Ready to start trading cryptocurrency? If so, the first step is finding the best trading platform (or platforms). Many platforms are available and, although some are bigger and more popular than others, no exchange is widely considered to be “the best”.
Each trading platform has certain pros and cons. What works for some on one platform may not be ideal for others. This Cove Market overview provides a good look at some of the features the major players have.
As a trader, you might look for specific elements based on your funds, trading style, interests, and other requirements that are unique to you. However, some issues are universal and every trader needs to think about them. Here are five factors everyone should consider when choosing a crypto platform.
1. Availability
There is a saying in sports that goes, “the best ability is availability”. This principle applies to the world of crypto trading as well. Different countries around the world and even different states within the U.S. have different rules and regulations involving trading of cryptocurrency. Because of this, some platforms are not allowed in certain areas.
The first thing you need to determine in a crypto trading platform is if its use is allowed in your area. Some countries have tried to ban crypto trading outright; others forbid specific trading platforms. Some states, such as New York, have taken a hardline with some trading platforms. As of the beginning of 2021, the popular Kraken exchange is still not accessible to users in this state.
On most trading sites, it is relatively easy to find out if a platform is available in your area. Look for a FAQ page or a list of places where you can trade from. Just make sure to look before you start signing up. Some platforms will let you sign up in order to collect your info, then tell you it’s not available afterward.
2. Security
One of the main reasons people love cryptocurrency is that it is nearly unhackable. The platforms and exchanges traders trade on, however, can be vulnerable to cyberattacks. Make sure the exchange you choose has a long, solid security record before you make your first trade.
If not, you may face the worst-case scenario that happened to traders who used the world’s most popular platform in 2014, Mt Gox. This platform was handling 70% of the world’s crypto trades at the time, but in February of that year the site suspended trading, announced it had lost around 850,000 Bitcoins, and declared bankruptcy. The majority of this Bitcoin has still not been recovered.
While most major exchanges have been the target of hackers over the past few years, most of the best platforms have been able to ward them off with little to no damage or stolen crypto. Do some research before you use a platform on its security record to make sure you are using one of the more secure ones.
3. Privacy
Privacy differs from security and is another big factor that draws people to crypto. This term refers to how anonymous you are while using a crypto exchange. Because cryptocurrency is decentralized, it is possible to have your crypto transactions and ownership be untraceable back to you. For some people, this is very important.
For complete anonymity while trading, you really need to use a decentralized trading platform but those are not easy for a novice or even intermediate traders to use. When using a major platform, you will be giving up some privacy. However, it is important to know that some platforms are more private than others.
Most trading platforms require at least an email and a physical address along with your name and some other very basic information. Some places make you verify this with documents like IDs while others do not. Some platforms go a step further and adhere to strict know-your-client (KYC) policies that require a higher level of verification. If you highly value your privacy and anonymity, you may want to steer clear of these platforms.
4. Reliability
When you want to trade, you want to trade. What you don’t want is for the site to be down or experiencing slowdowns or outages. Check out what platform reviews say about how the exchanges handle days with high trade volumes. Some places will handle it fine while others may leave you unable to trade because of limited operating system capability.
If you are an around-the-clock trader or someone who likes to trade at popular times, reliability will be especially important to you. Even if you are a casual trader, though, you don’t want your preferred platform to go out of commission when you need it most, so make sure you check on the platform reliability from the outset.
5. Ease of deposit and withdrawal
There isn’t much of a point trading crypto if you can’t convert your fiat currency into crypto easily or if you can’t convert your crypto back to cold, hard cash. This is why you need to consider how easy it is to make deposits and withdrawals from any crypto sites you are considering.
Determine what currencies they accept and in what currencies they allow withdrawals. You also want to know if you are allowed to take your cryptocurrency off the platform and put it in your own crypto wallet or if it is required to stay on the platform-provided wallet. The easier the exchange makes deposits and withdrawals, the better and more flexible it is for you to use the platform.
Conclusion
Picking the right crypto trading platform for your needs is as much of an art as it is a science. Every trader may have different requirements. As long as the platform offers availability in your area, security, privacy, reliability, and makes deposits and withdrawals easy, it is probably a site worth considering for most new traders.
Source: Plato Data Intelligence: Platodata.ai