The Top 10 Considerations for Selecting a Bitcoin Exchange in 2024
You’re thinking about switching exchanges, or maybe you’re looking to find an exchange for the first time. What are the important things to consider?
Look into the fee structure of the exchange.Get the most amount of Bitcoin per dollar you put into the exchange. Consider the costs holistically. The direct fees, the buy - sell spread on the exchange, any withdrawal fees.
It all adds up and it all makes a difference. Many exchanges offer ‘zero fees’ and then gouge their users with a large buy and sell spread. Look at the whole score.
Assess how straightforward it is to transfer your Bitcoin to a personal wallet. Can you withdraw directly to self-custody or do they require you to jump through hoops to be able to withdraw?
How easily you can move money between your bank account and the exchange is a critical factor. What are the fees? What are the time delays?
The best exchanges make it simple to deposit and withdraw fiat currency. This often depends on where you live. So the best exchange for one person isn't necessarily the best exchange for you.
This cuts both ways. Do you want to trade crypto? Or are you just looking for access to Bitcoin. Different strokes for different folks.
Depending on your personal beliefs, the range of cryptocurrencies offered by an exchange can be a significant factor.
Some investors want a Bitcoin only service, because it’s the only thing they truly believe in. Others want the opportunity to speculate on different tokens.
Most exchanges will require you to upload documents to fulfill KYC rules. If you want to avoid this, your options are limited to Peer to Peer Marketplaces like Peach Bitcoin.
If you’re happy or willing to do KYC you still want to find somewhere that makes it easy to comply. The last thing anyone wants is repeated back- and forth with requests for photos of you holding a driver's license. Some exchanges are much more efficient at this than others.
User experience, particularly on mobile platforms, and the quality of customer service are crucial. A user-friendly interface and reliable customer support can greatly enhance your experience.
How responsive is the exchange to queries? Is their mobile app simple to use? These are basic differentiating factors.
This gets back to the first consideration - fees. If you can use lightning withdrawals it makes transactions cheaper and faster. If you want to do something a daily DCA and withdraw to self-custody, lightning makes a huge difference.
Even if you plan to withdraw your crypto immediately, you need to trust the exchange with your funds temporarily. Choose an exchange with a strong track record of ethical behavior and a history of protecting assets without security breaches.
Look at where the exchange is based. The rules and regulations governing the exchange should impact your overall trust in the exchange.
Coinbase for example, is a publicly traded company based out of the USA. This doesn’t guarantee security but it’s a better bet than a start-up operating out of the Bahamas.
Finally, look at user reviews for firsthand insights. If you could ask a knowedgable friend, that would be great but short of that, see what other users have to say. Get users perspectives on the strengths and weaknesses of the different platforms.
Chances are certain factors are going to matter to you more than others, so do some research and make up your own mind. At Apollo we've built a free exchange discovery tool to help you filter out exchanges based on what's important you. Check it out and let us know what you think.