Choosing the right cryptocurrency exchange can be one of the most important initial tasks an interested trader or investor must complete. Choosing the wrong platform or the wrong cryptocurrency can potentially lead to a path full of hacks, distractions, and wasted efforts.
Which cryptocurrency to invest in?
Which cryptocurrency to invest in in 2020? We have prepared a list of 5 most stable and interesting cryptocurrencies for profitable investments.
- Bitcoin — as long as it dominates the cryptocurrency market, investors will continue to benefit from its high level of liquidity. Even in times of market uncertainty. Over the years, Bitcoin has shown erratic but steady growth.
- Ethereum (ETH) — one of the most influential cryptocurrencies, its blockchain technology allows the development of thousands of projects based on it. Ethereum remains a very affordable investment for those who are just starting in the cryptocurrency space. The strength of this currency is closely linked to the strength of its network. The more decentralized applications and ecosystems rely on the Ethereum network, the more powerful ETH tokens will become.
- Litecoin (LTC) — one of the fastest and most affordable cryptocurrencies when it comes to payments. Its technological profile has gotten this cryptocurrency the third place in terms of market capitalization.
- Ripple (XRP) — has secure technologies and a network that is rapidly opening up new opportunities in international trade, banking, and payment networks. Experts believe that 2020 will lead to more widespread adoption of XRP, and its price will rise significantly, as a result.
- Zcash (ZEC) — the best coin for investment privacy. Zcash price is closely related to the general market performance. In 2019, this confidential coin reached 112 dollars, in line with Bitcoin’s average annual rally. However, if Bitcoin continues to develop positively, Zcash will likely follow.
Choosing a stock exchange and crypto exchange
When looking for the right stock exchange or crypto exchange, interested parties must first determine what is it that they want to achieve. For example, is the goal to simply invest on a long-term basis or to open and close positions regularly?
Investors can look at spot exchanges. These are platforms where you can buy and sell real digital assets. For example, spot bitcoin (BTC) is the actual bitcoin that a person can buy, sell, or transfer to any exchange or wallet and keep as long as they want.
On the other hand, traders may be interested in derivatives — trading products such as futures and options, which are based on changes in prices for underlying spot assets.
These products trade contracts based on changes in prices for underlying assets and can be settled in cash or digital assets, depending on the exchange. However, these contracts are local, based on the exchanges on which they are listed and, therefore, cannot be transferred to other locations.
Once a trader has identified his goals, it is imperative to study a country’s rules, exchange security, and many other aspects.
What to look for when investing in cryptocurrencies?
Digital currencies offer many advantages over traditional fiat money, such as lower fees, transparency, and transaction speed.
10 things to take into account when investing in cryptocurrencies:
1. Availability of KYC / AML. In one of our previously published articles, we have talked about this in more detail.
3. Security. Each exchange also has various other security measures that might be worth checking out, such as cold storage asset reserves and storage services.
4. Insurance fund. Some exchanges have funds used to compensate customers under certain circumstances. Other exchanges are subject to the Federal Deposit Insurance Corporation (FDIC), which may protect a certain amount of US users’ funds.
5. Option to exchange fiat funds. Some exchanges have different fiat options that are compatible with specific banks, and others don’t. It may be necessary to check which banks the exchanges work with, as well as what types of fiat currencies are traded.
6. Leverage trading. Derivatives’ exchanges often offer leverage trading. Leverage essentially allows traders to borrow a certain amount of funds to trade based on the amount of funds they hold on the exchange. Leverage can be important for traders looking to enter larger short-term positions.
7. Trade volumes. This aspect can be important as it affects the ease with which users can enter or exit positions. For example, if a trader wants to sell 100 BTC, he probably won’t be able to do so on a low volume exchange, as there may not be enough sellers at the current market price. This may force the trader to sell at a lower price.
8. Prices. Asset prices also differ on different exchanges. Crypto assets can be traded higher or lower on one exchange compared to another due to the volume, location of the participant (Chinese exchanges can sometimes pump more), and other factors.
9. Choice of assets. The best digital assets like Bitcoin, Ethereum (ETH), and Litecoin (LTC) are widely available on most crypto exchanges. However, other smaller capitalized coins and tokens may not be available on some exchanges.
10. Fees. Most exchanges charge a small commission for each trade. These fees vary by platform and are usually based on a percentage of each trade. Some exchanges also have withdrawal fees and limits.
There is no one size fits all solution for cryptocurrency exchange. Each user has unique needs when buying cryptocurrency. Cratos is a licensed crypto exchange that complies with all legal requirements.
On our service’s website, you can view prices for selected cryptocurrencies, conduct trades at different volumes, and not worry about the safety of your assets.