Bitcoin has been around for a while now, and with its popularity, more and more people are looking to invest in cryptocurrency. This has led to the rise of numerous Bitcoin exchanges where you can buy and sell digital currency.
However, not all exchanges are created equal. Some are scams, while others have high fees or poor customer service. So how do you pick the suitable exchange to trade Bitcoin without getting scammed?
To make sure you’re picking the proper exchange, here are five steps to follow:
- First, do your research!
The cryptocurrency market includes a range of digital currencies, and it is increasing. A total of 1,800 cryptocurrencies are now being exchanged, with listings doubling in 2022.
There is no single way to pick the proper cryptocurrency exchange for you. However, there are some signs or signals you can use to do your research and find out which ones will work well for your needs. When trading bitcoin, traders should research and pick the suitable exchange to trade on. They should be aware of all the available exchanges and what they offer to the traders.
A trader should always do their research before choosing a platform to trade bitcoin on. It is essential to know what each of them offers, how liquid they are, and how trustworthy they are.
Many exchanges offer different services and specialise in different cryptocurrencies. There are exchanges for beginners who want to buy Bitcoin for regular money and exchanges for experienced traders who want to use advanced trading tools or make investments in altcoins other than Bitcoin. Moreover, some exchanges are for experienced and novice traders like Bitcoin x.
Bitcoin is traded differently on each exchange depending on its liquidity and specificities that determine price and limit differentials – order types, and much more.
2. Compare fees
To be successful in the cryptocurrency markets, one must remember that they deal with currencies that can fluctuate drastically. They are not as stable as stocks and bonds, but they can be worth more and less than their original value in days. In order to have success and profit, one should pick the right exchange to trade bitcoin.
Some factors to consider when picking an exchange include fees, security practices, ease of use, liquidity, and services offered.
The second factor to consider when choosing an exchange is the fees. This is important because it will determine how much money you make from your trades. For example, if you buy BTC for $10 and sell it for $11, the fee is 1%. Many exchanges offer trading services for cryptocurrencies. However, not all of them have the same fee structure. Some exchanges charge a fixed fee per trade, while others charge a commission on each transaction and swap.
Some exchanges offer to buy and sell options, while others do not.
3. Look at reviews
While some people think that the cryptocurrency market is a bubble, others believe it is here to stay. Regardless of the tension, people are still trying to find suitable exchanges and trading platforms to trade bitcoin.
As we continue down this path of cryptocurrency adoption, investors and traders must know which exchanges have the best reviews and reputations. A beginner must consider the type of exchange and country it’s registered in, its services and payment options, security, transaction fee, privacy, etc.
4. Check out the security measures
Bitcoin has two main advantages. First, it doesn’t require a bank or other centralised financial institution to be traded or transferred. Second, it doesn’t allow fraud because it doesn’t need an intermediary to confirm transactions, and the trading is based on peer-to-peer networking.
Therefore, security is one of the essential things for cryptocurrency. With more and more cryptocurrency exchanges popping up and new ones being created, security is becoming an issue that needs to be addressed.
So if you are looking to trade Bitcoin, you should make sure that your exchange will meet your security needs? Here are a few things you should consider:
What are some ways that we can pick a secure exchange?
1) Does the exchange have an active development team? A newly released website without any updates in software can indicate a lack of development for the platform and may put your money at risk for third party hacking
2) Is there an external audit by security firms?
3) Is the exchange licensed by a government agency?
4) Are the servers insured against hacking?
5) Do they provide 2FA authentication or just email verification?
6) Is there a live chat 24/7?
7) Do they offer oAuth or API access for high-volume trading platforms like Bloomberg Terminal or Interactive Brokers API?
5. Make sure the exchange is reputable
Before you even think about trading bitcoin, you need to pick the proper cryptocurrency exchange. Bitcoin is volatile, which means it can be a lucrative investment if done correctly. But, as with any investment, this comes with risks of losses. The best way to avoid these risks is by choosing a reputable exchange and sticking to it.
So what are some things that you should look for in a reputable cryptocurrency exchange? Whether or not they have been hacked in the past is one of the most significant factors. If they have been hacked in the past, they lost money and could be tempted to do it again. Avoid these exchanges and try to find another one instead.
One of the most important considerations you should make before making your first trade is where to do it. Bitcoin exchanges are not all the same, so it is vital to take the time to find one that offers services and prices that meet your needs.