Cryptocurrency exchanges

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03.06.2021 13:52
Cryptocurrency exchanges

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    Cryptocurrency exchanges

    Cryptocurrencies are considered risky assets because of their high rate of volatility. In a single day, rate fluctuations can reach tens of percent. The history of cryptocurrencies has known "black days" - rate declines of 50% or more. During the ten years of its existence, thanks to its volatility, the cryptocurrency has become a favourite profit-making tool for speculators. Special trading platforms - cryptocurrency exchanges - have been created for trading. Cryptocurrency exchanges are online venues for exchanging one cryptocurrency for another or fiat money. Bidders create bids for the exchange and determine the value and volume of the cryptocurrency.

    If the marketplace has a suitable counteroffer, users conduct the transaction. The first marketplace, MtGox, appeared in 2010. After three months of operation, the exchange had a daily turnover of 150,000 coins. A year later, 31,200 participants were trading on the exchange. Cryptocurrency exchanges proved to be a successful business. Within a few years, the number of online exchanges reached three hundred. The fate of the MtGox project was a sad one. After a hacker attack in 2014, the exchange ceased to exist. Along with the traders' funds, which remained in the exchangers' wallets. To avoid the fate of MtGox players and choose a convenient platform to make money, a novice trader should understand the advantages and disadvantages of the leading trading platforms present in the cryptocurrency market.

    In the years that followed, cybersecurity experts introduced several solutions to protect customer assets and private data. Broex servers are located in different geographical locations, preventing insiders or attackers from conducting a full-fledged attack.

    What to begin with

    Of the cryptocurrency exchanges featured in the top twenty rankings, beginners should pay attention to exchanges with an official representation in your state. If a user's account gets hacked or blocked, or funds are lost from the account, a representative office in your state can make it easier to solve problems. Exchanges offer the trader a set of tools for trading. Their interface should be simple and easy to use. During fast price leaps, a trader may make a technical mistake, confusing the interface panels, which can lead to the loss of funds.

    When choosing a marketplace, it is important to pay attention to the number of trading pairs and the number of cryptocurrencies available for trading. A large number of assets on an exchange provides more trading opportunities, but an exchange that promotes the listing of coins from questionable projects can put users' funds at risk.

    An example of a sensible balance is the Broex exchange, which supports more than two dozen key assets.

    Tools for trading on cryptocurrency exchanges

    Reliable cryptocurrency exchanges offer users a wide range of tools for trading. The ability to place a stop order, sell or buy a cryptocurrency when a certain rate is reached, freeing up time for traders to do other things. Some exchanges offer rewards to users for storing digital coins in exchange accounts - stacking.

    The value of the reward ranges from 1% to 15%. However, you should not store cryptocurrency in an exchange wallet for the sake of stacking. A drop in the exchange rate could burn off not only the reward but also a share of the deposit.

    Stacking is offered by leading and popular exchanges: Binance, Coinbase, Kraken, KuCoin. This tool speaks to the exchange's desire to retain a user. Reliable exchanges offer users the service of trading with leverage. In this case, the trader trades the exchange's funds on the security of his funds. Leveraged trading is a complex instrument, beginners should not use it without significant experience.

    Depositing, withdrawing and registering on an exchange

    You start working with the exchange by studying the user agreement. You should not neglect a thorough review of this document. If you don't know the terms of the exchange, you can easily lose your investment. Exchanges may restrict or even deny access to trading to citizens of certain countries, to avoid problems with the regulators. Withdrawal of funds from these exchanges may be available only after passing the identity verification procedure. The User Agreement covers all matters of cooperation. If in the process of familiarization the user is not satisfied with its provisions, he can apply to another exchange, thereby avoiding problems. 

    The agreement explains the procedure of deposit and withdrawal. A large number of deposit and withdrawal options indicates the reliability of the exchange. Cooperation of the exchange with the world's leading payment systems confirms its reputation. Popular payment systems do not work with exchanges noticed in suspicious transactions.

    Broex.io is a partner of the largest digital asset trading platform, Binance

    Trading volume

    Cryptocurrency exchanges derive a significant portion of their revenue from commissions on transactions between customers. If there are few trades on an exchange, the income of the exchange is low and there is a risk of the exchange going bankrupt. After studying the user agreement, finding out the actual trading volume on the exchange is the second challenge for the novice crypto trader. Unscrupulous teams at some exchanges conduct fake trades to inflate the trading volume. You can check exchanges for "fake" turnover by examining the trading history of the platform and exchange stats for buying and selling assets. Fake trades are recorded in the trading history, but no orders for specified amounts appear in the market stats. Fake trades usually take place with a set frequency and in identical amounts. 

    Aside from the trading turnover, articles in the specialized media and reviews on forums will tell you a lot about the exchange. An exchange that has repeatedly been successfully attacked by hackers, has leaked users' data and unreasonably delays withdrawals cannot claim to be reliable.

    Overview of major cryptocurrency exchanges

    Around three hundred exchanges are operating in the cryptocurrency market. To get acquainted with all of them, in a minimum amount of time, you will have to spend a lot of time. An overview of the leading cryptocurrency exchanges will help save time and make the right choice.

    5.1 Binance

    In terms of trading volume, Binance has surpassed all its competitors - $1 billion a day. With Binance, you can directly exchange fiat money into cryptocurrency. The exchange supports the euro, US dollar and local currencies.  Low commissions and the possibility of margin trading attract traders to cooperate with the exchange. The high performance allows processing about 1.4 million orders per second. All popular cryptocurrencies are traded on the exchange and there is a full set of tools for trading and analytics. For each cryptocurrency on the exchange, you can create a separate wallet.

    5.2 KuCoin

    A young project, the exchange started operating in 2017, quickly gained popularity in the cryptocurrency community. It is possible to trade anonymously on the exchange, verification is required if the user needs to withdraw 2 bitcoins or more per day. Traders are attracted to KuCoin by low withdrawal fees, a set of professional tools for trading and analysis, competent and responsive technical support. The KuCoin team pays great attention to the safety of client funds. Additional verification features are introduced, cryptocurrencies that the KuCoin team considers potentially malicious are removed from the listing.

    5.3 Huobi

    Huobi is the world's third-largest exchange in terms of the total trading volume. User assets amount to $10 billion. Security of customer funds is ensured by a distributed protection system against hacker attacks, with 98% of user funds stored in multi-signature cold wallets. The exchange has an investor protection fund. For traders, Huobi offers a cashback program, 30% of the commission on customer transactions brought in by the user. Huobi has mobile apps for all operating systems.

    5.4 Bitfinex

    You can trade cryptocurrency on the popular Hong Kong exchange BItfinex as soon as you register. Users are given a wide choice - 130 cryptocurrency assets, spot trading, margin trading with leverage x3.3, 8 types of orders, 24-hour technical support. Users can open three accounts on the exchange at once: credit, margin and trade. Bithinex has the most advanced trading terminal with convenient data visualization.

    5.5 EXMO

    EXMO exchange is characterized by high-security requirements. The emphasis in trading is on the major cryptocurrencies. You can withdraw funds from the exchange in rubles, dollars and euros. High speed of operation, transfers within the platform are made in a few seconds, withdrawal of funds takes no more than 30 minutes and low withdrawal fee made EXMO a popular exchange.

    Conclusion

    In addition to the parameters listed above, when choosing a trading floor, a novice crypto trader should determine what his or her goal is at the moment. Whether it is to buy coins for the long term, to work with exchange instruments or to buy a little bit of currency for the long term - a suitable exchange can be found for each operation. However, it is worth remembering that by registering on an exchange, depositing funds into their account, the user is forced to trust a third party - the service team. For this reason, you should choose the trading floor carefully, without neglecting the details.

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