5 Things To Consider When Switching Crypto Exchanges

November 30, 2021

Cryptocurrencies, especially Bitcoin and Ethereum, have risen in popularity over the years. One reason for this is how Bitcoin’s price increases year after year. In fact, from December 2018, the former’s price was still around USD$3,300, and it soared to over USD$60,000 in November 2021. Over the years, there are now plenty of cryptocurrencies, like XRP, LTC, ADA, etc., that promise high returns to potential investors. With this comes the rise of both crypto investors and crypto exchanges.

Before investing in cryptocurrencies, however, you must first choose a reliable cryptocurrency exchange. This platform allows customers like you to trade their digital assets for other digital currencies or even fiat money. Now, the problem is, if you hastily pick the first crypto exchange platform you’ll see, you may end up regretting your decision. Most probably because you find the platform’s interface difficult to navigate, the prices are high, or they have inadequate customer support.

Unfortunately, switching to another cryptocurrency platform is easier said than done. For one, you don’t want to constantly transfer your digital assets from time to time as it’s just a hassle on your part. Also, do note that there are various crypto exchanges that basically promise the same thing––security and convenience––which makes the whole selection process even more difficult.

To help you out, here are some key considerations you should keep in mind when switching to another crypto exchange:

What you'll learn 👉

1. Research the reputation

If you want to have high returns from your digital assets, it’s vital first to have sufficient capital. Because of this, you want to make sure that you’re switching to a crypto exchange that’s reputable.

To assess the platform’s reputability, check the user’s review of the said platform. Of course, if you notice that most, if not all, users write positive things about the platform, then consider the platform in your shortlist. You can also visit trusted review websites like Best Crypto Exchange Australia to help you develop a list of possible crypto exchanges. With just a little effort on your part, you can choose a platform that’s reputable and highly valued by its users. (1)

2. Ensure it can operate in your country

If you’ve already selected a list of reputable crypto exchanges, the next thing you should check is the fact whether it’s operable in your country. Of course, if it can operate within your state, then you can’t use the platform, despite how reputable it is. The platform’s jurisdiction not only reflects their target market but also shows where they can operate their business. When a platform goes beyond its authority, it may face hefty fines due to specific guidelines set by the rules and regulations of cryptocurrency.

Conveniently, you can easily check if the crypto exchange has jurisdiction in your country because most of their URLs are specific to the country. For instance, there are those that emphasize they’re only operating in Australia since their website address is ‘exchange.au.’ (2)

3. Assess their security

If you’re now sure that the platform you’ve selected can legally operate in your country, the next thing you should find out is its security. In other words, you need to make sure that the one you’re switching to is legitimate and secure.

Security is an important facade when switching to another crypto exchange because there have been multiple data breaches these days. Some of these breaches involved the assets of cryptocurrency investors, regardless of how much you’ve invested. That’s why it’s advisable to choose only the best crypto exchanges, as you’re certain of the security they offer.

To assess the platform’s security, get to know their chosen method. As a start, you want one that offers two-factor authentication, wherein you log in with your registered username and password and a verification code sent through your email or via SMS.

4. Has liquidity

Since trading, buying, and selling are important factors when venturing into the world of cryptocurrency, it’s essential that potential investors have liquidity so they can trade at any given time without moving the whole market too much. Having good liquidity means that the exchange within the platform is high enough that the volume of orders flows through their order books every day.

Moreover, for a crypto exchange to have that volume, it must have the necessary number of users or users who’ve invested a lot and exchange within the platform frequently. If the platform only has a small number of users, no one may be willing to buy or sell the coins they’re holding. Additionally, if there are only a few orders, then the prices of a coin may go up, which means that investors have to pay more than necessary. (2)

With that said, it’s also important to know the prices of the digital coin offered by the exchange as it varies from one platform to another. As much as possible, you want to stay away from crypto exchanges that have high prices. With a little bit of research on your part, you’re sure to find a platform that offers prices suitable for you.

5. Customer service

Just like any service provider, you want an exchange platform that offers the best customer service. Unfortunately, due to the high volume of users they encounter on a daily basis, the majority of crypto platforms don’t offer good customer service. And bad customer service can be a red flag as you want someone who you can talk to if anything happens to your exchanges, which is a common occurrence in the world of cryptocurrencies.

So just like checking its reputability, you also want to read all about the platform’s customer service. Check if the majority of user complaints come from how unresponsive they are from queries. If this is the case, it’s best to choose another platform that places more importance on its users.

Takeaway

In general, digital currency has the potential to offer security and reliability, both of which are important when navigating in this unstable economic world. Still, the security and reliability that cryptocurrencies offer come with a price––their highly volatile nature. This means that you must find a crypto exchange that offers the things mentioned above. By doing so, you can rest assured that your assets are accessible and secure, allowing you to withdraw at any time.