Four tips to help you choose the right cryptocurrency platform for you
Considering investing in cryptocurrency? Read four tips to help you choose the right cryptocurrency platform for you.
There are a few things you need to have on hand before you can start trading cryptocurrencies. First, you must own crypto coins, and to do this, you need to have a wallet where you can store the digital currency you’ve exchanged for your fiat money.
Take note that your wallet should be compatible with your preferred currency. If you’re planning on trading Monero, for example, then you should look for the best Monero wallet to store your coins in. Then, you must have access to a cryptocurrency exchange where you can buy, sell, and trade your coins.
These platforms work just like stock exchanges, except that they specifically deal with cryptocurrencies. Through these digital marketplaces, you can exchange your coins from one currency to another, convert your digital coins to fiat money, and see the exchange rates between different currencies at any given time.
Not all cryptocurrency exchanges are made the same, and a platform that may work wonderfully well for one trader may not suit the requirements of another. Here are some tips you should consider if you’re in the market for a cryptocurrency exchange that suits your needs and goals.
1) Do your research and look into your options
Before anything, it’s important to do your research about the different cryptocurrency exchanges available to you. While there are many legitimate platforms that have served traders even in the earliest days of cryptocurrency, there are also plenty of shady websites that sell themselves as digital marketplaces to lure naïve traders.
Before signing up for anything, make it a point to cross-check your options and ensure that the platform can be trusted with your coins. Many experienced traders are more than happy to help newbies set a solid foundation in trading cryptocurrencies, and they can point you to legitimate exchanges.
Also, check if your preferred exchange supports the currency you want to use because not all exchanges accept trades that are done using uncommon digital coins and tokens.
2) List the features your ideal exchange should have
What features do you want to see in your ideal trading platform? Do you want it to have heightened security or insurance options, for example? Remember that cryptocurrency is not backed by any financial or government institution, and there’s little you can do if malicious entities are able to breach your trading platform.
Some platforms invest in beefing up their security, while other exchanges have insurance options that will protect their traders if they get hacked or become victims of fraud. Aside from security and insurance, check out the fees that you’ll incur from using an exchange. Will you be required to pay a fixed amount or a portion of your profits, or will the fees fluctuate according to the movement of the market?
Some exchanges make it easier for you to earn a profit at a higher fee, so don’t be quick to dismiss a platform that is more costly than others.
3) Ask questions about how the platforms handles tax information
Dealing with taxes that come with trading cryptocurrencies can be quite tricky, as many laws and institutions have yet to catch up with the latest developments in the world of digital currencies. Check if your exchange has a program or downloadable form that will enable you to report and reconcile your profits with your financial responsibilities easily and quickly.
An exchange with a tool like this will improve your trading experience in the long run and save you from having to worry about whether or not you’ve paid your dues correctly.
4) Determine how you want to store your coins
Some traders want to keep the public and private keys to their crypto holdings to themselves, and this is perfectly fine. However, if you’re a complete beginner, you may find it more convenient to store your coins with your online account while you’re still exploring cryptocurrency trading.
As your trading knowledge grows and as your holdings increase, you can perhaps explore other storage options, like a physical wallet. When choosing exchanges, it’s a good idea to check the storage that the exchange allows before you make any commitments. If possible, find an exchange that offers convenience to newbies as well as a wealth of storage options for seasoned traders.
The growing popularity of cryptocurrency trading has made it much easier for newbie traders to access the tools and platforms that they need in order to start trading. There are plenty of cryptocurrency marketplaces on the internet today, so you have to be careful about picking the platform that will enable you to meet your trading goals with as little effort as possible.
If you’re on the lookout for a cryptocurrency exchange, consider implementing these tips. This way, you can be sure that the exchange you’re working with will make it easier for you to learn the ropes and thrive while you’re trading digital coins.