How to Choose a Crypto Exchange: A Complete Guide

In simple terms, a crypto exchange is a marketplace where you can buy and sell cryptocurrencies.

You should consider at least the following 7 factors when choosing a crypto exchange: fees, crypto offering, security, customer support, mobile or web based experience, key features and interface, and experience level. Lets take a closer look at each factor below.

Your first main consideration, especially if you plan to frequently invest in crypto, should be the fees you will be charged when using an exchange. Crypto exchange fees can typically be broken down into three categories.

Buy and sell fees: These can also be referred to as trading fees, and are the fees you will pay every time you buy or sell crypto on an exchange. Most exchanges use a volume based maker-taker fee schedule for these fees. Makers "create" a market by selling and bringing liquitidy to an exchange, where as takers "remove" liquidity from an exchange by taking orders. Taker fees are typically higher than maker fees for this reason.

Funding fees: Certain exchange's will also charge you a fee depending upon how you fund your crypto purchases. For example, Crypto.com does not charge any sort of fee if you fund your purchases using a bank transfer, but do charge a 2.99% fee for debit and credit card transactions.

Withdrawal fees: Finally, many crypto exchanges will also charge a small fee for each individual crypto when you decide to withdraw that crypto from the exchange.

Your second consideration should be if your exchange offers the crypto that you want to invest in. Almost all major exchanges offer popular cryptos such as Bitcoin, Ethereum, XRP, Solana, and more. If you want to trade smaller, and lesser known cryptos, you will most likely have to seek out smaller exchanges. Make sure your exchange has the crypto you want before signing up.

It is no secret that a variety of crypto exchanges have had security breaches comprimising account information that resulted in client losses. With this in mind, never sign up for a crypto exchange before you check what kind of security the exchange offers to keep both your assets and information safe.

We recommend looking at account security, asset security, and overall security practices for any exchange you are considering using. You should also research if the exchange you are considering has ever been hacked and what they have done to address the issue.

The good news is that almost every crypto exchange openly discloses their security practices for the public to review. When you are considering an exchange, go to the bottom of their website and look for a link to their security practices within the website footer.

Next, you should consider what level of customer support you want. The level of customer support offered varies from exchange to exchange. Most exchanges offer at least basic support such as an online help center and a virtual chat feature. However, there are also exchanges that offer additional levels of support such as live customer service reps over the phone. Kraken would be an example of an exchange that offers this.

What do you want your trading experience to be like? Certain exchanges, such as Crypto.com, only offer a mobile based investing experience. While this is great for convenience, you might be someone who would want both a mobile and a web based version of your exchange on your laptop or desktop. Check out if your desired exchange is limited to just a mobile or web based version, or if it offers both.

If you are going to consistently invest in crypto using an exchange, both the interface and features should be desireable to you. In terms of interface, we recommend going with something that is modern and crisp as usability will be easier. In terms of features, you can look for some popular ones listed below.

Rewards: Many crypto exchanges will pay you crypto rewards for a variety of actions including staking, defi yielding, and spending your crypto. Certain exchanges also have additional ways you can earn rewards such as Coinbase's learning rewards.

Wallet: A crypto wallet stores your private keys, which keeps your crypto safe and allows you to send, receive, and spend your crypto.

Pay: Certain crypto exchanges allow you to make purchases with your crypto through the exchange. For example, Gemini offers a credit card, Coinbase offers a Visa debit card, and Crypto.com allows you to make purchases directly through their app with a variety of brands.

Education: Since crypto is such a new financial product, many exchanges offer educational libraries to help you understand what crypto is and how to use it.

Finally, you should consider what experience level is required to get the most out of each exchange. Certain exchanges are geared more towards advanced level investors, where as others, such as Gemini, are geared towards new investors. The biggest indicator of whether an exchange is for beginners or advanced users is the interface and features.

In conclusion, choosing the right crypto exchange will ultimately come down to your individual goals, and preferences. The factors listed above can provide guidelines when choosing an exchange. We should emphasize that above all else, you should make sure that the exchange you are choosing is secure, well known, and has a great reputation as crypto is still a very high risk investment. If you are not sure if crypto is the right investment for you, we always recommend consulting with a licensed financial advisor to get expert opinions and help.