Closely working with cryptocurrency exchanges and ICOs accounts for a substantial part of what we’re doing at AssetRush. Therefore, we’ve decided to share some valuable insights about exchanges, which will allow you to choose the best and most reliable ones.

Volume

Trading volume is one the main criterion when choosing an exchange. First of all, the higher these metrics are, the more reliable the trading platform. Second of all, as trading volume indicates how many people are buying and selling a particular cryptocurrency, it can give you a hint about the future direction of this token. However, there is a catch: most exchanges inflate their trading metrics by bots. There’s no rule of thumb on how to deal with this problem, but we do have a couple of suggestions. To start with, try to use well-established exchanges with a proven track record, such as Bittrex, Bitfinex, Kraken, and Poloniex. Although they, too, might fabricate numbers, they would not doctor them dramatically. Also, even if you are not familiar with regression analysis, you can still go online and compare 24-hour trading volumes of the same pair on different platforms. Huge discrepancies will be a major red flag that there are more bots than real users on this exchange.

2. Ratings and community

Ratings of cryptocurrency exchanges are worth looking into as they are created based on the most important criteria: supported countries, fees, security, liquidity, etc. However, ratings alone are not enough. In addition to that, we strongly recommend taking a look at a platform’s community. Check out its Telegram channel and pay attention to how many users are in it, how lively the conversation is, what people are discussing, and if they are voicing any complaints. You may also go to a cryptocurrency forum such as Bitcointalk and interact with users who have first-hand experience with various platforms.

3. General dynamics

Always watch out for profound changes that happen to an exchange and that will likely influence its development. A good example is be Poloniex, which was bought by Circle in February, 2018. In addition to taking on more staff in order to improve customer support services and deal with the bugs, the Poloniex-Circle team is also planning on expanding to the Asian market by increasing both the workforce and the number of offices there. That being said, always catch up on the news regarding your platform of choice and keep tabs on any change of tack.

4. Fees

There are several types of fees. If you only want to trade on a platform, then you should carefully look into its deposit, transaction, and withdrawal fees. They differ across platforms, but usually maker and taker fees don’t exceed 0.25%

It’s a completely different story if you want to get your own token listed. We have already devoted an entire article to this topic. In a nutshell, all exchanges can be divided into 3 groups: large, medium, and small ones. Prices for the first group start from 50 BTC. For the second and third they lie within the range of 7 BTC to 30 BTC and 3 BTC to 5 BTC, respectively.

5. Security

Just making money is not enough; the platform of your choice must provide a mechanism that ensures the safety of your cryptocurrency. At minimum an exchange should implement 2FA, or 2-factor authentication, which in addition to your username and password, requires an extra security key. It can be an e-mail or SMS verification. Taking additional measures such as e-mail encryption with OpenPGP or U2F are a bonus. If you do not wish to withdraw your digital money from an exchange, it’s safer to keep it in cold storage. Nevertheless, the most secure option is to diversify your assets and store them in several crypto wallets.

Final Thoughts

The number of cryptocurrency exchanges is constantly growing, which can be baffling, especially for an inexperienced trader. Choosing a platform requires research, which can be time-consuming, with lots and lots of factors to consider. If you are not sure about an exchange and are not willing to take a risk, reach out to us at AssetRush to get a word of professional advice.