With so many options, how do you pick the best cryptocurrency exchange app? To make that decision, you will need to investigate the specifics of each crypto currency prices and select the one that best meets your needs. When deciding how to choose a exchange, there are numerous factors to consider. Here are some of the most crucial:
Understanding the role of liquidity in cryptocurrency is one of the first steps in investing in cryptocurrency. Traders require liquidity so that they can execute trades at any time without disrupting the market too much. This means that on any given day, an exchange must have a sufficient volume of orders flowing through its order books. To achieve that volume, an exchange must have a large number of users or users who hold a large number of assets on the exchange and trade them frequently.
If there are only a few orders available, there may be no one willing to buy or sell the coins that an investor wishes to acquire or liquidate.
- Optional Assets
Is the exchange in question trading the assets you are looking for? With thousands of different types of cryptocurrency and coin price in circulation, no exchange can provide trading pairs for all of them. In general, coins with higher market capitalizations are more likely to be traded on popular exchanges. Investors seeking more exotic, less-traded coins may have to look for smaller exchanges.
Many people use review sites like Yelp to help them decide which restaurant to visit on the weekend. Those interested in cryptocurrency exchange sites should read online reviews. To conduct preliminary research on what previous and current users of a specific exchange have said.
- Educational resources
When it comes to choosing an exchange for crypto beginners, the ability to learn more about different coins, digital assets, and blockchain technology is a top priority. Through its Coinbase Earn programme, for example, Coinbase rewards users for learning about new coins. Coinbase will reward you with a small portion of the cryptocurrency in exchange for watching videos and completing quizzes about various coins, which you can then hold or convert to something else. Others, such as Gemini's Cryptopedia and Binance Academy, provide on-site courses and articles to help you learn about crypto markets, history, and innovations.
Storage can be a contentious issue among cryptocurrency enthusiasts. Many people believe in the adage "not your keys, not your coins," which states that you should keep the public and private keys associated with your crypto holdings in your possession rather than leaving them in the custody of the exchange.
However, as a beginner, an exchange that allows you to keep your cryptocurrency in your online account may be a good option. After you've learned more about storage options and increased your holdings, you may decide to keep your cryptocurrency in your own wallet. However, Ross cautions against using exchanges that only allow you to store on their platform, such as PayPal. Robinhood recently announced the creation of a crypto wallet, allowing you to transfer your coins off-platform.