If you decide to trade cryptocurrencies, you should not settle for anything less than the best cryptocurrency trading platform. You can trade cryptocurrencies through exchanges and online brokers.

The latter offer various crypto-based financial derivatives you can use to speculate on the price-swings of digital assets. If you trade with a broker, you don’t get to own any cryptocurrencies.

If you are keen on gaining ownership of the asset you trade, use a cryptocurrency exchange. Cryptocurrency exchanges feature trading platforms that rival those of online brokers. The digital assets you accumulate through your trading activities are yours to handle as you please. You can withdraw your digital coins from exchanges to your personal wallet, return them to the exchange, etc.

How can you decide if a broker or exchange is good enough for you?


Do not create an account with a broker or exchange before being sure that you have chosen the right destination. The account creation process requires you to share potentially sensitive personal information with the broker or exchange.

Reputation counts in the crypto world. The crypto community is keen on sharing information about devices, services, fiascos, hacks, and stories that build or destroy reputations. Go through the crypto forums searching for specifics on your exchange or broker. What should you seek to find out?

  • What do other users say about the exchange or brokerage?
  • What the exchange says about itself and whether that is consistent with the truth
  • Whether the exchange had any security-related issues in the past and how these incidents played out
  • How did the exchange handle its past problems?
  • Are there any stories the exchange or brokerage does not want you to see?

Exercising Caution

The scams and frauds plaguing the crypto industry are too many to list here. Exchanges get hacked and they go under, taking their users’ funds with them. The possibility of insider theft is also there.

Transparency is always a good sign. It is a good sign if the broker or exchange has a physical address. If you can’t find such an address, move on to a different operator.

Knowing where your exchange or broker is located is important for other reasons as well. Your investments carry legal implications. Unless you know where you’re doing business, you have no way of knowing what these legal implications are.

If someone hacks your exchange and steals your funds, knowing where the exchange is located is a plus. Knowing the jurisdiction gives you access to the regulator and makes it easier to contact the exchange itself.

Warning Signs

Some exchanges or brokers may look like success stories from the outside. At closer inspection, however, they throw up some red flags that should deter you from opening an account with them. Here are a few examples of such red flags.

  • The operation is a chaotic one, routinely neglecting security and compliance issues.
  • Executives and public relations personnel withhold information about security lapses and other issues that cast a bad light on the operation.
  • Reports of insider theft.
  • The exchange launches its own token, then tries to manipulate its price and trading volumes.
  • Senior management engages in high-risk maneuvers with tokens using company funds.

Make Security your Top Priority

Security should be the top factor in your decision to commit to a cryptocurrency broker or exchange. What’s the use of racking up profits through trading if you can never withdraw those profits and may even lose your initial investment to hackers?

As a rule of thumb, the more difficult it is to create an account with a broker or exchange, the more secure it should be.

Easy account creation may be a sign of a rogue operation looking to make it as easy as possible for its victims to walk into the trap. Compliance requires having new clients jump through some legal hoops.

Regardless of how secure you think your exchange is, whenever possible, withdraw your digital assets to a personal wallet, preferably a hardware one. Keeping cryptocurrencies in cold storage rather than online is always more secure. Your exchange should keep its assets in cold storage as well.

Tradable Assets and Fees

Once you are fairly sure that your exchange won’t lose your assets to a hack, you can start thinking about the coins it lets you trade and the fees it charges you. Exchanges make their money from the fees they charge on your transfers. For instance, eToro charges you a 1 percent fee on cryptocurrency purchases and sales. Different exchanges devise their fees in different ways.

Some exchanges charge high-volume traders less. Others tie their fees to transfer size.

As a trader, you must know how fees impact your activity and what assets you can trade.

Well-known and reputable exchanges like Coinbase may not support obscure altcoins as their listing requirements are stricter than those of some shady, recently-launched exchanges. You have to weigh your risks against the rewards if you insist on trading such altcoins.


If you want to buy a bitcoin, you must have someone at the exchange willing to sell you one as quickly as possible for the right price.

Likewise, if you want to sell a bitcoin, you need a buyer for it as quickly as possible.

When exchanges allow you to buy and sell your assets instantly and seamlessly, they have good liquidity. Large trading volumes tend to reflect good liquidity.

The most popular exchanges feature the most generous trading volumes. Shady exchanges may resort to wash-trading to fake high trading volumes.

In addition to this checklist, you should also consider preference-related factors such as:

  • Whether you like the mobile app of the exchange or not
  • How easy it is for you to use the exchange
  • The effectiveness of the customer support
  • The educational tools the exchange/broker offers.

The crypto space is evolving dynamically. It rewards the constant willingness to learn and keep up. The best investment of your time as a crypto trader is, therefore, to learn as much as you can all the time.