As a beginner, trading or investing in cryptocurrencies can seem intimidating. Every once in a while, you’ll come across news of people losing money in mega scams. The cryptocurrency space is undoubtedly one of the most viable investments yet quite challenging at the same time. But it is also important to mention that a lot has been going on to protect digital assets investors.
Whether you wish to go long or short term, when investing in any cryptocurrency, the most important concern is safety and security. Speaking of security, your best shot at safeguarding your investment is by choosing the right trading platform.
Unlike a few years ago when Bitcoin was still gaining traction, today, dozens of decent trading tools are available for your choosing. PrimeXBT, for example, offers a Bitcoin-based multi-asset trading platform serving clients in 150+ countries. The 2020 ADVFN International Financial Awards and Forex Awards winner in the Best Platform for Margin Trading and Best Crypto and Forex Broker categories is among the fairly few well-known secure and private crypto trading tools today.
However, with multiple players comes the challenge of choice. So, how do you know if a platform is right for you? Read along as we unpack the most sought-after things in crypto trading tools.
Basics Of A Cryptocurrency Platform
Initially, cryptocurrency trading platforms were tools of exchange between one crypto for another. For instance, one would typically trade Bitcoin for Ethereum or the vice versa. But their purpose has evolved to include the trading fiat currencies and cryptos, cryptos for gift cards, and so on. In short, a cryptocurrency platform is a tool that allows for the trade of digital assets for a range of other assets.
Now, not all trading platforms operate in the same way – PrimeXBT and Coinbase could be trading similar assets but one could be a market maker while the other is a matching platform. A market maker essentially takes commissions from the bid-ask spreads while a matching platform simply charges fees on transactions.
Most crypto trading platforms are decentralized, meaning they are not operated by a central party. Centralized are, however, regulated and controlled by an appointed authority. There are pros and cons to each and in the end, it boils down to individual preferences.
Contrary to what most people would imagine that crypto exchange has to be virtual, they also take a brick and mortar shape. As an online platform, crypto exchanges trade electronically transferred assets for digital assets. But as a brick and mortar, it exchanges digital assets for traditional payment methods.
Most exchanges operate in less regulated regions, typically outside the western countries. However, they still handle fiat and other assets from western countries. Users can use credit and debit cards, bank wires, and other forms of payment to either deposit or withdraw cash from exchanges. But just like their forex counterparts, regulatory bodies all around the world are starting to formulate jurisdictions around governing cryptocurrency exchanges.
How To Choose A Cryptocurrency Exchange
With 200+ trading platforms to choose from, there is no denying that even the experts find it tough picking the right one. Selecting the right trading tool is a major milestone towards becoming a successful trader.
You must first exercise extreme caution. As cliche as that sounds, it is the first thing to do when venturing into any investment. Exchanges have in the past gone under with investor funds: remember Mt Gox, one of the earliest crypto exchanges that collapsed with millions of investors’ money? There was another that even had the CEO buried with the system’s password, leaving thousands of investors in limbo.
Well, it doesn’t stop at that. Others have been hacked and compromised in various ways.
To guarantee the safety of your investment, you might want to, first of all, look up the physical address for that particular exchange. While the absence of a physical address isn’t much of a red flag anymore considering the rise of remote working, it sounds like a good first reference point. And even in the absence of a physical address, it pays to know where an exchange is based to foster transparency. You will also be able to understand the jurisdiction under which the exchange operates as some exchanges do not permit users from certain regions.
Additionally, look out for the chargeable fees or commissions. This does not mean that you should only go for “affordable” exchanges at the expense of other equally important features. As a general rule, strive to balance between affordability and security. For instance, PrimeXBT stores all customer assets in a cold storage wallet and executes all transactions manually after a careful risk score assessment, money laundering evaluation, among other checks to boost the platform’s security.
On affordability, the tool seems to be walking the talk too. In a 2019 statement, the platform announced a material reduction to its trading costs: “We are delighted to offer new reduced fees to PrimeXBT platform users. We believe that traders should focus on trading opportunities rather than on costs. Oftentimes, amazing profit opportunities are being missed only due to unreasonably high fees. And we don’t want that – we are here to provide the best possible trading environment for our customers.”
Lastly, you’ll need to look out for the available payment methods. While a platform may have top-notch security coupled with affordability, it serves you no good if you’ll cross worlds just to deposit or withdraw money. Ensure that the exchange you choose offers convenient methods of payment that are not just available in your area, but also be secure, affordable, and reliable.
If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.