The value of cryptocurrency markets
is growing each year exponentially. As a result, new exchanges are also coming
up to facilitate trading in this new form of currency. If you are choosing a cryptocurrency futures exchange, do your homework, and
check the security measures on the platform.
Also, remember that a majority of
exchanges do not work under specific rules and regulations. Your money may be
at risk if you fail to pay attention to these critical factors.
Matters a Lot
Before selecting any exchange for
cryptocurrency futures trading, make sure that it is legal and available in
your country. In many nations, there is a regulatory fog surrounding this
Hence, exchanges cannot operate in
these geographies. Many exchanges may not accept U.S. citizens as their
customers as well. It makes sense to look at the address of the company for
protecting against any frauds. If you get hacked, it will be challenging to
determine the right jurisdiction if you don’t know about the exchange location.
of Market Data
For successful trading, you need easy
access to market data and technical details. With an advanced platform, it
becomes easy to find the prices displayed across connected venues using consolidated
data feed. Also, the platform should provide access to various crypto markets
with a single account.
Volumes and Liquidity
You would always want to pick a cryptocurrency futures exchange
that has higher volumes and liquidity. High volume trading leads to better
accuracy of prices. The exchange processes several transactions at once. So,
they have higher stringency in their pricing and approvals.
The experts recommend not keeping too
much money on any exchange for too long. It can be risky even if you choose a
verified and researched exchange. Also, check if the liquidity is aggregated
through multiple venues like OTC desks, exchanges, and other resources.
against Risks and Frauds
In the past, digital currency
exchanges have been subjected to many hacking incidents. The exchange hack of Mt. Gox in 2014
resulted in a loss of $430 million and 740,000 Bitcoin. Such scams or hacks can
put your money in danger. Hence, it is incredibly critical that you pick the
exchange following the best security protocols.
See if they keep the stored funds
safely with measures like multi-signature access by authorized people only. You
can also make sure that the exchange has nearly 95% of its assets in offline
In this respect, look at the
- Check the security
protocols in the exchange’s web address
- Two-factor authentication
for login safety
- Auditing and monitoring
of exchange activities
- See if the exchange
ensures its funds to reimburse your losses
When trading through a cryptocurrency
exchange, you need a smooth experience without any interference. So, pick the
platforms that protect your identity and provide a simple user interface. Check
the performance of the platform on both a desktop and a mobile device. If the
design is responsive, you can manage your trades through your phone, even on
Most importantly, check the exchange
reviews and see what others have to say about the support and services it
offers. Some exchanges provide the fastest time as well. They allow you to
register, deposit the money, withdraw cash, and start with the contracts within
a few minutes.
Before finalizing a cryptocurrency futures exchange,
it is essential to compare the fees with other platforms. Usually, the exchange
will charge less than one percent for each transaction.
The charges may decline further if
the volumes increase. Also, check the withdrawal fees as it may be reasonably
high on some platforms. Lastly, review and compare the exchange rates of coins
at several platforms for maximum advantage.
the Policies and Reputation
Not every cryptocurrency exchange is
the same. At some exchanges, you may still not get digital tokens. As a result,
you have to pay in cash for your trades. In some locations, there are
compliance requirements and registration procedures for these platforms. Make
sure that the exchange follows all these guidelines to protect your investment.
When trading cryptocurrency futures,
you may also need help and support of the experts to understand the basics and
make informed decisions. If an exchange has a proper support system and guides
to lead your way, you can consider registering and trading with them.