Cryptocurrency Exchange
The place you invest in cryptocurrencies
Understand the risks behind before investing
Learn About Crypto-exchanges
How to invest in cryptos through cryptocurrency exchanges?
Establish an account with the cryptocurrency exchange. You will need to provide your personal information and verify your identity to complete the registration process.
Fund your account with fiat money. Before you can buy any crypto, you need to fund your exchange account with another currency, such as U.S. dollars.
Decide which cryptocurrency you want to buy. You can choose to invest in one or many cryptocurrencies. Research your options to help you decide.
Place a buy order for your chosen cryptocurrency. Follow the steps required by the exchange to submit and complete a buy order for one or more cryptocurrencies.
Be aware!
How to pick a cryptocurrency exchange?
In order to pick the best exchange, we have to consider the following criteria:
Traded Assets
All exchanges offers spot trades for large coins like Bitcoin and Ethereum, while some of them allow more assets like altcoins spot trades, derivatives trades, NFT trades.
Transaction Fees
Every exchange has different fees for different assets, including taker fees, maker fees, funding fees. Research before investing to get the cheapest fee.
Payment Methods
Legit exchanges allow direct crypto deposits and withdrawals, make sure to check if you can withdraw cryptos before depositing money. Some exchanges also allow credit card trades and Peer-to-Peer transfer.
Security
Using an exchange with assets stored in offline, cold wallets which have advanced encryption reduce the your personal asset being stolen by hackers.
Before you invest, you have to be wise!
Deceptions related to cryptocurrency exchange
One of the most common scams in cryptocurrencies is fraud websites and apps. Fraudsters create a website or app which pretends to be a legitimate crypto exchange. They will ask victims to put money to the webite that is entirely controlled by them. When they try to withdraw their money, fraudsters come up with different excuses to ask victims to deposit more money so they can get thier money back. At the end, when they realise it is a scam, their money is already gone.
To prevent falling into these traps, never rush in descion making, always do researches before putting money into an exchange. Also, pick the largest exchanges and always avoid suspcious exchanges that claims to have high returns opportunities.
Understand different Exchanges
Regulated & Non-regulated cryptocurrency exchange
Other than scam exchanges, investors should also be aware of exchanges that are unregulated. As cryptocurrency trading became popular, there is an increase in number of new exchanges. Some of them are regulated and require licencing, yet some are not. Investors should always check the exchange background and liquidity, so their asset kept in these exchanges will not suddenly vanish.
From the FTX crash, investors learnt the lesson that even the money put in largest exchanges have a certain amount of risk. Aside from choosing a large exchange to minimize the risk, investors should always check news of the market. They can also consider putting their money into hot or cold wallets, which has an external address for storage, keeping their money out of the exchanges, so even if the exchanges went down, their assets will not be gone.
Do you know these brands?
Popular Cryptocurrency Exchange
Kraken
Kraken is a United States–based cryptocurrency exchange and bank, founded in 2011. Kraken's top-notch security, low trading fees and solid range of available cryptos makes it a good choice for investors who are just experimenting with crypto as well as more experienced traders.
Coinbase
Coinbase secures cash on FDIC-secured accounts, lets you securely connect and trade crypto via your bank account, and blocks suspicious accounts to ensure user safety.
Binance
Binance offers a relatively secure, versatile way to invest in and trade cryptocurrencies. Binance could be overwhelming for beginners and experienced traders alike. Binance offers lower fees than many other cryptocurrency exchanges.
Disclaimers: The information on this site is for general information purposes only. It is intended to be used by virtual assets investors, but it does not constitute professional advice, whether legal or otherwise, and does not purport to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content. LITELAB@HKU does not accept responsibility for any loss that may arise from accessing or relying upon the information contained on this site.