5 Metrics to look out for when choosing an exchange
Trading crypto can be complicated and done in multiple ways. One of the most common ways is using an established crypto exchange. Exchanges are businesses that store crypto assets and match you with other buyers and sellers, effectively facilitating a smooth experience when buying or selling an asset. Choosing the right exchange can be a difficult task. Here are 5 metrics that can help you choose the right one for you.
The single most important thing when considering an exchange is to ensure its ability to easily fill and exit your trades at the price you intended. Prices move fast in the world of digital assets. In the event of high volatility, youll want to know your buy or sell order is filled quickly and at a price close to the one you see quoted on your screen. Exchanges with low liquidity can cause major differences in trigger and execution prices, making it possible to have bigger losses or smaller wins than anticipated.
The best way to assess the liquidity on an exchange is to look at its trading volume. The higher, the better. Bitget produces an overall volume of 6 billion usd per 24 hours on average, and nearly 2 billion worth of volume on its Bitcoin Futures product, making it the number 2 most liquid exchange across the board. You will have no problem getting in and out of trades and therefore a great choice.
Make sure your exchange provides the ability to trade the coin you wish to trade. There are now as many as 10.000 coins that you can trade. No exchange offers every digital asset, so firstly decide for yourself which coins you are most interested to trade. Think about whether you are interested in Bitcoin, ether, or DeFi tokens for example, and find an exchange that allows you to trade the assets of your choice. Again, checking liquidity is an important factor here.
Its no secret crypto exchanges can be vulnerable to hacks. Mt. Gox, one of the most prominent early exchanges, collapsed after $460 million in customer assets were stolen in 2014. Since then many exchanges have learned and implemented much more security in order to prevent these kinds of things from happening again. When choosing an exchange, make sure that the exchange offers multiple layers of protection like two-factor authentication, qr code verification and sometimes even biometric login, which uses facial and fingerprint identification.
Digital security preventing hackers from stealing customer assets should always be priority number 1 for a crypto exchange. Some exchanges will also have a healthy insurance policy on top of that just in case. Read more about Bitget insurance fund here: https://www.bitget.com/en/protection-fund
Crypto exchanges help you facilitate your trading. But as with everything, it comes at a cost. Fees can differ depending on your payment method, and type of transaction. Fees for a trade can vary wildly, such as up to 4.5% at Coinbase, as opposed to 0.02-0.06% on Bitget on its derivatives, and even 0% when trading spot products. This can make a massive difference in your net profits, so make sure you check this out well. If you click on this link below and sign up, you can even get a 33% discount on the fees on Bitget.
While the above are important metrics to consider, make sure you research your options in depth, and make sure everything fits your desires when it comes to choosing the perfect exchange for you!
Create a Bitget account through this referral link and receive up to $4000 in bonusses:
The information provided above is not financial advice but for educational and entertainment purposes. Please do your own due diligence or consult a financial advisor before investing in any digital assets.
All opinions expressed on Bitget’s Soapbox (also known as the ‘Soapbox’) are opinions of individual traders using the Bitget platform, and do not reflect the opinions of Bitget or its affiliate companies and partners. The Soapbox author’s opinions are based upon information they confirm to be reliable, but neither Bitget nor its affiliates warrant its complete accuracy, and it should not be relied upon as such.
- Bitget x TraderCobb: Crypto Trading Made FriendlierKOLs2023-03-01 | 5 minutes
- 3 Things Losing Trades Can Teach YouKOLs2022-11-28 | 5 minutes
- Funding: Deep DiveKOLs2022-11-24 | 5 minutes