How to Choose the Best Bitcoin Exchange?

Knowing how to buy Bitcoin is a first step into the digital currency world. Then, the important question arises – how to choose the right cryptocurrency exchange? Many questions need to be answered before a new trader can be sure that he made a good choice.

Depending on the needs, country, trading volume, security and many other factors the user can choose an exchange that’ll suit his requirements.

So, what precisely a trader needs to know in order to make the best possible choice? Check our list below:

Information about the exchange

Basic information such as the location of the exchange, the name of the founder and the market they focus on can be the first step for choosing the Bitcoin exchange.

Bitcoin is still a relatively unregulated currency in many countries, but things are changing. In a couple of years, the situation might look much better than today. As the utilization of Bitcoin rises, the governments are seeking to get a degree of control over the digital currency transactions. Money laundering, illegal drug smuggling and terrorism are just some of the reasons why authorities are looking to get some control and monitor the Bitcoin network.

Because of all of these things, it’s important to know the geographic location of a BTC exchange before making the decision. The location of the exchange dictates the laws it will have to comply with. The majority of the countries doesn’t have any laws related to digital currency, but if and when they start to do it, it could significantly affect user’s ability to use and trade Bitcoin.

For example, China is a bad choice for Western traders because there are additional fees, it’s hard to get verified, and English support often isn’t good enough.

Knowing more about the founders of the exchange can also be a great lead about the exchange reputation. If the founders are anonymous and haven’t provided a proof of reserve like in the case of BTC-e, that’s a good sign to be careful.

·        Supported currencies and liquidity

Before choosing an exchange, of course, it’s important to check does it support the trading pairs that suit the user needs.

This is especially the case with some altcoins which are offered on only one or two trading platforms.

So Choose the Cryptocurrency Exchanges that offer the highest number of trading pairs:

After finding the platform with desired trading pairs, the next thing is to check the exchange’s liquidity for that pair. If the liquidity is good – meaning that there’s a high trading volume – then the trades will be easier and faster to complete. This also means that the traders are able to sell the currency without the price being significantly affected. The easiest way to check the trading volume of the exchange is by checking it on the websites like Bitcoincharts.com.

Exchanges with the highest liquidity:

·        Trading Fees

The trading of Bitcoins (and all other coins) costs money – that’s a reason for exchanges to stay in business. Usually, exchanges charge a small percentage of the amount traded. As far as we were able to see, the percentage charged is always lower than 1 percent, typically being around 0.2 percent.

Usually, there’s a sliding scale which decreases the fee percentage as the monthly trading volume of the user rises. This is the way exchanges make a lot of money, so it’s not likely this fee model is going to change.

Exchanges with the lowest fees:

·        Trading Options

Depending on the needs, users may want to have access to certain order types or margin trading. Advanced users are often looking for futures and derivates trading, so keep that in mind as well.

The exchanges with the highest number of trading options:

·        Ease of Use

A simple interface which is easy to use and a quick loading is something everyone loves. But support for mobile devices is even more important. Users who are planning to make the trades on the move should double check does the exchange has a responsive website or Android and iOS apps means

Exchanges with the best interface and mobile support:

·        Customer Support

This can be one crucial factor, especially for the new traders. Many things could go wrong, and having a reliable support team can save a lot of nerves and money.

Exchanges with the best support:

 

·        User Experience

When selecting an exchange, it’s good to know what the most common complaints about it are. By checking Bitcoin forums, users can find many complaints on different trading platforms. If the preferred exchange has a lot of complaints about locking people out of their accounts, maybe it’s a good idea to take a look at other options.

Exchanges with the lowest number of complaints online:

 

·        Security

Unfortunately, many Bitcoin exchanges are at the constant risk of hacker’s attacks. The digital currencies are volatile, and an attack can cause the price drop, which can bring profits to some malicious users.

A safe trading platform needs to have:

§  Two-factor authentication

§  Cold storage for the majority of funds

§  PGP encrypted emails

§  Email and SMS alerts

§  24/7 wallet monitoring

§  Proof of reserve

If all of these conditions are met, the exchange is probably safe for keeping the funds in the wallet. Still, we advise that only the amounts used for trading should be kept on the exchange – the rest should be sent to the user’s private wallet.

Exchanges with the best security:

 

·        Conclusion

Many factors are vital when it comes to selecting a good exchange. In short, here’s what to look for:

§  Good location

§  Supported coins

§  High Liquidity

§  Low Fees

§  Numerous trading options

§  Mobile support

§  Good user experience

§  Excellent security

     

      And that’s it. These are the most important parameters for selecting the right Bitcoinexchange.