How to select the right Crypto Broker

How to select the right Crypto Broker

Crypto-currency is one of the most impactful global economic phenomena in the world. A lot of people who want to be a part of this juggernaut simply lack the knowledge to do so. This dearth of information can lead to a catastrophe for potential investors.

Since it is not regulated by the governments or other financial agencies, the decentralized system has become popular for leveling the playing field. But, it has also remained out of an ordinary person’s reach. So, let us learn how you can invest and trade in crypto-currencies with adequate knowledge.

One of the most essential aspects of purchasing a Bitcoin et al is that one needs to know about crypto-currency exchanges. These are the online brokers, which help you trade in the digital currencies. A broker’s quality can make or break your investment, thus extreme caution must be advised.

In this article, we will show you what all aspects of a broker you must keep in mind so that you are well-informed before you take the plunge. Since we are dealing with economics, things may change, but at least you will be prepared for it. Thus without further ado, let’s begin.

Where is the broker located?

It is a vital piece of information, which one may not realize at the time. Regulations and laws may vary from country to country and can be a huge deal-breaker. It is recommended that you buy crypto-currency in your native country.

The country where their operations are based can also play a huge role in what physical currencies they will accept. You must read their terms and conditions in order to make certain that they accept your currency.

How can you purchase crypto-currency?

Do they accept cash, PayPal, credit cards etc.? Or do you have to pay via wire transfer? These are important questions that you must know before diving headfirst into an exchange. Pick the one that you find most convenient and go ahead with it.

Are the brokers transparent?

The truly trustworthy brokers publish their audit information or cold storage addresses online in order to let their investors know how to authenticate their crypto reserves. The audits are a great way for you to know that they possess the liquidity to cover all the exchange sales taking place through the digital currencies.

What exchange fees does the broker charge?

You must make sure that the brokers are not charging you exorbitant exchange fees relative to the rest of the exchanges. A good way to do this is to check multiple exchanges before zeroing in on the one that seems most reasonable to you.

However, you must also be certain that the exchange in question is not charging you additional fees over the transaction fees. Fees are also subject to change so, you must be mindful of that and read their terms properly.

What is the volume of the broker’s order book?

Simply, an order book is a list of sell and buy orders that the broker is offering to its customers. All the established brokers with a sizable client base broadcast their order book. A higher volume of order book signifies its popularity and also that it has the liquidity to cover the transactions.

However, the inverse is not true. If an exchange does not display its order book, it does not mean that it is an illegitimate exchange. It may simply mean that their volume is lower than that of its competing brokers.

How secure is the exchange?

Security must be given a priority. Does the broker’s website have SSL certification (HTTPS, instead of HTTP)? Does it offer 2FA (Two-factor authentication)? You must consider them before going forward.

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