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While retail investors are rushing to use crypto, it’s back to trading fundamentals.
Table of Contents
Studies estimate that 1 in 10 people will invest their stimulus checks in crypto. Which means there will be a huge number of people running into the crypto space with little idea of what to expect – thankfully that’s exactly what cryptocurrencies are designed for. These tokens are purpose-built to give everyone access, whether they are new to the trade or institutional investors. As a private investor, there are a few things you should familiarize yourself with before investing. Especially if you want to keep your investment safe and secure.
Understanding the fundamentals of the market is a hugely important part of investing in crypto. The other thing that many investors may not pay attention to at first is how to choose the best crypto trading platform that suits both their needs and their ideologies. This is an often overlooked part of wise investing, and one that is surprisingly easy to fix.
Why choose a crypto trading platform?
While there are still a few different ways to get your own Bitcoin, crypto trading platforms and crypto exchanges remain by far the most popular. This is largely because they are much more reliable than just about any other option. When you opt for a crypto trading platform, you gain access to a high level of security, both when buying your coins and when storing them. Not only that, but crypto exchange platforms represent one huge pool of demand. This means that everyone on a crypto trading platform is willing, happy and looking to be involved in crypto – something you won’t find anywhere else.
These exchanges also have access to a large supply of bitcoin – as many who use exchanges want to sell it too. That’s how they get names like “exchange” and “trading platform” because that’s exactly what they do. They facilitate the exchange or trading of cryptocurrencies. Since these are spaces where large communities of crypto enthusiasts can co-exist, there are some other benefits to using them as well. For example, in certain cases and at certain times, some transactions can be reversed if an error has occurred. This is something you won’t find on peer-to-peer networks. The tokens to be purchased are also guaranteed. You will not easily find an exchange that does not produce the tokens you paid for.
What to look for
When you actually get down to choosing a crypto trading platform, there are some pretty important things to choose need to have. There are also some things to keep in mind that are not really necessary. Choosing a crypto exchange is quite a very personal goal. You need to think about how you want to invest, what you want to invest in, and review your existing ideals regarding cryptocurrencies – or why you want to invest in crypto at all.
For most investors, answering these three questions will automatically link the viable exchanges to use.
How to Invest
Are you considering trading in large volumes or smaller drops and sludges? Are you planning to HODL the bitcoins you buy, or is day trading or arbitrage more your style? Are you planning to invest in options? How you plan to invest gives you a much better framework for the investment options that a particular platform should have for you.
Where to invest
Are you looking to invest in the big names, such as Bitcoin and Ethereum, or do you really want to diversify and explore the ever-expanding sea of altcoins? Keep in mind that not all exchanges support all cryptos, so if there is a specific token you want to buy, make sure the exchange of choice offers it.
Why you invest
Do you want to create capital? Do you want a solid store of value or protect your existing assets against currency deflation? Do you need to move money across borders to friends and loved ones? Are you just enjoying the idea of cryptos as a disruptive form of currency? Why you invest in cryptos will tell you where to invest. This is because certain centralized exchanges do not meet these requirements, while in others decentralized exchanges cannot provide the protection you need.
Once you find your initial motivation, it becomes much easier to find a good exchange platform. Now all you have to do is focus on the options you have now are these basic features:
- Does the platform offer good volume and liquidity?
- Does the platform comply with geolocation-specific regulations and rules?
- What are their trading costs?
- Are they safe?
The four basics represent the last four applicable questions to ask to find that perfect exchange platform. If the platform you are considering ticks all 7 boxes, then you are good to go! Time to act.
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