- After Tesla’s $1.5 billion bitcoin purchase, more corporations seem poised to embrace cryptocurrencies.
- Rather than submitting to Reddit-style “FOMO” buying, investors are looking to educate themselves more.
- Insider compiled a list of 5 things a new crypto investor should watch for when considering an exchange.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
While global interest rates remain at historic lows, digital currencies have entered the mainstream and are increasingly seeing levels of mass adoption due to soaring interest from both retail and institutional investors.
In fact, the average amateur crypto investor can take comfort in knowing many banks are beginning to look at the burgeoning asset class more and more seriously. And experts believe the speed of growth in cryptocurrencies will accelerate much faster than that seen in the past few years.
Furthermore, with the world becoming more digitized, governments and central banks are exploring the launch of their own digital fiat currencies.
So how should someone that is new to the whole cryptocurrency market choose a platform on which to trade their exchange digital assets?
Insider compiled a list of five fundamental factors everyone should consider, according to Nigel Green, a cryptocurrency expert and CEO of financial services company deVere Group.
“Investing in cryptocurrencies remains highly speculative and it is not for everyone – but one of the keys to success would be selecting the right crypto exchange,” Green said.
A private exchange that stores confidential consumer documents and funds should be as decentralized as possible. If the data is available on a couple of web servers, that would expose them to easy hacks.
Two-step verification throughout the login process, such as a password and quick-expiry codes, is important.
Investors should avoid exchanges that offer cheap trading costs and services, or are based in parts of the world where investor security is weak. They must also do their due diligence and assess the business behind the exchange, just as they would with any other financial organization, in order to protect their money.
Some exchanges are well-versed with the need to address costs in advance, while others are inclined to hide them. Choose wisely by going for exchanges that are upfront and transparent about how much it will cost to trade cryptos on their platform.
Simplicity and ease of use
Bear in mind that you may not always want to trade from your desktop. Finding an exchange that recognizes the use of ‘on-the-move’ trading via a secure app is often a better option.
Check whether the exchange runs efficiently when trading volume is high, or when currency rates are see-sawing. Some exchanges are notorious for system faults and trading halts.
Confirm that the exchange has a chat, or quick communication service integrated.