When choosing a cryptocurrency exchange, it is important to consider the following factors.
One of the main factors to consider when choosing an exchange is the level of security it offers to all interested parties, especially traders and investors. While the term security could cover various things, the main factors to consider are user privacy, regulations, as well as security against targeted cyberattacks.
Likewise, there are regulatory bodies that ensure these exchanges remain accountable and ultimately don't run away with user investments. Some of the most prominent regulators include authorities such as the Financial Conduct Authority (FCA) in the UK and the Financial Crimes Enforcement Network (FinCEN) in the US. Being regulated by these regulators provides a great deal of security guarantees for end users who can trade freely and peacefully through these exchanges.
Some exchanges that are regulated by these regulators and therefore considered to be among the safest, include Binance, Coinbase, Kraken, Bitcoin system, Gemini, and so on.
Verification Processes (KYC)
In addition to the security checks, the verification process employed by an exchange is another important aspect to look for. The reason for this stems from the fact that each platform has its own policy, and as one would expect, it focuses on specific regions. For example, if your choice does not support your country, then you may not be able to validate your identity outside the accepted regions.
Likewise, some platforms can take days and even weeks to verify your account, while others can take a couple of minutes depending on the type of documents a prospect is asked for. Either way, time can be of great importance to you. However, if you're not in a hurry to get started, then this may not be a significant factor to consider.
While this point may not be of much concern to beginners, it is something professional traders or high-level investors take into consideration when choosing an exchange platform. Beware, trading activities in this context refer to things like trading volume, as well as the number of coins and fiat options available on an exchange platform.
The trading volume of an exchange provides an idea of the value of liquidity and how actively investors participate in the platform. Furthermore, the number of coins that can be traded on the platform, as well as the fiat options that are accepted, indicate how dynamic and flexible the platform can be. In other words, an exchange that provides more token and fiat options tends to be more flexible than one that provides fewer options to end users.
While the decentralized economy is set to do away with the centralized system, this appears to be nearly impossible to accomplish, as most exchanges (especially those offering fiat currency support) still require input from payment providers with card to facilitate fiat transactions.
As such, there is a big differentiation between most exchanges when it comes to deposit / withdrawal fees. In some cases, some exchanges are able to negotiate for payment card payment providers and accept lower fees from end users, while in other situations, users may be subject to high fees from these entities.
While an exchange's trading fees can be as low as 0,10%, as is the case with Binance, they can also be as high as 1,49%, as is the case with Coinbase. With this in mind, commission could be a significant factor to consider when deciding which exchange to trade on.