The last few years have seen a phenomenal boom in the trade of cryptocurrency. Everyone, right from financial institutions to businesses and youngsters, wants to learn more and benefit from it.

And what stands at the entry point of all this is a cryptocurrency exchange. Crypto is not available for buying at any bank or investment company. They are available through a platform known as a cryptocurrency exchange.

That’s not all! These exchanges do much more than letting you buy and sell crypto. They allow investors to engage in lending crypto, dealing in NFT art auctions, conversion of one crypto into the other, and more.

So, for a platform that does so much, it only makes sense to dabble in one that not just helps you meet your investment goals but also furthers them.

Whether you are looking at a cryptocurrency exchange in India or elsewhere, here are some things to keep in mind before choosing one:

  1. Type of exchange: All the top cryptocurrency exchanges in the world are divided into three types. One is a centralised exchange where it plays the role of an intermediary in bringing the buyers and sellers together. The second is a decentralised exchange where there is no middleman and the buyers and sellers directly transact with each other. The third type is a hybrid exchange that merges the benefits of the other two.
  2. Authenticity: Since cryptocurrency is not backed by a centralised agency and protected the way a traditional bank would, knowing how authentic the exchange is paramount. Some things to look out for here include knowing if the exchange’s address, owners, and members are in the public domain, whether its funds are insured, does it have two-factor authentication, are the investor’s deposits stored in a cold chain, etc.
  3. Supported tokens and coins: Most of the exchanges around the world support Ethereum and Bitcoin, two of the most popular cryptos. However, investors know that there is much more to it than just these two coins. If you wish to trade in more than these two, look for exchanges that support a wider range of coins. If you want to invest in new or meme coins, go with established exchanges to avoid risks.
  4. Fees: Every cryptocurrency exchange has a different fee structure, and is an important factor when it comes to selecting a particular exchange. Check for all the aspects of the fee structure including the deposit and withdrawal fees. However, an exchange with a higher fee isn’t necessarily bad. The fee may be charged for you to trade easily while providing added security through insurance.
  5. User interface: Whether you are a first-timer or a seasoned investor in cryptocurrency, your experience while using its interface is paramount. The exchange must have intelligent intuitive functions that give you reliable information efficiently and in time. The exchange must be easily accessible on a mobile device or desktop depending on your preference. An exchange that educates its investors through blogs, videos, and other material should be preferred. 
  6. Liquidity: This is one of the most critical factors to consider while choosing an exchange. Whenever you plan to buy or sell, your exchange must have enough trading volume to keep your holdings liquid allowing a fast sale at the best price. Usually, the larger the exchange, the higher is its liquidity.

Cryptocurrency exchanges are dynamic and constantly upgrading their regulations, security protocols, fees, and user experiences. Your final choice must be the sum of the careful balancing of all these factors. It is okay to take time to learn about this space and wait before you invest instead of making a haphazard decision.