Investment Platforms: Crypto Options For Savvy Investors

Cryptocurrency is a digital currency that lacks a central bank and can be bought, sold, and traded on crypto exchanges. Crypto exchanges are platforms that allow users to trade fiat currencies for cryptocurrencies and vice versa. They also enable crypto-to-crypto trading, letting users exchange one cryptocurrency for another.

Some well-known crypto exchanges include Coinbase, Kraken, Crypto.com, Gemini, Bisq, and Pionex.US. Each platform offers its own set of features, cryptocurrencies, and fee structures, catering to different user needs, such as beginner-friendliness, advanced trading tools, low fees, or a wide range of supported currencies.

It's important to note that crypto exchanges vary in terms of security, liquidity, user interface, geographic availability, and regulatory compliance. Users should carefully consider their priorities and conduct thorough research before choosing an exchange.

Crypto exchange fees

Trading Fees

Trading fees are charged every time you buy, sell, or swap a cryptocurrency on an exchange. These fees are typically categorized into "maker" and "taker" fees. Makers add liquidity to the market and are charged lower fees than takers, who remove liquidity. Maker fees can range from 0 to 0.2%, while taker fees can go up to 0.5% or higher, depending on the exchange and trading volume. Some exchanges offer a fixed percentage for both makers and takers, while others have a tiered system where fees decrease as trading volume increases.

Withdrawal and Deposit Fees

Crypto exchanges also charge fees for depositing and withdrawing fiat currencies and cryptocurrencies. Typically, depositing and withdrawing fiat currencies incur higher fees compared to cryptocurrencies. Most exchanges don't charge for cryptocurrency deposits but may charge a flat fee or a percentage of the withdrawn amount for withdrawals.

Other Costs

In addition to the above-mentioned fees, some crypto exchanges may charge extra for specific services, such as account maintenance, inactivity, margin trading, and special trading features.

Security and storage

The security and storage of your cryptocurrency is paramount. Crypto account hacking is on the rise, and with the surge in prices of Bitcoin and Ethereum, virtual currencies are a target for hackers. When a cryptocurrency account is hacked, investors have no legal recourse since virtual coins are still unregulated by a government entity or central bank.

There are two types of wallets: hot and cold. Hot wallets are connected to the internet and are relatively easy to use. However, they are vulnerable to hackers and malicious code. Examples include mobile apps and desktop wallets. Cold wallets, on the other hand, are not connected to the internet and are thus more secure. Examples include hardware wallets and paper wallets.

It is recommended to use a combination of both hot and cold wallets for your crypto assets. Keep the majority of your cryptocurrency in an offline or physical wallet, such as a hardware wallet or paper wallet, stored in a secure place like a safe or safety deposit box. Only keep a small amount of currency in an online wallet for trading purposes.

When choosing a hot wallet, it is essential to consider the security features offered by the platform. Reputable platforms will incorporate multi-factor authentication, SSL/TLS encryption, and air-gapped devices that are kept offline when storing cryptocurrency. Additionally, using more than one cryptocurrency platform can be safer, provided that strong and unique passwords are used for each platform.

To further protect your crypto assets, it is crucial to safeguard your private keys. A private key is a long alphanumeric code that allows you to access and approve the transfer of your crypto assets. Losing your private key or having it stolen can result in losing access to your assets. It is recommended to store your private key in a safe or bank safe deposit box, or use a hardware wallet that encrypts and stores your private key.

Another critical aspect of security is protecting yourself from mobile phishing. As the use of mobile apps for cryptocurrency management increases, malicious hackers are motivated to target investors with mobile phishing campaigns to steal login credentials. Be cautious when receiving messages or emails that prompt you to take action, and avoid clicking on suspicious links.

Finally, it is important to research the security measures employed by the crypto exchange or platform you choose. Some platforms, like Gemini, offer robust security protocols, insure user funds, and are SOC 2-certified. Others, like Coinbase, provide insurance for digital funds held on behalf of users and store them in Federal Deposit Insurance Corporation (FDIC)-insured bank accounts.

Customer service

Coinbase, for example, has been praised for its user-friendly platform, but has received poor user feedback due to issues with customer support. Crypto.com has also been criticised for its poor customer support.

On the other hand, Kraken has been praised for its good customer service options, including a chatbot and phone support. Gemini, meanwhile, has been criticised for its limited customer service options.

Other platforms offering customer support include Pionex.US, which provides tutorial, live chat and email customer support, and Bisq, a decentralised exchange that follows the ethos of Bitcoin.

Ease of use

When it comes to ease of use, some crypto exchanges are more beginner-friendly than others. Here are some of the top crypto platforms that offer a user-friendly experience:

• Coinbase: Coinbase is often recommended for beginners due to its intuitive interface and educational resources. It offers an easy-to-use platform with a simple asset purchase process and a broad assortment of learning materials. However, Coinbase's fee structure can be confusing, and its fees are higher compared to some other exchanges.
• Robinhood: Robinhood is known for its user-friendly mobile app, which makes trading crypto, stocks, and options accessible to everyone. While it doesn't offer advanced trading features, it provides a simple and straightforward experience for those new to crypto.
• Kraken: Kraken offers a customizable interface that allows users to choose and arrange trading modules according to their preferences. Its advanced trading platform, Kraken Pro, provides a wealth of tools for experienced crypto traders, but it may be less intuitive for beginners.
• Gemini: Gemini is well-suited for traders of all skill levels. It offers a simple, intuitive user interface, making it easy for beginners to navigate. However, its fee structure can be convoluted when not spot trading.
• Crypto.com: Crypto.com's mobile app is highly regarded for its ease of use and the wide range of features it offers. Beginners will find it user-friendly, while more advanced traders can benefit from its customizable alerts and watchlists.
• Public: Public is a beginner-friendly platform that focuses on financial literacy and education. It provides a simple and accessible investing experience, but it lacks certain advanced tools and direct crypto withdrawal options.

When choosing a crypto exchange, it's important to consider your level of experience and comfort with the platform. Some platforms cater more to beginners with straightforward interfaces and educational resources, while others may be more complex but offer a wider range of features and lower fees.

Cryptocurrency selection

When it comes to choosing a crypto exchange, the number of coins on offer can vary widely, from just two to more than 250. If you're looking for anything more than Bitcoin, Litecoin and Ethereum, you should probably consider a pure-play crypto exchange rather than a traditional broker with a crypto offering.

• Robinhood Crypto: 15
• Interactive Brokers: 4
• Coinbase: 200+
• Kraken: 200+
• Crypto.com: 350+
• Fidelity Crypto: 2
• EToro: 27
• Binance: 300
• Webull: 5
• Cash App: 1
• Bisq: Not disclosed

While the number of cryptocurrencies on offer is an important factor when choosing a crypto platform, it is also worth considering other features such as fees, security, and regulatory compliance.

Frequently asked questions