Choosing the right exchange is one of the most vital steps you need to take in order to invest smartly in cryptocurrencies. To help you do this well, it is important to understand the questions that you should ask them.
1. What currencies do you include?
Do you already know which digital currencies you are interested in? This is a fast-moving industry and new coins are created all the time, while not all exchanges have the same currencies. Our eToro review confirms that they offer Bitcoin and a wide selection of altcoins such as Litecoin, Dash and Ripple.
2. Can I change fiat to crypto and vice versa?
Some exchanges offer fiat to crypto conversions but others don’t. For example, in our Coinbase review, you will see that fiat can be used to buy any one of four different cryptocurrencies that they provide.
3. What payment methods can be used?
This is another vital issue. Some exchanges let you use the likes of PayPal to fund and withdraw from your account, as well as bank cards, transfers and other methods. Others are far more limited in this respect.
4. Is it regulated?
Regulation is important to many people using cryptocurrency exchanges and something to consider asking about.
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Are you happy about moving your money to an unregulated exchange? Many of these sites are unregulated, although exceptions include eToro. We have also noted that 24Option is regulated when reviewing it.
5. What fees do you charge?
The last thing you want is to see your funds eaten up by fees. This figure can vary greatly between exchanges. Be sure that you check how much you will be charged in fees before you get started.
6. Is there a mobile version?
It is now becoming increasingly popular for cryptocurrency investors to use their mobile devices to move money around. In this case, you need an exchange with either an app or a mobile-optimised site. We noted the presence of a slick, popular mobile app when reviewing Cex.
7. What customer support is available?
Will you run into problems at some point? Not being able to get issues sorted out speedily is one of the biggest complaints that cryptocurrency investors have. Therefore, it makes sense to find out how you can get in touch and how other users rate their service.
8. What are the transaction limits?
Are you planning to move a lot of money into cryptocurrencies? Some exchanges give you relatively small limits that make it impossible to carry out big transactions. Whether you want to buy Ethereum, Bitcoin or some other coin, you need to find an exchange that meets your needs. For example, when we looked at Bitstamp, we saw that a lot of personal information is asked for once you reach $10,000.
9. How do you keep my funds safe?
What security measures does the exchange have in place? Two-factor authentication is common-place in the best exchanges. It is clear that hackers are targeting cryptocurrency users so you need to use sites that protect you.
10. Do I need a separate wallet?
Is this purely an exchange or can you store your coins here too? There are different ways of working in this respect, so be sure that you know what you are setting up before you get started.
By getting the answers to these vital questions, you will be ready to buy cryptocurrencies with no fear of the unknown.
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