coin portfolio, look for a good cryptocurrency exchange that supports many trading pairs with high liquidity.
Liquidity
Liquidity is one of the most important aspects of any form of exchange, especially when it comes to cryptocurrencies. You should always choose a crypto exchange that has high liquidity, and this will help you to achieve a fair and stable price for your crypto.
The more liquidity the easier and faster your trade will go through without you having to suffer from the price volatility.
Trading Fees
When it comes to trading fees, the majority display this information on their website. In some cases, there will be a fee when making a deposit or withdrawing from your trading account. In addition to transaction fees, for every trade you make there will most likely be a small trading fee. The industry standard is about 0.25% but some exchanges might even charge you up to 5% which can be very costly if you are trading often.
Customer support
In the cryptocurrency market, finding a crypto exchange with a dedicated customer support team who’s available 24/7 is unfortunately not always easy. Only a few exchanges offer 24/7 customer support, and some exchanges can take weeks to answer simple questions.
When choosing an exchange, we strongly recommend that you look up reviews, forums, and perhaps even visit their social media channel to find more information about the exchange’s customer service.
KYC Verification Requirements
Some exchanges allow you to remain anonymous, but the majority require you to do a KYC (know your customer) verification when making a deposit or withdrawal using traditional payment methods such as credit card or bank transfer. Remember that buying cryptocurrencies with a credit card requires identity verification and carries the risk of being subject to the same charges as other forms of payment, such as bank transfers.
This verification process is normally required by law to protect against fraud and money laundering. KYC is strictly controlled by the crypto exchange and you should submit documents to verify your identity and address.
Any reputable platform that allows cryptocurrencies to be purchased in FIAT-currency is required to do a KYC-verification, so this is generally seen as a good sign.
Storing crypto securely
So you have made a deposit and purchased the first cryptocurrency of your liking and you might wonder what to do next or how to store them safely. You can choose to keep your crypto at the exchange you bought them but you should keep in mind you are then completely relying on the security of the exchange.
For security reasons, we always recommend storing your cryptocurrency assets in a crypto wallet, preferably a hardware wallet if you are a long-term investor also known as a “hodler”.
For more information about which crypto wallet is most suitable for your needs, check out our page about crypto wallets. Go through the different types of wallets and what you should be thinking about when choosing your crypto wallet.
Conclusion – What Is The Best Crypto Exchange?
The best cryptocurrency exchange is completely based on one’s specific needs and trading platform requirements. That being said, if you have never purchased cryptocurrencies previously, we strongly recommend you check out Coinbase as it is overall a really beginner-friendly platform. For more moderate users or traders then Binance and Kraken are very good options as it offers more advanced trading tools and trading pairs.
Don’t hesitate to check out our other crypto exchange reviews as these are also solid platforms and if you want to explore further we recommend you always pay attention to the exchange fees, security, verification processes, reputation, and the other previously mentioned factors.