Four Essential Tips to Keep in Mind when Choosing a Bitcoin Exchange

If you have decided to jump into the digital currency wagon, knowing how to buy bitcoin is the first step to take. Then, you will have to pick the right bitcoin exchange such as Canadian bitcoin exchange Quebex. Before you can be sure that you make a good, you will have many questions that need to be answered. Depending on factors such as your needs, trading volume, country, and security, you can pick an exchange that suits your requirements. When choosing a cryptocurrency exchange, keep the following tips in mind:

Take Time Learning More about the Exchange

It’s important to learn information like the exchange’s location, the name of its founder, and the market they concentrate on. In a lot of countries, Bitcoin is not regulated; however, things are changing. As more and more people use Bitcoin, governments may seek a degree of control over digital currency transactions. Thus, the location of the exchange dictates the laws it has to comply with. Also, knowing about its founder can be a good lead to its reputation.

Look Into Its Security Protocol

You must do your research and make sure you are picking a legitimate and secure platform. In the cryptocurrency world, one of the main issues centers on pump-and-dump schemes.  Exchanges should be able to prevent fraud. Check if the exchange has been hacked before. Ensure it offers two-factor authentication, sends confirmation emails after every transaction, and keeps its deposit in cold storage.

Learn about their Coin Pairs

If you only want to swap Bitcoin for U. S. dollar and vice versa, you can pick any exchange that offers this service. However, if you want to build a portfolio of different coins, you must look a bit harder. The big exchanges can demand high listing fees, so you might want to pick small exchanges. For Bitcoins, it is fine to use a big exchange and some small exchanges for trading lesser coins.

Consider Its Liquidity

Liquidity is the main reason you may not want to use small exchanges. These exchanges tend to have less liquidity. Because they only have fewer users, they will have fewer buyers and sellers. With them, you might need to wait to complete a transaction or accept a price which is higher or lower than you would like. You should also know that exchanges may not advertise their liquidity’s size. Rather, they boast about how many traders they have. The platform with more buyers and sellers has more coins available, making trades easier.



Recommended For You

About the Author: Paul Petersen