Over the past several years, trading cryptocurrency has proven to be profitable. Bitcoin is the digital currency that started it all, and now there are numerous cryptos for millions of traders on over 300 trading platforms. All over the United States and the rest of the world, people are discovering why digital assets might be the new gold.
Even though there’s plenty of money to be made trading cryptocurrency, a lot of your success depends on the tools you use. One of the most important tools you’ll use as a crypto trader is cryptocurrency exchanges. Continue reading to learn what characteristics make some cryptocurrency exchanges better than others.
Whenever you’re dealing with currency, security is a top priority. Not to mention that with the prevalence of hackers in the United States, cybersecurity is of the utmost importance when investing hundreds or thousands of dollars in digital currency. That’s why security is one of the main features you should look for in an exchange platform.
Many crypto experts consider Coinbase to be one of the most secure trading platforms. Being that Coinbase provides custodial wallets for traders, they store digital assets in a cold storage unit, and assets in the hot wallet system are insured. Furthermore, all of the fiat currency (up to $250,000 per trader) in their system is covered by FDIC protections.
Ease of Use
Being that cryptocurrency is still a relatively new phenomenon, most people are still beginners at trading to some degree. With that being the case, it makes ease of use one of the most important features to look for in an exchange platform. Many people consider Binance one of the best cryptocurrency exchange platforms for beginners and experts alike because of its user-friendly features. Some experts also suggest Etoro as a great exchange platform for newbies.
Traders already have to learn about crypto, how it works, and different trading strategies without having to become web developers to learn how to use a cryptocurrency exchange. Binance’s liquidity (how easy it is to access your cryptocurrency and convert it to fiat currency) and ease of use are a couple of the main reasons that it has the largest trade volume of any cryptocurrency exchange in the world.
Another important factor to look for when crypto exchanges is trade volume. An exchange platform’s trade volume (how many crypto trades it carries out) can tell you a lot about what other consumers think of it.
One of the main benefits of a company having a high trade volume is that there are more opportunities for traders to make a profit. The more traders there are on a particular platform, the more trade partners there are.
You could also reason that the cryptocurrency exchange with the highest trade volume is also the best. After all, the best indicator of the quality of products or services a company provides is the size of its customer base.
Coinbase has supported more cryptocurrency purchases and trades than any other exchange in the United States, but Binance facilitates more crypto trades than any in the world. It’s no coincidence that Binance and Coinbase are also considered two of the easiest trading platforms to learn and use.
Special features are important to look for in trading platforms. Not all centralized exchanges offer the same features, which is why it’s important to do your due diligence before settling on one.
Gemini is a trading platform that’s making a lot of noise with their upcoming crypto credit cards. These cryptocurrency credit cards will work like regular credit cards except they will offer cryptocurrency as cashback rewards. Binance, Kraken, and Coinbase are also known for offering many special features for advanced traders and newbies alike.
Ultimately, deciding which cryptocurrency exchange you should trade cryptocurrency on comes down to your goals and level of trading experience. If you value features for advanced traders and a system especially for high-volume traders, you should try Coinbase or upgrade to Coinbase Pro. If you’re a beginner, you’re more likely to thrive on Binance or Etoro. However, don’t jump the gun on any of these platforms before looking at all of them thoroughly.