Ten years ago now, people had no idea that cryptocurrencies would transform into a prosperous financial market. Bitcoin, the first-ever cryptocurrency, was developed to revolutionize the current financial system. It gave rise to thousands of altcoins that were derived from bitcoin and ethereum.
The best crypto exchanges are secure platforms where crypto traders can dabble in trading to gain profit based on their skills and capabilities; it’s also a great way to invest in the crypto market if you have some basic knowledge of how it functions on a regular basis.
There are two different types of crypto exchanges in the world:
- Centralized
- Decentralized
Both of these are quite popular among professionals who spend every day of their life trading profitable crypto pairs to see a profit. Each of these exchange platforms offers a limited selection of well-performing crypto assets, cross-pairs, and functionally secure exchange wallets that would be utilized for trading and holding funds that can be easily deposited/withdrawn at will. Centralized ones are considered more protected than decentralized ones.
Before you invest in crypto exchanges, it is important to have a common understanding of its various types of fees, working models, and other functionalities. Fees involved with a crypto exchange are often found to be slowly eating away traders’ profits. This is why people must choose the best cryptocurrency exchanges to invest in through proper research and mindful comparison between several options. Or else paying a couple of dollars extra for each transaction might end up costing traders a lot in the end. In the following, we shall learn about cryptocurrency exchanges fees and how they must be taken into account before investing.
Things to look out for
When you are doing an online search for the best cryptocurrency exchange platforms, it might seem a bit too confusing to compare direct fees due to the unavailability of useful information. There are some platforms that do not charge high fees for depositing money but there are others who do exactly that. You might end up at a crypto exchange that offers free-of-cost deposits and withdrawals but extremely poor exchange rates. It comes as no surprise that there are also quite a few scam companies operating in this scene. Here are some red flags to be wary of while looking for crypto exchanges for investment:
No background history or details. A lot of crypto exchanges function without sharing important information regarding their team, history, and location. It is better to stay away from such exchange platforms as they deliberately hide background details to pull off an exit scam.
Suspicious trading volume. It is unethical for any cryptocurrency exchange platform to fake trading volumes on their platforms so that a lot of users get the wrong idea. If you ever feel like the exchange is hiding its accurate trading volume then it is better to close your account.
High transfer and other fees. Whenever you are transferring money directly to your wallet from an exchange’s wallet usually incurs a transfer fee that differs from exchange to exchange. But when these fees are accumulated and found to be costing a lot of money then traders need to be careful about it.
Proper licenses and compliance. There are hundreds of thousands of crypto exchanges all over the world that accept users from different countries based on their operating licenses. It is good practice to check and verify the compliance level and licenses obtained from various regulatory agencies to ensure that any particular exchange is safe to use and not a scam.
History of exploitation by hackers and bugs. A lot of decentralized as well as centralized crypto exchanges have come in contact with hackers who managed to break their firewall and transfer all digital assets – worth hundreds of millions – into a private wallet. So when you are choosing a good quality cryptocurrency exchange then make sure that it does not have such a history.
If you are mindful of a few key factors while choosing the best cryptocurrency exchanges, then there are slim chances of ever getting associated with scam platforms or those which can harm your trading and investment goals by draining all of your money.
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Bitcoin for the win!