How to choose a cryptocurrency exchange

Before you start tradingcryptocurrencyWhether you're trading or investing in one, you need to choose an exchange wisely. The right choice will help minimize mistakes, protect against potential financial losses, and allow you to enjoy the process. In this article, we'll explain what to look for when choosing a trading platform.

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Commission

An important factor when choosing a crypto exchange is reasonable fees. For example, Coinbase is considered one of the best trading platforms due to its simple cryptocurrency investment process. As of April 2022, it was the second-largest cryptocurrency exchange in the world.

A major advantage of this platform in terms of payment methods is the ability to accept bank cards. However, Coinbase's services are expensive, making them unacceptable for many beginners.

In addition, you need to know that there are several types of commission.

Deposit fee

Most exchanges do not charge a fee for bank transfers, but they do charge a fee for card deposits:

• for example, Coinbase charges 3.99%;
• The largest crypto exchange by transaction volume is Binance - 2%;
• And here is the automated trading bot Quantum AI, the best Bitcoin exchange with artificial intelligence, everdoes not charge a commission.

Trading commission

In some cases, a registered user must pay a commission to the exchange to begin trading.

• Coinbase charges 1.49% on every trade (meaning you're charged this percentage when you buy cryptocurrency and then when you sell it).
• Binance - only 0.1% of the amount 
• You can buy and sell crypto on Quantum AIno commission

Security 

The chosen platform must have the appropriate licenses and undergo external audits. This guarantees transparency and protects clients from fraud.

For example, Coinbase, founded in 2012 and headquartered in San Francisco, California, is licensed to operate in many US states and became the first crypto exchange in the world to be listed on the stock market.

Binance holds the internationally recognized ISO/IEC 27001 security accreditation. The company received this accreditation following two external audits of its information security systems.

The Quantum AI trading robot's website is secure.SSL certificate, ensuring the security of platform users. The technology encrypts data and sends it for storage on a secure server.

Exchange reputation

To protect yourself and your capital, it's worth looking for information about whether the exchange has been subject to hacker attacks, whether there has been a leak of user data, and whether there are any complaints about the trading platform.

By and large, no crypto exchange can guarantee 100% protection of its clients' funds, since networks and computers that cannot be hacked do not exist.

Even reputable trading platforms have their share of problems. However, crypto exchanges that survived hacked user accounts, managed to cover their losses with insurance premiums, and regain their customers are worthy of trust.

Based on this, it is better to give preference to well-known platforms: they have more income, part of which is used to improve the security system, ensuring an improvement in the company's reputation.

Methods of depositing and withdrawing funds

The number of withdrawal and deposit options can confirm a company's reputation. The more options, the more convenient the exchange is to use.

As a rule, popular payment systems do not work with trading platforms that have been involved in illegal activity or have received verified customer complaints.

Methods of account replenishment

Thanks to the digitalization of payments, there are a variety of ways to deposit funds into your account. The ideal option for instant deposits is by card (cashless) or using an e-wallet (PayPal, Skrill, etc.).

As a reminder, PayPal has been fully operational in Ukraine since March 17, 2022.until June 30Ukrainian users are now able to transfer moneyno commission. 

Cryptocurrency withdrawal times

Some platforms only allow withdrawals once per day. Or, like on BitMEX, they only allow withdrawals within a certain period. To ensure withdrawal processing time doesn't become an issue if you need money urgently, it's worth researching this in advance.

List of available cryptocurrencies

Bitcoin is the most popular cryptocurrency. However, it has recently been experiencing significant volatility: over the course of 2022, Bitcoin lost 46.8% of its value, and the crypto market capitalization fell to $1.18 trillion in May. Experts believe one of the main reasons for this currency's prolonged decline is Russia's military invasion of Ukraine.

But the crypto world doesn't rely solely on Bitcoin; it's constantly evolving, changing, and improving. Therefore, beginners are advised to choose exchanges that offer a wide range of different digital assets—ten or more. After all, the more currencies offered, the more opportunities for trading and investing.

There's just one caveat: if a platform lists dubious coins, a trader working there runs the risk of investing in a token issued by scammers. So, beginning traders are better off working with the more well-known cryptocurrencies and currency pairs.

• Binance offers over 600 cryptocurrencies
• Quantum AI — over 100 different crypto pairs
• Coinbase supports 40+ types (the exchange is constantly adding new assets, but it does so very selectively)

Asset storage security

Cryptocurrency services cannot yet compete with banks in terms of security and ease of use due to the fact that the industry is not yet sufficiently developed.

Currency purchased on an online exchange can be storedin two ways:

• on the crypto exchange
• on a cryptocurrency wallet

Method 1

When creating an account, the user gets their own wallet. It supports all coins traded on the exchange, allowing access at all times, allowing them to sell and purchase additional amounts as needed. This option is suitable for working with licensed platforms. One of the advantages of this cryptocurrency storage option is the ability to easily restore access to your account.

But by and large, no major trading platform has escaped hackers' attention. Even the heads of major exchanges are urging people not to deposit funds on them.“Please do not store more cryptocurrency on exchanges than you need for trading.”" , Kraken CEO Jesse Powell wrote on Twitter.

Not to mention unlicensed platforms, whose level of protection against hacker attacks is minimal. Therefore, storing your assets on such an exchange is entirely at your own risk.

Method 2

A more secure way to store assets is in a cryptocurrency wallet. However, this requires certain knowledge and experience, making it unsuitable for many beginning investors. We'll discuss wallet types in one of our future articles.

Difficulties with storing digital currency in a wallet often prevent newcomers from entering the market. Aware of this, some crypto exchanges offer secure storage of user funds directly on the platform.

Interface 

The trading platform's user-friendly and intuitive tools simplify the onboarding process for new traders. The accessible interface helps prevent technical errors that could lead to loss of funds.

This is extremely important during periods of sharp price fluctuations, when a trader needs to make quick decisions, for example, to sell or buy a depreciating asset more profitably.

Tools

Stop order

It's worth finding out whether you can place a stop order on the exchange. This is an order that allows you to buy or sell cryptocurrency when its price reaches a certain level.

Stacking

Some exchanges (Coinbase, Kraken, KuCoin, Poloniex, and others) allow traders to earn passive income (from 1% to 15% or more) for storing coins. However, profits from staking are not guaranteed: any profits can be lost if the price drops.

Marginal leverage

Seeking quick profits, some novice traders look for crypto exchanges that allow trading with margin leverage. This is an amount the platform lends against the user's capital. The risk is that if the borrowed amount is lost, the trader also loses their own funds: the exchange takes the collateral to pay off the debt.

Registration conditions

Any financial transaction requires a responsible approach. Therefore, it's important to carefully review the terms and conditions of registration on a crypto exchange.

For example, the platform may not offer services to users from your country. Or trading may only be available after you complete KYC verification. This same requirement is often required to withdraw funds.

Let us remind you that the Binance exchange has provided Ukrainians who have evacuated to EEA countries with the opportunityfree registrationBinance Refugee Card cryptocurrency cards. They allow you to convert, transfer, and make purchases at over 60 million merchants that accept online payments.

The popularity of cryptocurrency and its potential

Judging by the development trends in the digital financial asset industry, crypto's popularity is growing, and overall demand for it will continue to grow. Users are adding this new asset class to their investment portfolios and actively acquiring cryptocurrency for blockchain transactions.

It has become an effective way to provide financial assistance to Ukraine in the war against Russia. A foundation was even created to collect donations to support the army and the civilian population affected by the war.state cryptocurrency fund.

Thanks to the Ukrainian crypto exchange Kuna, donations can now be accepted in 25 virtual currencies. This marks the first direct collaboration between a cryptocurrency exchange and a government-owned financial institution.

Binance donated $10 million to support Ukrainian refugees, and Binance Charity launched a cryptocurrency crowdfunding site, the "Ukraine Emergency Relief Fund," which raised nearly $1 million.

You can read more about how cryptocurrency is helping Ukraine here.link.

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