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The crypto boom took the whole world by storm. The concept of digital currencies and the idea of the ‘blockchain’ grew alongside understandable criticism, stigmatised by traditional investors and brick-and-mortar financial institutions as just another short-lasting fad. Years on, digital currency has become a lasting part of the global financial woodwork, with entrepreneurs, leading investors and key payment providers slowly getting on board.

As we grow increasingly digitalised, the concept of digital coins and currencies seems not so far-fetched; hence, trading in cryptocurrency continues its exponential growth. For new traders, cryptocurrency translates to a whole world of excitement, supported by the online ‘become a millionaire’ narrative. Crypto can be daunting but picking a cryptocurrency exchange is the first checkpoint for a new trader – a decision that requires much thought, bearing in mind the wide breadth of today’s different exchanges.

There are endless factors involved in picking the right crypto exchange, but here are some of the most fundamental factors:

Authenticity

First and foremost, authenticity. Although crypto has surpassed its identity as a nuanced trend, the risk of eager scammers looking to cash in still remains. Early exchanges and trading platforms were common targets for hackers. Poorly articulated security protocols and fledgling infrastructure painted cryptocurrency exchanges as the perfect targets, bolstered by a lack of central regulation and security.

Now, a surge in popularity and trust means popular online exchanges have amped up their security measures, tasked with preventing crypto assets from any fraudulent activity.

Still, looking over past reviews and the platforms’ reputation while looking over the security protocol should shine further light.

Liquidity

Again more of a problem with new platforms. Strong liquidity is a key factor for any reliable cryptocurrency exchange. Liquidity describes the availability of assets for a particular market or company. Looking at the financial markets, consistent high liquidity acts as the backbone for real-time trading, meaning traders can buy and sell at any time – important in modern-day trading.

An exchange needs to have a high enough volume of orders flowing through its system at all points during the day. The only way to establish a reliable trading volume is to either build up a firm enough user base or have enough consistent high-volume traders to maintain liquidity. If liquidity is on the short side, price changes can be exacerbated in times of heightened volatility – a common theme in the crypto markets. In short, traders should pick an exchange with a strong, long-standing user base to ensure there are no issues with liquidity when attempting a trade.

Choice of Tokens

A token is another word for the coin purchased, or the actual digital asset being traded. Even if crypto isn’t your thing, you’ve probably heard of Bitcoin. Despite this being seen as the mother of all cryptocurrencies, its digital relatives have outgrown its niche heritage. Alongside equally popular Ethereum exists a vast range of coins that can be purchased. A trader needs to be clued up on specifically what coins an exchange offers before depositing any capital, aside from the obvious transaction fees that vary across exchanges. For example, leading provider Binance offers a wide range of tradeable coins, whereas rival Coinbase focuses on four main cryptos. If you’re just interested in trading Bitcoin or its other main cousins, most exchanges should suit you.

Ease of Interface

Last but certainly not least, an exchange’s user interface is an incredibly popular pull factor, especially for beginners baffled by the more complex trading technicals. An intuitive, clear-cut platform translates to a more user-focused trading experience. Platforms are learning to strip back the complexities in favour of a more simplified layout focused on ease and efficiency.

So scout out all the options on offer and find an exchange that you like the look of and includes functionalities that suit your crypto knowledge; it’s completely subjective, after all. Over the last few years, we’ve learnt that the exchanges with the best ‘user experience’ are the quickest-growing platforms – speaking volumes for the popularity of easy-to-use interfaces and their importance in picking a platform that works well for you.