Cryptocurrency has gained a massive following in the past decade, and most investors do not want to be left out. Most investors are now looking for safe crypto exchanges to trade cryptocurrency.
Crypto exchanges play the role of the marketplace and the broker, which contrasts with stocks where multiple brokers place orders on the same exchange. This means that the prices of crypto change from one exchange to another. The exchanges also differ in the types of coins they offer, the order types, the trading fees, and the spread types.
What Is A Cryptocurrency Exchange?
A crypto exchange is an online marketplace where investors trade cryptocurrency and other crypto-related tokens. The exchanges work almost the same as online brokerages where users deposit their fiat money, including Singapore dollars.
The funds deposited are used to purchase cryptocurrency. Investors can also trade their cryptocurrencies. For example, you can trade your bitcoin for Ethereum on the exchanges. Crypto exchanges allow you to earn interest on your assets held on the exchange.
Crypto exchanges are pretty popular since they allow investors to trade cryptocurrency with small capital. You do not need to have a lot of money to start trading on most crypto exchanges.
What Are the Pros and Cons of Investing in Cryptocurrencies?
- Protection from payment fraud
- Potential high returns
- Great liquidity
- Immediate settlement on international transactions
- High volatility
- Prone to black-market activities
- It is unregulated and unbacked
- Prone to cyber hacking
- Has no refund in case of a mistake
What Are the Key Considerations When Choosing A Cryptocurrency Exchanges?
Here are essential considerations you need to make before choosing a crypto exchange.
Security and Authenticity
The first thing you need to do is perform your due diligence to ensure that the platform you choose to go with is secure. There has been a recent incidence of international crypto exchanges getting hacked, which should serve as a severe warning to prospective investors to look for exchanges with high-security protocols.
One of the biggest challenges on crypto exchanges today is ensuring that they prevent fraud. The platform’s responsibility is to keep all the investors’ funds safe.
The Method of Purchase
Different cryptocurrencies have different methods of purchase. Some accept bank transfers, others accept debit and credit cards, while others use PayPal. Some solely use crypto for their purchases.
If you already do not own cryptocurrency, you can look for an exchange that accepts fiat currency while you enter the market before joining an exchange. You also need to note how long the purchases take before they are complete.
Other platforms process transactions immediately, while others take days and weeks. Always choose a platform that you are comfortable with.
Most crypto exchanges currently support Ethereum and Bitcoin, the most popular crypto token. Investors, however, know that the crypto world has much more to offer. Crypto exchanges such as Binance have a long list of crypto to choose from, while others, such as Coinbase, offer only four of the major cryptos.
You can also look for exchanges that offer stable coins, which most investors use to hedge themselves against the volatility of the crypto markets. Ensure that you choose an exchange that provides the crypto tokens you want to purchase regardless of your risk appetite.
Before settling one, you should also consider the crypto exchange’s market cap and 24-hour trade volume.
The Fee Structure
Crypto exchange’s fee structure and the transaction fee differ across different exchanges, which is crucial when choosing the exchange. Some exchanges offer discounted trading fees when using the exchange token to complete a transaction.
Other platforms charge trading fees on sales, while others permit purchases free of charge.
User Experience and User Interface
One of the vital aspects of a crypto exchange is its user interface and functionalities. You will need an intuitive and exemplary user interface, whether you are a beginner or an experienced crypto trader.
User experience is very different and entirely subjective. However, the crypto exchanges with the best user interface see the most significant volumes of transactions. So, make sure you go with a platform that you are comfortable using.
Best Cryptocurrency Exchanges in 2022
Gemini is one of the best cryptocurrency exchanges to use in 2022. The platform offers a clean and easy user user-interface. Some users complain that it lacks some features found in other platforms, making it easy to use.
Gemini is an excellent exchange for beginners looking to buy HODL crypto. The platform also offers a regular investment function where you can customize your investment frequency if you wish to.
It is also a friendly platform if you have a small capital and regular income to invest every so often. Gemini offers 53 cryptocurrencies which make up the blue-chip crypto in the market.
- The platform offers different features, including Gemini Pay, Gemini Earn, Gemini Custody, and Gemini Wallets.
- High security and insurance features focus on regulation and compliance to ensure that your funds are safe.
- Offers different options, including Auction Support, Direct buying, Advanced ActiveTrader interface, and Electronic block trades
- Large customer base hence high liquidity
- No withdrawal fees
FTX offers low trading fees compared to other cryptocurrency exchanges in the market. It is ideal for experienced traders. You can quickly deposit and withdraw SDG on FTX, and they also offer a wide array of more than 275 coins.
The platform offers spot trading where you can find other crypto tokens such as futures, derivatives, and NFTs.
- Low trading fees of 0.02% for makers and 0.07% for takers
- Wide range of more than 275 cryptocurrencies
- Various markets, including NFTS, spot trading, and futures
Coinbase is another popular cryptocurrency exchange globally and is a publicly listed company in the US. The platform offers more transparency while trading crypto, which most investors look for.
Coinbase does not offer the greatest number of coins like most crypto exchanges on this list. It only has 103 tokens on its lists which are among the best performing in the world. The platform has a fee of 0.5%, which is considered high by most investors.
- Safe cryptocurrency exchange
- A user-friendly platform and a mobile app as well
- Safe to deposit and withdraw
- Multiple security features, including the 2-factor verification
- Has the Coinbase vault that stores users’ crypto-token in cold storage
4. itBit by Paxos
ItBit is among the most accessible platforms to use when trading crypto. The platform features low trading fees and has few available currencies. It also has extensive APIS and custody services suited for large institutional clients.
- It is an OTC trading platform where one party can directly trade by cutting out the middle man.
- The platform has several security measures, which include:
- Multiple factor authentication requires users to have an authenticator app such as Google when logging in.
- Cold storage is where the platform store majority of the assets to protect them from hacking.
- Offers FDIC insurance.
Crypto-com is an excellent crypto exchange platform that supports over 25 cryptocurrencies. The platform also can stake over 40 coins. Users earn up to 14.5% interest in the staked coins, which can vary based on the lock-in period.
The app has an easy-to-use user interface, making it easy to buy and sell tokens on the platform. The platform also has live chat support that replies immediately, and if it’s busy, they will always respond in email.
- Offers the crypto-com visa debit card that has over 8% cash back on different purchases, including Airport Lounge access
- The platform owns CRO coins that help with staking on the platform
- Has over 250 cryptocurrencies
- Insurance cover in the cryptocurrencies
- Staking on over 40 coins and you can receive up to 14.5% APY
Crypto Exchange Cryptocurrency Trading and Withdrawal Fees
|Cryptocurrency Exchange||Trading Fees in %|
|FTX||0.07% (discounts if you hold FTX coins)|
|itBit by Paxos||0.35%|
How To Buy Cryptocurrency Through A Crypto Exchange
Here are the simple steps to follow when buying crypto through a crypto exchange platform:
Choose A Crypto Exchange
The first step is choosing a crypto exchange available in your country and accepting fiat if you are a beginner. There are many exchanges to choose from, and you can choose one with a business model that works best for you.
Create an Account and Verify It
Once you decide on the exchange, you will need to sign up to open an account with the platform. Most platforms require you to verify your identity, which helps prevent fraud and meet regulatory requirements.
Deposit Cash You Plan To Invest In
Before you start buying crypto, you have to ensure that you have funds in your account. You can deposit money in your account through a bank transfer or pay through your debit or credit card. Depending on your funding method and crypto exchange, you might have to wait a few days before using the money you deposited.
Place Your Crypto Order
Once you have money in your crypto exchange account, you can place your first order. Many crypto exchanges to choose from, including the most popular coins – Ethereum and Bitcoin. There are other obscure coins which include Holo and Theta Fuel.
When you decide the crypto to go with, you must enter its ticker symbol. For example, the Bitcoins ticker symbol is BTC and the number of coins you would want to purchase. You can buy fractional shares from many brokers and exchanges.
Choose A Storage Method
Exchanges are backed by protections such as Federal Deposit Insurance Corp (FDIC), making them prone to hacking and theft. When you purchase your cryptocurrency, here are the options you have on how to store your crypto tokens:
· Hot wallets
These wallets are stored online and on internet-connected devices. Hot wallets are convenient but are at risk of theft since they are connected to the internet.
· Cold Wallets
These are not connected to the internet, making them the most secure options for holding cryptocurrency. They are in the form of an external device such as a hard drive or a USB drive, but you have to be careful not to lose the device’s passcode or break the device since you may never get your crypto back.
What Makes Cryptocurrency Popular?
There are several reasons why cryptocurrencies are popular. Some of the reasons include:
One of the biggest reasons people prefer making crypto payments is the anonymity of its transactions. However, all the transactions are made transparent on a public ledger, meaning that the transactions can be tracked if you make several transactions and slip your personal information.
· Decentralized Network
Another reason cryptocurrencies have gained a lot of popularity is that they are not controlled by any government or authority, unlike the fiat currencies we regularly use. The crypto activities are made available on a public online ledger and operated on a peer-to-peer network. They are valued based on the cost of production, i.e., mining and demand.
· It Is Getting Easier To Use Cryptocurrency
The adoption of crypto payments has increased thanks to online companies accepting it as a mode of payment. Crypto debit cards are also becoming more accepted today.
As cryptocurrency becomes more common, more people want to learn about it making it more desirable.
Paying for items with cryptocurrency is much safer than using the traditional modes of payment. If you are among the many people worried about cyber security, deciding the cryptocurrency to use might be a good idea.
What Are the Type of Cryptocurrencies Available?
There are four main types of cryptocurrencies. They include:
Bitcoin was the first-ever cryptocurrency to be created, and it remains the most popular crypto asset in the market today.
These are all the other crypto coins that were created after Bitcoin. They include Litecoin, Ethereum, Dogecoin, and Ripples. Any cryptocurrency that is not Bitcoin is considered an Altcoin.
Stable coins include Tether (USDT and USD Coin (USDC), which are cryptocurrency coins designed to be less volatile than the typical crypto coins.
They are used by investors and traders as intermediary coins when switching from crypto to crypto or from one exchange to another.
· Shit Coins
These are cryptocurrency coins that have been created and might have no value or purpose.
What Is the Difference Between Cryptocurrency and Digital Currency?
Digital currency is a currency that exists in electronic form. It includes contactless credit card payment methods such as PayWave and PayNow and bank transfers.
On the other hand, cryptocurrency is also regarded as a form of digital currency, but the difference is the encryption. So cryptocurrency is a form of encrypted digital currency.