10 Things To Consider When Picking a Crypto Exchange

By Courage Kimber, Crypto Strategist & Blockchain Consultant

You may be at the very beginning of your crypto journey and looking to get started in investing. The best time to start investing is right now, but how do you get started? The simplest way for a beginner is to sign-up with a crypto exchange.

Here are 10 things to consider when picking an exchange for crypto investing.

1.) Security – Is this Exchange secure? Have there been several hacks? Do they restore customer funds if hacked? Consider these questions before you invest your hard-earned money. Two key security features for crypto are Whitelisting, restricting crypto withdrawals to specific wallet addresses; The second is 2FA, two-factor authentication. Most reputable exchanges will have one or both security features.

2.) Ease of Use – Can I navigate the exchange's website or mobile app? Can I easily trade cryptos and convert them to fiat money? It's important to be able to use the exchange without help in the long term. If the answer is no to any of those questions, try watching YouTube videos and beginners' guides for your exchange. Coinbase and Crypto.com are two of the easiest exchanges to navigate for beginners. There are lots of videos and training on how to use both online.

3.) Trading Volume and Liquidity – Does this exchange have a high enough trading volume? It's a good rule of thumb to seek out an exchange that has enough buyers and sellers. High trading volume is a liquidity indicator, which comes in handy if you plan to trade or convert to fiat. Exchanges like Binance, OKX, and Mandala are in demand due to a large number of users/sellers on their platforms providing liquidity.

4.) Personal Referrals – One of the main reasons I signed up for my first exchange was based on advice from experienced traders and friends. They were able to describe the ins and outs of which exchanges were best based on my trading objectives. If you don't have friends or family trading, the next best thing is social media reviews of crypto exchanges. Reddit and Twitter users love sharing about their experiences with crypto exchanges and will quickly tell you which ones to avoid.

5.) KYC Ease – Can I get verified on this exchange? Exchanges generally have, Know Your Customer, or KYC, required for customer identity verification. This will include basic information such as your name, D.O.B., and address. Some exchanges are very easy when it comes to KYC; while others may be aggravating and annoying to get through. It's easy to quit here, but don't give up. Two of the quickest exchanges to get onboarded and start trading crypto right away are KuCoin and Crypto.com

6.) Length of Operation – How long has the exchange been in business? Longevity is something to consider. There is a reason why exchanges like Bitstamp and Kraken have been around since 2011. They are time-tested, have been through several bear markets, and have earned the trust of the crypto community.

7.) Cryptocurrency Selection – Does it have the crypto coins I am looking for? Being able to find your desired cryptocurrency is part of the game. Hotbit and Gate.io have some of the largest selections of coins to choose from. Bitmart and Lbank are great for finding crypto gems before their prices skyrocket on mainstream exchanges.

8.) Location – Is this exchange available where I live? Some exchanges will place restrictions based on your location and deny access. To combat this, do a quick search of exchanges based on your location. WazirX is an option for traders based in India. Gemini, founded in New York, has a bitlicense and is accessible to New Yorkers. If you are in Africa exchanges like Luno, Yellowcard and Bitpesa will do the trick.

9.) Transparency & Trust – Does this exchange have a trusted reputation? Does this exchange share mission-critical updates or changes with users? Trust and transparency are embedded in blockchain technology and crypto culture. Posting information on social media about migrations, downtimes, or security breaches is pretty common. I would be wary of an exchange that doesn't share regular updates.

10.) Gut Instincts - What are my instincts telling me to do? The previous 9 criteria are important, but it has to pass the gut check for me. If I have an uneasy feeling about an exchange I won't sign up. I don't care how popular it is if your gut says "No" then don't use it.

These criteria are only suggestions. There are no absolutes, especially when it comes to crypto. As you advance in your journey, I recommend getting a non-custodial wallet.

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