Cryptocurrency trading platforms
Now that cryptocurrency is heading into the mainstream, it’s becoming much easier to trade. Even so, it’s still important to choose your cryptocurrency trading platform with care. Here are the seven key points you should check when choosing a cryptocurrency trading platform.
When assessing a cryptocurrency trading platform, the very first point you want to check is its security credentials. There should be information on the site about this. Make sure you understand what it actually means in practice.
For example, if a site talks about using a certain security protocol make sure you understand why that protocol matters. Also, do some internet searches to see what experienced cryptocurrency investors think of the site. If you don’t understand something you read, then head to a cryptocurrency forum and ask. Generally, people are happy to help.
Cryptocurrency trading platforms currently operate in one of three ways. These are peer-to-peer (P2P) platforms, trading platforms, and brokers. With peer-to-peer platforms, users buy and sell between each other. The platform will typically lay down some rules and guidelines for the interaction. Overall, however, they will tend to leave users to their own business.
With trading platforms, users buy from and sell to the platform directly. They do not interact with each other for trades. Some of these platforms have “community” sections where users can interact with each other but these are separate.
Brokers operate in much the same way as trading platforms. The key difference between them is that brokers deal with transactions consecutively. In other words, a transaction comes in, they deal with it, then they move on to the next transaction. Trading platforms deal with transactions concurrently (at the same time).
Its deposit and withdrawal options
Firstly, you need to know what deposit and withdrawal methods the cryptocurrency trading platform supports. Secondly, you need to know the standard and maximum processing times for each option. As always, it’s advisable to make sure that you are totally clear on these. They can vary widely between platforms and options.
Its fee structure
It’s important to be clear on what you’ll be charged. At the same time, however, it’s advisable to remember the difference between price and value. In other words, sometimes it’s worth paying a little more for a better overall user experience.
Its customer service
A great customer service team is a bit like a great insurance policy. You hope you’re not going to need to use it but it’s reassuring to know that it’s there. Check the contact methods, opening hours, and response times (average and maximum). Also, check to see what other people think of the customer service.
This is totally subjective but also very important. The “look and feel” of a cryptocurrency trading platform has to work for you. If it doesn’t then you won’t use it or at least not comfortably.
The cryptocurrencies it supports
As a rule of thumb, mainstream cryptocurrency trading platforms will support mainstream cryptocurrencies (not just bitcoin). They may support some of the more niche options. If you’ve really set your heart on trading more niche options, it may be better to use a more niche cryptocurrency trading platform. Just be sure to check it out carefully.