It is estimated that there are now 18,465 cryptocurrencies in existence. While some vanish without a trace, others can provide exciting and lucrative investment opportunities. So how do you find the right trading platform to buy them on?
Unfortunately, there is a huge variation that makes getting the right one hard. Read on as we give our guide to choosing cryptocurrency trading platforms.
Fees
Platforms make their money based on fees. When trading with cryptocurrencies there is also no standardization across platforms. This means they can differ vastly.
The platform will have fees listed for deposits and withdrawals. You should be able to find it in the platform terms, but if not you can always contact them and ask directly.
Know the Type of Platform
When trading crypto, different trading platforms can serve different purposes. While they will all allow you to exchange your cryptocurrency, they may also have added features. There are three broad categories.
A brokerage platform will let you buy and sell various currencies on the platform. They usually have a range of major currencies like Bitcoin and Ether. Many will let you buy Matic and lesser-known currencies as well.
Peer-to-peer platforms let you trade directly with another trader. They offer a lot more privacy and can act in escrow if disputes occur.
A broker operates as a forex platform would. Prices are set for coins and you can buy them there.
User Experience
You want a platform that is easy to use and perform transactions on. As you won’t know this until you have joined, make sure you check the reviews. If the website is accessed on an app, it should have star ratings and comments to help.
Keep in mind that many platforms are not set up for beginners. Most of them will take some practice before you get used to the navigation.
Security
When trading with cryptocurrencies, security is essential. By its very nature, crypto tends to be much safer than other digital financial transactions. However, that does not mean it is immune to cyber-attacks.
The financial security of the site itself is also important. There have been many platforms that have vanished with investors’ funds. Do your research on a platform and check it is not a fly-by-night operation.
Compatibility with Fiat Currency
At some point, you may need to change your cryptocurrency back to a fiat currency. All platforms will have ways to exchange. However, the means they use can differ and some may have limited ways for you to change your money.
Some exchanges will work directly with banks, while others may not at all. If you can find one that works with your bank it can make the process much easier.
Choosing Cryptocurrency Trading Platforms
Choosing cryptocurrency trading platforms does require some work and a lot of research. However, you should not put your money into one you are not sure about. Speak to friends and colleagues to see if they have recommendations.
This article is one of many to help you manage your finances. From investments to business, we can help manage your money in the coming year.
