Experts say Bitcoin’s value could skyrocket to $100,000 by the end of 2024. For this reason, many crypto proponents maintain it’s worth investing in.
After all, most types of crypto, including Bitcoin, are so volatile. Thus, they offer high rewards for high risks.
So, it’s also no wonder 420 million people worldwide use these alternative currencies.
If you’d also like to get into cryptocurrency, you could do so through a crypto exchange. However, you can’t just trust and select the first platform you see. You must first learn about and avoid common errors in picking crypto exchanges.
We’ll tell you what those blunders are below, so keep reading.
1. Not Verifying the Type of Exchange
You have two primary options for crypto exchanges: centralized (CEX) and decentralized (DEX). The type you choose can significantly impact how easily you can make transactions.
One of the chief differences between a CEX and a DEX is that a central entity governs the former. It serves as an intermediary between those buying and selling cryptocurrencies.
As an intermediary, a CEX makes crypto transactions easier for newbies. For instance, it helps buyers find compatible sellers and vice versa for a fee.
A DEX is an exchange built on a non-custodial blockchain. It only acts as a platform for traders to buy or sell cryptocurrencies. Since you must look for buyers or sellers, you don’t have to pay the exchange a “finder’s fee.”
2. Choosing a DEX as a Newbie
As a newcomer to crypto, it might be better to choose a CEX as your exchange platform. This way, you can rely on their help while looking for crypto buyers or sellers to transact with. While they’d cost more than a DEX, the guidance you can get is worth it in the earlier stages of your trading journey.
3. Thinking Exchanges Are Your Only Platforms
Aside from exchanges, you can buy, sell, and trade cryptocurrencies using crypto ATMs. According to https://www.bytefederal.com/, you can even convert crypto directly to cash. Such transactions take only an hour or less, whereas exchanges can take days.
The immediacy of ATMs also makes their use an ideal crypto trading strategy. They let you take advantage of the ever-fluctuating crypto prices. Thus, you can buy when their prices are low and sell or withdraw them as cash when their rates increase.
4. Choosing an Exchange With Weak Security
Remember: All cryptocurrencies live on the blockchain, a digital ledger. This means they can be at risk of cyber-attacks. Indeed, in 2022 alone, hackers stole $4 billion worth of crypto.
So before choosing a crypto exchange, review their security protocols first.
Fortunately, reliable crypto exchanges can mitigate risks by implementing robust security measures. For example, they require multi-factor authentication (MFA) for all accounts. They also let account holders use hot and cold wallets for better security.
Avoid These Errors in Picking Crypto Exchanges
Errors in picking crypto exchanges can make trading, especially for newbies, more complicated. They can also affect your trading profits or even raise your odds of becoming a hacking victim.
Considering how expensive cryptocurrencies are, you want to avoid such blunders. To do that, follow our tips to help you choose the most suitable crypto exchange.
For more crypto hacks and tips, check out our guide on how to cope with this market’s volatility!
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