Best Cryptocurrency Exchanges for Beginners: Top 3 Crypto Exchanges ranked by Liquidity
Are you confused about which cryptocurrency exchange needs to be chosen for your trading or Investing? Don’t worry, you are in the right place. You will get a clear picture of cryptocurrency exchanges and what to choose based on your needs..!!!
Let’s dive in….!!!
The world of cryptocurrency is growing at a rapid pace, making it essential for investors to stay up to date with the latest news and trends. One of the foremost decisions investors make when getting involved in cryptocurrency is choosing the right exchanges. With so many different options available, it can be difficult to determine which one best suit your needs. This article will provide an overview of the different types of cryptocurrency exchanges and offer tips on how to choose the best one for you.
What is a Cryptocurrency Exchange?
A cryptocurrency exchange is an online platform that facilitates users to buy and sell cryptocurrencies using fiat currency or Altcoins (alternative currency to Bitcoin). Crypto exchanges act as an intermediary between buyers and sellers. According to coinmarketcap, a cryptocurrency price tracking website, there are almost 604 exchanges and 23,269 cryptocurrencies listed on the Crypto market.
Types of Cryptocurrency exchanges:
There are three types of exchanges available for trade.
- Centralized Cryptocurrency Exchange (CEX): They are operated by a third-party organization that facilitates transactions. These platforms ensure security and provide a better user experience, however, they charge higher than decentralized platforms. CEX has a higher liquidity and trade volume than DEX.
Ex: Coinbase, Binance, Gemini.
- Decentralized Cryptocurrency Exchange (DEX): These platforms perform transactions faster between two parties on a blockchain without the need for any intermediaries to manage funds. These platforms use algorithms called smart contracts to process a transaction and the investors need to have a digital wallet to perform actions. The liquidity and volume will be low. DEX safeguards anonymity and privacy as you do not need to provide your details to the exchange for KYC.
Ex: Pancakeswap, Dexilon, Bisq.
- Hybrid Cryptocurrency Exchange: It supports both the features of a traditional centralized exchange and a decentralized exchange. They can perform transactions with high speed and possess high liquidity when compared to DEX.
Ex: Qurrex, Eidoo, Legalos.
How do Crypto exchanges work?
First, you need to sign up to create an account. Then, you can purchase cryptocurrencies using fiat money or If you have any existing cryptocurrencies you can exchange them for others. The traded data is stored in the wallet provided by the platform.
Crypto exchanges are enhanced with security features and storage options. The fees for trading differ from exchange to exchange. Unlike traditional stock exchanges, crypto exchange’s function 24/7.
Types of Tradings on the Crypto Platform:
- Spot trading
- Day trading
- Trend Trading
- Futures trading
- Options trading
- Margin trading
- Range trading
- Swing trading
- Arbitrage Trading
Why do we need an exchange platform?
- Low Trading Fees: Crypto exchanges provide low exchange fees to trade. The amount varies from exchange to exchange.
- Security: Exchanges offer greater security features along with storage options.
- User Experience: The exchanges are designed with a user-friendly interface making them easy to use.
- Liquidity: The price may artificially inflate or deflate if the buyer or sellers are low. So, Liquidity is an important factor in choosing a crypto exchange to ensure the stability of the prices.
- Total cryptocurrencies available: Total number of cryptocurrencies supported by platforms varies from exchange to exchange.
How to Choose a Cryptocurrency Exchange?
- It should be Easy to Use with a better user interface.
- Monitor Fees and hidden charges of the exchange.
- Check for the level of security it offers and any breaches in the past.
- The wide range of cryptocurrencies and Fiat currencies the exchange supports.
- Check for Regulatory compliance.
- The payment methods the exchange accepts.
- The quality of customer support it offers, along with customer feedback and reviews.
Top 3 Centralized exchanges based on Liquidity:
Binance: Binance is the largest cryptocurrency exchange by trade volume with over 120M registered customers and 350+ cryptocurrencies to trade which was launched in 2017. The transaction fee is < 0.10%. Users can earn rewards for idle tokens. Binance also provides Binance Pay feature to shop and send cryptos to friends and family securely with zero fees.
Binance secures 10% of trading fees in asset funds for safekeeping, while offering customized access control and encrypted transactions. As per CoinMarketCap, Binance’s 24-hour trading volume is $7,001,387,202 with an average liquidity of 839 at present.
2. Kraken: Kraken is a US-based crypto exchange that supports 200+ cryptocurrencies to trade. It has over 9M clients supporting 190+ countries with a quarterly trading volume of $207B+. It was launched in 2013.
Users can trade easily on the Kraken mobile app. Users can also stake their cryptocurrencies (24+ assets) and can earn up to 24% in rewards annually. Kraken has a trading volume of $222,494,744 with an average liquidity of 754, according to coinmarketcap at the time of writing.
3. Coinbase Exchange: Coinbase is a beginner-friendly platform launched in 2012 and termed as one of the best crypto spot exchanges. Coinbase has over 110M+ verified users with a traded quarterly volume of $145B. It supports 100+ countries to trade, save and earn cryptos on both web-based and mobile apps.
The other popular centralized spot exchange platform includes Binance.US, Gemini, BKEX, Biconomy Exchange, and MEXC.
Click here for best bitcoin exchanges in India and for best Ethereum exchanges, click here
In conclusion, selecting the right cryptocurrency exchange is an important decision that should be on priority. It is essential to carefully consider the factors outlined in this article when making a choice. Your decision should be based on the features and services that you need to meet your individual goals. Furthermore, take into account any security measures and fees associated with each exchange as well as other needed information such as customer service and reviews. Researching thoroughly before settling on an exchange will help ensure that you have chosen the right one for you.