7 Qualities of the Best Crypto Trading Platform
Ever since the launch of Bitcoin in 2009, everyone is in a scramble to learn more about cryptocurrencies and invest in them. As the crypto bubble continues to grow, more and more people are beginning to ask about crypto trading platforms and how to choose the best one.
Since cryptocurrency cannot be bought from a bank or an investing company, an account needs to be created on a crypto trading platform to trade in it.
Investors utilize risk ratios such as alpha and beta to calculate, compare, and forecast returns. What is the Difference between alpha and beta in trading? Beta is a historical measure of the systemic risk or volatility of an asset or portfolio compared to the volatility of the market as a whole. Alpha is a statistic for comparing the risk-adjusted performance of an investment relative to a market index. Alpha measures risk-adjusted returns, whereas beta gauges hazards.
This platform, also known as digital currency exchange (DCE) is a marketplace where investors can buy or sell cryptocurrency. It also allows you to trade one crypto for another or fiat money. You can buy crypto using regular currency or trade it back into regular money.
Here are 7 essential things to look for in crypto exchange and safeguard your investments:
Security
Due to the lack of any government regulations or the presence of any intermediaries, people are always wary of cryptocurrencies and investing in them. To protect your investments and prevent them from hacks and frauds, some exchanges have put stringent security measures in place.
These include two-factor authentication, cold storage, and encryption. Another sure shot way to know more about the exchange’s security protocols is its reviews. Read reviews on Reddit or platforms such as Coinswitch or Coinbase.
Accessibility
Not every government and country allows for crypto trading. Certain location-specific regulations may prevent you from trading in it. For instance, China has banned its citizens from using crypto exchanges. Other countries, on the other hand are friendlier, and allow crypto trading.
The information about the geographic availability of the exchange is available on the respective exchanges’ websites.
Fee structure
This is one of the most important qualities to consider. Every time you trade in a particular cryptocurrency, a percentage of your investment is deducted by the trading platform. A higher fee means lower profits.
Contact the trading platform to know the fine print of the fee structure so that you are aware of what you will be paying for each transaction.
Purchase method
Every crypto trading platform has different methods of purchasing cryptocurrencies. For instance, some may require payments through credit or debit cards, PayPal, and some even require you to have crypto to make a purchase.
Choose a platform that suits your convenience. Also, get to know how long does the purchase take to materialise. While some may allow instant purchases, some may take days or weeks.
Supported crypto
Not everyone wants to stick to buying Ethereum (know Ethereum price INR before investing) or Bitcoin. While these two popular cryptocurrencies feature on almost all trading platforms, you may want to look at options. For instance, Binance features a wide range of currencies while Coinbase lets you trade in only four cryptos.
Depending on how much you want to diversify your portfolio and reduce your risk, you can also look for platforms that trade in newer coins such as Ripple. Know Ripple price in India before trading.
Complexity
Whether you are an experienced investor or have just started trading, what helps is a simple yet intuitive interface. It allows you to make better decisions and make the most of your investments.
A big plus is how educational is the platform i.e. it should allow investors to learn more about the crypto markets. They should have whitepapers, videos, quizzes, and journals.
Liquidity
This is one of the most important qualities of a crypto trading platform. This means that if you plan to trade, buy or sell your crypto, your trading platform must have enough trade volumes to allow you to do so. Often the largest platforms are those with the most volumes.
If a platform doesn’t have enough liquidity, you may end up paying a higher price than you should.
Besides these, you should also consider factors like customer service and functionality on different apps. Take your time in understanding an exchange before you start trading full-time.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect those of Geek Vibes Nation. This article is for educational purposes only.
Caroline is doing her graduation in IT from the University of South California but keens to work as a freelance blogger. She loves to write on the latest information about IoT, technology, and business. She has innovative ideas and shares her experience with her readers.
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