by Dana Sitar | April 9, 2021
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These are the features to look for when choosing the right cryptocurrency exchange for you.
Ready to dive into cryptocurrency investing and trading?
Hundreds of platforms around the world are waiting to give you access to thousands of digital currencies. And with so many features, you might not know where to find the best cryptocurrency exchanges and apps. When shopping around for crypto platforms, look for the following features and perks.
The number of currencies you can trade with varies wildly among exchanges. For example, Coinmama has 10 currencies on its platform, while others may offer hundreds. If you're a novice trader, you're probably only looking for Bitcoin and maybe a couple of other popular currencies, so a big selection could overcomplicate the platform for you. But if you're more experienced and have the time to do your research, you might want an exchange with a big selection that includes lesser-known coins you can invest in early.
Due to lack of government regulation and its black-market use, crypto may seem sketchy to some. Most major platforms like Kraken realize this and take serious precautions to keep your personal and financial information safe and protect your holdings from theft. Look for security features like two-factor authentication (2FA), encryption, and cold storage (offline storage to protect against theft and hacking).
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As competition increases and risk decreases, fees in the industry will likely standardize and drop across the board. For now, you'll find a wide variety. On robust exchanges, you'll usually face a trading fee and potential extra commission costs. Among these, Binance is known for its competitively low fee. Some exchanges, like Voyager, offer commission-free trades. Platforms might also charge a fee for deposits and withdrawals.
Based on regulations, can you use the exchange while in your country and state? If an exchange isn't available in your state now, keep an eye out, because companies are regularly expanding. On the flip side, if you're using an international exchange, be aware of regulatory changes that might make it illegal to use an exchange in your country. Platforms should keep you up to date, but swift changes and poor customer service are not uncommon. So it's a good idea to look out for yourself.
To fund your account and buy crypto, you may choose to connect your bank account to transfer funds. Or you may use a debit or credit card. Some platforms may even allow crypto-to-crypto trades, while some won't.
Not every exchange platform comes with a wallet to house your crypto holdings. Being able to manage your wallet and trading in one platform could be more convenient. But if you're holding a large amount of crypto, you probably want an external cold wallet for added security.
Like traditional bank accounts, some crypto platforms offer rewards on your holdings to encourage you to keep your money on their platform. Some accounts yield up to 10% on certain coins when you keep a minimum balance. Unfortunately, unlike traditional bank accounts, your holdings aren't FDIC-insured. If the crypto platform fails, there's no guarantee you'll get your money back.
Crypto might be the currency of the future, but not every platform is on board with the technology of right now. A robust and user-friendly investment mobile app could help you manage your crypto account and make trades on the go without navigating a clunky mobile website.
Crypto platforms don't always have the best customer service. This is a shame because if anything ever goes wrong with your account, you're going to want an exchange that can quickly respond to your needs. If you happen to come across an exchange with high marks for service, this is a huge perk that could seriously improve your experience.
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Some platforms include a debit card you can use to make purchases directly from your crypto account without first exchanging for fiat currencies (like U.S. dollars).
A few platforms, including BlockFi, offer a credit card that lets you earn crypto rewards for your purchases.
Choosing a crypto exchange can be challenging. If you're just getting started in crypto investing, paying attention to the above features can keep you from getting overwhelmed.
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