Cryptocurrency traders have had a tumultuous journey in India. Needing to navigate changing governmental regulation and oversight. The most positive news for traders came in March of 2020, when the Supreme Court overturned the Reserve Bank’s crypto ban.
Since then, crypto trading has grown in volume allowing India to take the top position globally in terms of crypto adoption. With this heightened interest, more individuals and private investors are considering cryptocurrencies as a viable investment.
Crypto exchanges are the logical first step for many looking to enter the market. These online platforms allow users to buy, trade, sell and store their crypto holdings. Users also have access to a variety of helpful material such as the latest BTC to INR prices, trade history and news articles.
Choosing the right crypto exchange will depend on a number of factors. Savvy investors look at the security features of an exchange, as well as its cost structure, geographical availability, reviews and cryptocurrency selection.
Read on to learn more about crypto exchanges and what makes a good one.
What Investors Need To Consider When Choosing A Crypto Exchange
1. Digital Safety
Exchanges process payments, store digital assets and are privy to your personal information for account setup. This makes them vulnerable to cyber-attacks and hacking.
Be sure to check that your crypto exchange of choice does everything in its power to protect itself and your assets. Exchanges offering Two-Factor Authentication (2FA) methods help to keep unwanted access to a minimum. 2FA requires you to enter a second form of identification, such as a password and a code which will be sent to your phone or email account.
Cold storage is another way for a crypto exchange to keep hackers at bay. Cold storage refers to offline depositories of crypto assets, which are less vulnerable to cyberattack. Read up on a crypto exchange’s cold storage policy or contact them directly.
Ensure that your crypto exchange complies with all local regulation and law. Crypto exchanges that don’t meet this standard are either out of the legislative loop or intend to scam you. Some crypto exchanges will go as far as offering insurance cover for any losses caused by a cyber breach.
2. Navigability And A User-Friendly Layout
Navigability and user-friendliness are important for traders looking to be on the site regularly, and for those new to crypto trading. Appealing user interfaces can make trades more intuitive and less daunting.
Many crypto exchanges cater to a wider market by offering both web-based and mobile platforms.
Consider the strength of a crypto exchange’s customer support. Exchanges that assist via live chat, email and a help centre are more likely to attract customers and solve issues.
New users and those looking for a refresher should also look at the educational resources available on their crypto exchange. Some exchanges offer guides, blogs, tutorials and courses on crypto trading, as well as demo accounts to learn without risking real money. Users interested in more in-depth learning should consider further education, such as trading courses and investment classes.
3. Trading Cost
Trading costs can significantly affect your profits. Traders that bear this in mind and understand the true cost of their trades are more likely to succeed.
Legitimate crypto exchanges will outline their trading costs openly and in an easy-to-understand format. Exchanges typically charge the trader a percentage of each trade. These fees can vary between 0.1% and 1%, discuss this with your investment advisor to make sure that the cost aligns with your overall investment strategy.
Consider the type of trading you intend on doing and then calculate your potential costs, before comparing exchanges. This will help you to compare the relative costs of each exchange in relation to your actual trading strategy.
4. The Cryptocurrencies On Offer
Select a crypto exchange that offers the kind of crypto tokens you are interested in. Large cryptocurrencies such as Bitcoin, Ethereum and Litecoin are available on nearly every crypto exchange.
Investors seeking access to more niche crypto assets, such as Initial Coin Offerings (ICOs) and smaller altcoins should make sure they are available on the platform before signing up.
5. Liquidity
Exchanges with high liquidity levels allow users to buy and sell digital assets without significantly affecting the market price. This makes exchanges with high liquidity more efficient, allowing them to offer investors better price structures.
6. Worldwide Access
Crypto exchanges can restrict access to certain countries and territories. It is important to check that your crypto exchange meets the regulatory requirements to operate in your country and lets you transfer funds from your currency to crypto and back again.
7. Honest Exchange Reviews
Reading user reviews and doing your own research can be helpful in selecting a trustworthy crypto exchange. Browse legitimate forums, social media posts and news sources for reports on positive and negative crypto exchange feedback.
In Summary
Choosing a reliable and cost-effective crypto exchange is critical for safe crypto trading. Spend some time reading reviews, visiting the FAQ section of the exchange and looking at the educational material that an exchange provides.
Make sure that the crypto exchange offers the kind of crypto tokens you are looking to buy and that it operates within local regulation. Check that you are happy with the exchange’s customer support structure, safety standards and user interface.
A good exchange should give you a real sense of overview, and confidence in your crypto trading. Get in contact with the exchange should you have any pressing questions.