How to Choose a Bitcoin Platform

Only a few years ago, crypto trading was deemed more suited to risk takers than ordinary people. But crypto platforms have evolved, crypto has come to be accepted more widely as an asset, and blockchain has a reputation of being safe while finding favor with many users for its decentralized nature. There is an inflow of crypto exchanges, and it is recommended that you take the time to select a trustworthy platform for trading. In this article, we will look at the factors to consider.

Safety and Security

The hacking of crypto exchanges makes it vital to choose one with the best security protocols to prevent crypto crimes. Although, hypothetically, any platform can be attacked, you would expect the one you select to be as safe as it is possible to be. Check if an exchange you are considering has two-factor authentication, possibly biometrics for logging in, and use the Know Your Customer standards. Some platforms offer a ‘bounty’ for legitimate users to report any vulnerabilities that they pick up. 

How Many Cryptocurrencies Can Be Traded?

Many platforms offer users more than one type of crypto, such as BTC and ETH, for buying, selling, and even exchange crypto for other coins. The total number of crypto options currently in existence exceeds 20,000. Additionally, there are other offerings that may appeal, such as leveraged tokens, futures contracts, and ETFs.

Sometimes, if you want to focus on one specific crypto, for example, BTC, then choose a platform that supports a Bitcoin-only broker, like Swan Bitcoin or River. You can compare the two in this Swan review.

How Fees are Structured

Fees are attached when you make a crypto transaction, such as performing a trade, making a transfer, or withdrawing crypto. Fees are usually based on your trading volume over the preceding month. You will pay less for fees if you trade more. Crypto transaction fees are in the region of 0.2% or less. However, some exchanges charge more, so you need to check this.

Crypto Liquidity

Cryptocurrency liquidity refers to how easily you can exchange fiat into crypto and crypto into fiat without affecting the asset price in a big way. This means that transactions are cost-effective and easily accomplished. You can gauge this from an examination of the exchange’s trading volume in the previous 24-hour period.

Licensing

The platform must have the authority to carry out its business in your geographical area. Fiat exchanges have a high level of regulation. As crypto platforms are newer, they have not been fully regulated yet. However, efforts are underway to rectify this. Check that there is a record of the platform having been audited via the Service Organization Control.

Insurance Policy 

Some crypto exchanges have taken out insurance to protect their users in the event of hacking being successful. Some of these exchanges are insured for $250 million or more. Establish to what extent an exchange covers your assets. 

Rewards

An exchange may reward users for keeping their assets on that exchange. You may also be rewarded when you stake tokens or by cashback programs. Compare the rewards offered by any crypto exchanges you are thinking of using, such as how frequently you will be paid interest. If you wish to withdraw your assets, determine how much you will be penalized. 

Finally, read reviews of exchanges when making your decision.

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