How to invest in cryptocurrencies exchanges as a beginner
Interestingly, Bitcoin trading did not start with crypto exchanges but with P2P platforms, followed by over-the-counter exchanges (OTC) portals. The first cryptocurrency exchange was launched in 2015; it isn’t exaggerating that these platforms are relatively new to the cryptocurrency trading and investing industry. On the other hand, a crypto exchange has become the go-to place to trade and invest in cryptocurrencies thanks to its advanced dashboard and multiple investments and trading options. There has been dramatic growth in crypto exchanges in the past seven years, and there are many good reasons for this.
For trading and investing in crypto, there are over 600 crypto exchanges today, and the numbers keep growing. Each exchange has fees, terms, and conditions, even though the basic dashboard is usually the same. If you plan to invest in crypto, you may find only some crypto exchanges suitable. It is good that some pro tips will help you find a reliable crypto exchange that is compatible with your crypto investing goals.
Decentralized or centralized
It is important to know that there are two types of crypto exchanges if you are new to trading or investing in crypto. It is the responsibility of centralized exchanges to keep users’ funds safe. A centralized hack is the best option if you’re looking to trade or invest in crypto in a highly regulated environment and don’t mind waiting for KYC checks and paying high fees. However, centralized exchanges are frequently vulnerable to hacks. If, on the other hand, you prefer a relaxed environment for investing in crypto and are fine with not-so-fast processing speed, DEXs are the platform for you.
Assets of your choice
Check that the crypto exchange you choose supports your chosen altcoin before investing.
Each activity on a cryptocurrency exchange is subject to a fee, including trading, depositing, withdrawing, etc. However, the fees can differ from exchange to exchange. Therefore, it is recommended that you take a survey of at least five to six exchange fees. The study would be useful to find out which online brokerage firm charges the most competitive fees for investing in cryptocurrencies.
Quotient of security
When trading and investing in crypto with a crypto exchange, it is important to keep this in mind. Crypto scams and hacks reached an all-time high in 2021, resulting in a loss of at least $14 billion.
Trading and investing in crypto would generally be safe and comfortable if a trusted crypto exchange used advanced security mechanisms. Therefore, selecting a crypto exchange with all the latest security features, such as cold wallet storage and dual-factor authentication, is important.
It is also a good idea to ensure your exchange is insured if it is hacked since it will compensate you for the lost funds.
Crypto investors often need to remember to check out this pointer while investing in crypto exchanges.
The majority of exchanges out there cater to foreign investors. However, they still accept investors from some countries. The exchange you find online does not accept traders or investors from your jurisdiction. In other words, you must determine whether your chosen cryptocurrencies exchange accepts traders and investors from your state.
Dashboard for users
To ensure a welcoming environment for investing in crypto, choose an exchange that provides a user-friendly dashboard that’s easy to use.
It would be best if you looked for exchanges with a separate dashboard for beginners and a section for seasoned investors and traders.
Providing 24/7 customer service
Whenever a crypto exchange offers round-the-clock customer service, you know that you can trust it. Before investing in crypto with that exchange, call the exchange number at odd hours to see if anyone answers. You might not receive dedicated attention if it’s an animated voice. However, if there is a human on the other end of the phone, you can be at peace.
There are quite a few tips that will help you to choose the right crypto exchange. Below are some additional tips for every crypto trader and investor.
- Investing in crypto requires creating accounts on various exchanges; you should not stick to just one.
- When investing in crypto, always invest in Bitcoin
- When investing in crypto, make sure to hold at least 2-3 cryptocurrencies to create a diversified portfolio
- As you gain experience with crypto investing, you can allot up to 5% to 10% as your investment capital increases.
- Store the majority of your funds in your cold wallet rather than in the exchange wallet
- Even your closest friends should not have access to your account and wallet information.
- When using public Wi-Fi, do not operate exchange account/s.