How to Choose a Bitcoin Exchange?
When you’re new to the world of Bitcoin, it can all seem a little bit overwhelming when you’re trying to find the perfect exchange to buy, sell and trade on. Knowing that Bitcoin is complicated enough without having to work out which is the best cryptocurrency exchange, we’ve provided a helpful list of what to be on the look out for. Consider each of these points before you make your decision. Ultimately, you want to be as safe as possible during a Bitcoin transaction, and this can only be achieved on a safe and secure platform.
Firstly, before we get into the facts, it’s essential for you to understand why you’re looking to invest in Bitcoin in Canada. Is it because the BTC to CAD rate is set to rise? Or is it because you saw a Bitcoin calculator and the 1 BTC to CDN rate has room to move? Whatever your reason, the next step is choosing a Bitcoin exchange to earn your slice of the pie.
Be aware of the country of origin
Whether you’re located in Toronto or Taiwan, it’s crucial that you choose a platform that’s closer to home. If you’re in Canada, this means it’s beneficial for you to select a Canadian platform such as CoinSquare or Quadriga CX. The reason for this is that you’ll be more familiar with any laws surrounding cryptocurrency, as well as being able to contact customer service with ease should you have any problems.
While there aren’t many laws surrounding Bitcoin as it’s decentralized and primarily run by the people, there are countries that aim to make it harder to invest, such as China which has higher trading fees. If you’re not sure which exchanges are available in your country, do a quick search on the internet. You’re sure to find the one you’re looking for.
Check out the fees
Not every exchange is created equally. In fact, many boast lower fees than any other – such as CoinSquare – while others penalize you with high fees when you buy small amounts, and high fees when you buy any amount at all. The key is to be aware of what these charges are and make your decision accordingly. Of course, don’t be conned into using undesirable exchanges by the lure of low fees. Ensure it’s safe, secure, and is a well-known and reputable exchange at the same time. If you’re unsure, check the Better Business Bureau or ask any friends or family who are investors what they use.
How easy is it to use?
If you’re new to Bitcoin investment, using an exchange that’s easy to navigate should be at the top of your list. The platform you decide to use should be quick to load, should support mobile devices for investing on the go, and should have a fully responsive website with Android and iOS apps as well.
Good customer service
Cryptocurrency is decentralized which means individuals rather than corporations run it. However, this doesn’t mean you can’t have support when you need it. When you’re new to cryptocurrency investment, it can ease your mind to know there’s help close by. Aside from choosing a platform that’s in your own country, it’s helpful to pick one that offers excellent customer service. This could be in the form of live chat, quick-response emails and phone calls. If you can’t find contact information or a forum on any exchange to get help from, try and find one that does have it.
Safety and security to the fore
As Bitcoin, and cryptocurrency in general, becomes more and more valuable, it becomes all the more crucial to choose a platform that’s safe and secure. Many exchanges are continually fighting a battle against hackers, hackers that can drop the price of the Bitcoin to profit from it. Therefore, when you’re looking for a safe and secure platform, ensure it has the following:
- 24/7 cryptocurrency wallet monitoring
- Proof of reserve
- Email and SMS alerts
- Two-factor authentication
- Cold storage for funds
It’s also recommended that you keep your Bitcoins in your private wallet, except for those you intend on trading.
Pay attention to liquidity
When you first become a Bitcoin investor, liquidity might be the last thing on your mind, but it doesn’t make it any less important. Remember, Bitcoin is traded on a market that is used by both buyers and sellers. This means that when vast amounts of cryptocurrency are sold, there’s a risk of the price dropping. The more buyers and sellers there are, the more liquidity there is on the market. You can find out what kind of liquidity an exchange has by looking at the volume of buyers and sellers. The goal is to be able to buy or sell cryptocurrency without other users affecting the price tag.
Each exchange offers different payment methods, and not all may be suitable for you. Firstly, you need to figure out how comfortable you are with any given payment method. Do you wishonly to use your credit card? Or are you satisfied with cash or wire transfer as well? Once you’ve established which payment method works for you, choose a safe exchange that supports it.
Knowing how to choose a Bitcoin exchange is not a one-step process. If you’re looking to invest a substantial amount of money, it’s essential you understand the inner workings of the exchange to establish whether it’s a good option for you.