Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Key Things to Look for When Choosing a Crypto Trading Platform
Ruby Layram
19th Dec 2024
When it comes to crypto trading, choosing the right platform is just as important as picking the right coin to invest in. After all, the platform you choose will affect everything from how secure your investments are to how easy it is to manage your assets and get help if you run into trouble.
So, if you’re new to crypto or just on the lookout for a new platform, it’s essential to know what to keep an eye on to make sure you’re getting the best possible experience.
In this guide, we will reveal 5 key things to look for when choosing a crypto trading platform to make sure that you pick the best of the bunch.
1. Sticking power
One of the most underestimated factors to look at is how long the platform has been around. Unfortunately, the crypto space attracts a lot of unstable exchanges and trading platforms that struggle to stay in the game. Investors who put their money into these platforms are more at risk of being unable to access their funds if things go south.
For this reason, it is important to look for a platform that has been in the game for years. Kraken is a good example of a cryptocurrency trading platform that has been operating successfully since 2011.
Sticking power is a good sign that a platform knows how to handle the ups and downs of operating within the crypto space. These platforms are often the most reliable and provide the best services.
2. Security and Safety
Let’s face it: security in the crypto world is paramount. Yes, you could choose to store your assets in your own digital wallet, but many people—especially those just starting out—prefer the convenience of leaving their crypto on a platform. And if that’s you, then finding a platform with rock-solid security should be your top priority.
Not all platforms are created equal when it comes to security. A good example of this is the now-defunct FTX, which famously underinvested in cybersecurity and lost $477 million to the hands of a hacker.
In a market that attracts malicious parties, you want a platform that invests heavily in its security infrastructure. Look for certifications like ISO27001, an industry-standard security framework that indicates the platform has invested in developing a strong security culture.
3. Dedication to Regulatory Compliance
In the UK and many other regions, the Financial Conduct Authority (or FCA) sets high standards for companies dealing in crypto, and for good reason.
Compliance with FCA regulations indicates that the platform is not only secure but also committed to lawful and ethical practices. This means that the platform is more like to keep running and won’t be shutdown.
Look for a platform that’s registered with the FCA or similar regulatory bodies in your country. This signals that the platform has undergone rigorous checks and is held to standards designed to protect investors.
A compliant platform also gives you confidence that they’ll play by the rules, offering you a bit more peace of mind.
4. Award-Winning and Accessible Customer Support Services
Even if you’re a pro with tech, crypto is complex and ever-evolving. For newbies and experienced traders alike, accessible customer support is incredibly valuable.
Imagine transferring funds, only to find they didn’t show up in your account, or needing to reset your password in a hurry—good customer support can make a big difference here!
Some platforms only offer support through social media or email, which can leave you waiting hours (or even days) for a response. Instead, look for platforms that provide multiple support channels, including phone support, in-app live chat, and dedicated email services.
Platforms that have won awards or received recognition for customer service tend to have more efficient systems in place, so these awards can be a helpful indicator of quality. At the end of the day, being able to reach out and actually talk to someone if something goes wrong can be priceless.
5. Access to Liquidity and Stable Order Books
Liquidity is a fancy term that refers to the ability to buy or sell assets without a big change in the asset’s price.
In crypto trading, where prices can shift within seconds, liquidity is key.
A platform with good liquidity ensures that your orders can be executed at the price you want and without unnecessary delays.
Think of it like ordering your favourite item online—if the store is well-stocked, you get what you want when you want it. But if it’s out of stock, you have to wait or settle for a different price.
Good liquidity on a platform prevents this issue and makes sure that, no matter what’s happening in the market, you can make trades without interruptions.
6. Other Factors to Consider
Besides sticking power, security, compliance, support, and liquidity, there are a few other factors that can determine whether or not a crypto trading platform is a good one to use. Here are a few to keep in mind:
Fees and costs
Every platform has a different fee structure, so you’ll want to choose one that fits your trading strategy. Some platforms charge transaction fees, while others have lower trading fees but higher withdrawal fees. Think about how often you’ll be trading or withdrawing funds, and compare costs across different platforms.
Long-term investors won’t be trading that often so should pay attention to inactivity fees, overnight fees and account management fees. However, frequent traders may want to pay more attention to trading fees and withdrawal fees.
User Experience and Interface
A user-friendly platform is a huge plus, especially for beginners. Look for platforms with intuitive interfaces, clear navigation, and easy-to-access features.
It’s also a big plus if the platform offers a mobile app that lets you check your investments on the go, make quick transactions, or easily set up security settings can make trading a much smoother experience.
Educational Resources
When it comes to making investment decisions, the more you know, the better!
The best crypto trading platforms should provide educational resources that can help you to improve your knowledge and make informed decisions. They might offer tutorials, articles, webinars, or even live sessions to walk you through the basics of crypto.
If you’re new to the market, having these resources at your fingertips can help you learn quickly and avoid common mistakes.
Range of Crypto Assets
Finally, think about the platform’s range of available assets. If you want to diversify your portfolio, choose a platform that offers not just the major coins like Bitcoin and Ethereum but also a good selection of altcoins and stablecoins.
Be careful here! Some lesser-known cryptocurrencies can be very risky. They might look attractive on the outside (low price, enthusiastic community, and great marketing), but they can quickly plummet.
Look for an exchange that carefully assesses all coins that are listed on the platform. The stricter the listing criteria, the better!
Choosing a crypto trading platform is about much more than picking the one with the lowest fees or the trendiest look. By considering factors like security, regulatory compliance, customer support, liquidity, and additional features, you’ll be well-equipped to make a decision that’s right for you.
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