The process of buying cryptocurrencies has become relatively easy nowadays, but the most confusing thing is to choose a secure platform to buy crypto tokens. Investing in cryptocurrencies starts by choosing the trustworthy crypto exchange that allows trading various cryptocurrencies. Crypto exchanges are the marketplaces that facilitate users with a variety of cryptocurrencies that they can invest in.
Four steps are there to get involved in the buying process of cryptocurrencies: picking the suitable crypto exchange, funding your exchange account, buying crypto coins, and then choosing a storage method to store your cryptocurrencies. You can earn a profit out of bitcoins like this auto trading bot.
Here in this article, we will discuss the first step to pick the crypto exchange. It would be best if you considered several factors before finalizing any crypto exchange. Let’s discuss the factors that are important to consider:
Comply with AML and KYC norms
Investors who want to invest in cryptocurrencies have to start by opening an account with the exchange. But only opening an account isn’t enough as investors have to go through various formalities as the bank does.
In addition, reputable crypto exchanges require new users to comply with Anti-Money Laundering and Know Your Customer norms to verify their identity. It gets done to prevent any illegal activity by users or customers.
But the critical thing to note down is that not all crypto exchanges follow AML and KYC norms. Therefore, it is best to select the crypto exchanges that follow all formalities as it gets majorly done to avoid financial crimes and protect users’ identities and funds.
Though exchanges are online marketplaces, all users need to know about the base location of exchanges. Thousands of crypto exchanges are available online, but it is best to choose a crypto exchange that is either home-based or local. Home-based crypto exchanges offer their users a fantastic benefit through this.
Users can save the currency exchange cost and purchase or convert cryptocurrencies in their local currencies anytime. In addition, local crypto exchanges will provide you with details of all cryptocurrencies, and you can confirm or take advice from them before making any decision.
Like banks or financial institutions, no crypto exchange works for free. All the crypto exchanges have their fee structure that differentiates based on location, various cryptocurrencies, and other facilities. Also, the fee structure keeps on changing a bit according to new features or facilities offered to customers.
Some exchanges only charge transaction fees which some charge additional fees for offering extra features to users. Therefore, it is essential to compare the exchange fees of different exchanges and know about buying and selling cryptocurrencies in exchanges. Investors must make sure to evaluate different costs before finalizing any crypto exchange.
As discussed above, the second step involves funding your crypto exchange account. Finally, investors need to choose the payment method to add funds to their crypto exchange account.
All exchanges offer different payment methods, but the main methods involve UPI payments, debit or credit cards, wire transfer, or bank transfer. Investors must make sure about the level of privacy that they get with each payment method. Only a few crypto exchanges allow making crypto purchases with cash.
Variety of coins
Investors must know about the variety of coins that crypto exchange deals in and how fast it adds new crypto coins. Some exchanges aren’t concerned about adding new crypto tokens, which is a significant disadvantage for investors. It is best to choose a crypto exchange that deals in at least 50+ cryptocurrencies. Along with the exchange must be fast enough to abandon the ancient crypto coins.
Order book volume
The exchanges that release order books ensure transparency, and this is an indication to know that crypto exchange is reliable. Users who understand trading cryptocurrencies understand the term order book. It is a list of the entire buy and sell orders that have to take place on a crypto exchange.
If the order book is strong, more people use exchange services, and exchange offers liquidity to all its investors. On the other hand, the exchanges that don’t release or are transparent about order books means that the exchange is illegal.