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Beginner’s Guide - Best Crypto Exchange to Maximise Profits

Choosing the Best Crypto Exchange to Maximize Profits
Best Crypto Exchange

Beginner’s Guide - Choosing the Best Crypto Exchange to Maximize Profits

Investing in cryptocurrencies can seem daunting to anyone new to this industry. There are numerous exchanges and there are numerous cryptocurrencies to invest in. "What exchange should I use?" is a question that I am often asked. The correct answer to this question is actually quite nuanced and has a number of variables. The various factors that go into determining the best crypto exchange are presented below.

Also Read - Top 10 Trusted Cryptocurrency and Bitcoin Investment Sites

Source of Purchasing Power
Referral links
Deposit fees
Trading fees
Withdrawal fees (transfer to other wallets)
Withdrawal blackouts
Fiat withdrawal (time delay)
Staking/Earning options
Security
Promotions - Fee Waiver

Source of Purchasing Power

The first thing to consider is that there are 3 potential sources of your purchasing power on these exchanges. These are, namely fiat money (cash), credit card purchases, and other digital assets (such as other cryptocurrencies and stablecoins).

Fiat Money - Whether or not an exchange accepts your fiat money will depend mainly on your location and the regulations of your current state / country. Often times, you will find that some exchanges can accept fiat money directly as wire transfers, while others offer no means of using wire transfers to fund your account. If fiat money is your main source of purchasing power, choose an exchange that can accept funds via wire transfers, as these are often the cheapest way to fund your account.

Credit Card - Some (actually, most) of the exchanges would allow you to buy cryptocurrency with a credit card. However, this is by far the least economical option. Exchanges would normally charge a credit card fee of about 3% or more for using a credit card to make purchases. Also, you will not be able to place limited orders if you use a credit card. You would have to make purchases at the market price and if you are like me this can sometimes mean hours of constant market monitoring to buy a coin at the desired price. Also, not all cryptocurrencies available to trade on an exchange would be available to purchase with a credit card. Also, if you are buying in any currency other than US dollar, keep an eye out for exchange rates as your local currency will be converted to US dollar first at the back and then used to purchase your chosen cryptocurrency. You should calculate yourself whether it is cheaper to use your bank's conversion rate (buy in USD and let your bank do the conversion) or to use the exchange's conversion rate (buy in local currency and let the exchange do the conversion). conversion).

Digital Assets - If you already have cryptocurrencies on other wallets or exchanges, you can send them to an exchange of your choice and use them to finance your purchases. But this requires that you have bought these cryptocurrencies in the first place using one of the other options above.

Referral links

Some exchanges have generous referral bonuses. While rewards often go to the sender, some exchanges have decent bonuses for signing up with a referral link as well. (Note that you would have to be a different new user for the exchange) These often include discounts on merchant fees, subscription bonuses, and free upgrade to higher loyalty tiers. Such referral links can often be found on social media links from channels that cover cryptocurrency content. Also, if you have friends who already use these exchanges, you can use their referral links (which would benefit both you and your friend). In case you are a bit of a recluse and have few friends, I have left my referral link at the end of this article if you need a referral link for additional bonuses while using various exchanges.

Deposit fees

Nowadays , most exchanges do not charge deposit fees. (They get their share of the withdrawal fee instead, see below)

Trading fees

Trade rates will likely differ from exchange to exchange as well. However, some exchanges would grant discounts on trading fees based on the level of loyalty. Some also offer deep discounts for paying trading fees in their native cryptocurrency (Example: using KCS on Kucoin or BNB on Binance to pay trading fees). Some may also allow the redemption of discount coupons that would lower business rates.

Withdrawal fees (transfer to other wallets)

Exchanges vary differently from one to another with regard to withdrawal fees. Some have quite high fees, while others have low fees. Some even offer free withdrawals, up to a certain number of withdrawals per month. If your intention is to buy a cryptocurrency and then send it to a personal hardware wallet or other exchange / protocol for more performance, this may be an important factor for you. For most exchanges, the withdrawal fees are likely to be different for each cryptocurrency. Also note that some exchanges charge a flat fee, while others charge a percentage of the asset that is withdrawn (with a minimum fee cap, of course). Generally speaking, it is often better to choose an exchange that charges a flat withdrawal fee rather than one that charges a percentage of the withdrawn asset.

Withdrawal blackouts

There are some exchanges that do not offer any means of transferring cryptocurrencies outside of the exchange. Some claim to allow transfers, but would have transfer options "temporarily" unavailable for "technical" reasons. Please note these are HUGE RED FLAGS! If an exchange does not allow withdrawal, there is a chance that the exchange has taken custody of your money and never bought the cryptocurrency for you. It could be the front of a Ponzi scheme or worse. Never choose an exchange that does not offer withdrawal services. If you currently have cryptocurrencies on exchanges that claim to have "temporarily" suspended your withdrawals (without any updates on your progress in restoring withdrawals), consider selling your assets and buying them back on other exchanges.

Fiat withdrawal (time delay)

Ideally, when you finally sell your cryptocurrency and decide to withdraw your earnings, you will want your exchange to return your funds in a timely manner. Exchanges often give expected processing time for trust fund withdrawals. Compare these and choose the one that best suits your needs. Also, after depositing funds into your account, perform a test withdrawal to assess the timeliness of the withdrawal yourself. If the time spent deviates too much from the expected withdrawal times, it can also be a possible red flag.

Staking/Earning options

Some exchanges have share / profit options within the exchange, making it easy to earn a return on your cryptocurrency while keeping it on the exchange. If you intend to stake and earn an additional return, you will need to consider the annual percentage return (interest rate) that is offered for the chosen cryptocurrency, the length of the lock-in period and the minimum or maximum bet amounts required / allowed.

Security

Ideally, you should choose an exchange that is completely secure and has never been hacked before. However, since cryptocurrency exchanges have a large number of assets in their custody, large exchanges are often the main targets of hackers. Unfortunately, these cyberattacks do happen from time to time. A new exchange with a clean history is not necessarily better than a previous exchange that was previously attacked. Older ones are often well tested over the years and often have much stronger security as a result. You could also look back to see how one exchange handled the cyberattack. Please note whether the lost user funds were refunded by the exchange. This sets a precedent and an expectation that the exchange will handle future attacks similarly (although this, of course, cannot be guaranteed).

Promotions: Fee Waiver

Some exchanges run promotions with reduced fees for limited periods of time. These could include credit card fee waivers or business fee reductions. Be on the lookout for these promotions as they may become one of your best options for a limited period of time.

In conclusion, from the above factors, it is quite clear that choosing the best exchange is not an easy task. The optimal exchange may differ based on the different scenarios you may encounter. However, by keeping the above points in mind, you will be better equipped to choose the most suitable exchange on your own.

Reference links to exchanges

Editor's Choice for Best Crypto Exchanges:

1. Binance - 10% off trading fees
2. Kucoin 
3. Crypto.com - 25 USD in CRO when 25 USD in CRO is staked
4. Coinbase - 10 USD in BTC after purchasing 100USD in cryptocurrency
5. Gemini - 10 USD in BTC after purchasing 100USD in cryptocurrency
6. SwissBorg
7. Coinhacko
8. Hotbit

Disclaimer - I am not a financial advisor. The above article is for educational purposes only. The article does not endorse any exchange over another. The cited examples are for demonstration purposes only. Check with the exchange in question for the most up-to-date rates and fees.

 Also Read - What Is e-Money (NGM) And How Does It Work?

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