If you’re looking to make your first Bitcoin investment, you’ll be glad to know that buying cryptocurrency is very easy nowadays. This is thanks to brokers, also known as crypto exchanges. There are currently more than 5,000 of them on the internet, each offering traders a platform on which they can buy and sell their digital currencies.
Of course, not all brokers are made equal, and the crypto market has more than its fair share of dubious services and outright scams. Even among those that are generally reliable, there can be other issues such as poor security measures and needlessly high fees. Therefore, it’s crucial that you choose the right Bitcoin broker. Here’s how.
Getting Started
As you begin searching for your ideal crypto exchange, you’ll need to consider several factors. This includes credibility, security, prices, customer service, and user experience. It can take some time to run through all these factors when assessing a platform, but it will certainly be worth it in the end.
The alternative approach is to simply consult a reliable source for information on the top Bitcoin brokers. There are countless comparison lists and reviews detailing leading cryptocurrency platforms, but you can read more about the best Bitcoin brokers via the linked guide.
Security
It’s important that your crypto investments are safeguarded against any form of cybercrime. That’s why security is a key factor to consider when choosing a broker. Look out for the following:
- Auditing programs that monitor activity on the website
- Two-factor authentication to protect logins
- Deposits should be stored offline (cold storage)
- Option to whitelist your IP or withdrawal addresses
- Web address starts with HTTPS (not just HTTP)
Legal
The most secure brokers are generally the most legally compliant. To stay on top of regulations, it’s wise to choose an exchange that’s located in your country. Be sure to look into their financial banking. You don’t want to risk dealing with a service whose base asset is the same as your investment. The broker’s funds should also be insured against losses.
Transparency
While you’re looking into the legal aspect of a Bitcoin broker, make sure to assess their transparency as well. Can you see where their headquarters are situated? Do you know who the owners and team members are? Trustworthy exchanges also specify the address of their cold storage systems and provide audit information.
Fees
As long as the broker is transparent, you should be able to compare all of their fees. In general, transactions cost less than 1% of the exchanged amount and decrease with higher volume trades. Also check the deposit and withdrawal fees, as these tend to be the highest.
One final aspect that we haven’t mentioned is the user experience. Navigating and interacting with the broker’s platform should be pleasant and not confusing or tedious. If anonymity is important to you, make sure that the exchange doesn’t demand that you reveal your identity to use their services.