Cryptocurrency exchanges: The good, bad, and ugly

Vance Carver

The cryptocurrency world is filled with many stakeholders, including investors, traders, users, employees, and more. Because cryptocurrencies hold underlying value for many projects and create a foundational economic model for each individual cryptocurrency project, they must be tradable in order to hold any value. This makes exchange listings an important part of any cryptocurrency project.

What to look for in an exchange

When deciding on a cryptocurrency exchange to list tokens there are several factors to keep in mind. First, safety and security are of the utmost importance. High-profile exchanges from Mt. Gox to Coincheck and many others have seen their exchanges hacked or compromised, losing hundreds of millions of dollars worth of cryptocurrency. Make sure to check an exchange for its regulatory compliance and security measures before allowing tokens to be listed and risking theft.

Second, fiat integration on an exchange can be the missing piece for many users. Currently, there are only a handful of exchanges which allow for fiat trading alongside trading of cryptocurrency. The ability to combine both functions is what will keep users around for the long-haul, allowing them to trade in and out of fiat currency when needed.

Lastly, an exchange with a wide array of cryptocurrencies available for trading is likely to attract more users and trading volume on its exchange. The more coins available for trading, the larger the pool of potential investors and traders which can be attracted to the exchange. This can create market liquidity for tokens which are struggling creating adequate trading liquidity on their own.

Exchanges to avoid

Based on the previously discussed criteria, certain exchanges can be weeded out of the vetting process for listing. Exchanges which don’t allow for crypto to fiat trading, such as Poloniex, Bit-Z, and others will significantly limit users from making all of their desired trades on that exchange.

Although it is impossible to determine at the current moment exchanges which are subject to hacking or fraud, any exchange without proper regulatory compliance and transparency, such as Binance and HitBTC, could in the future be at risk.

Exchanges such as Coinbase and Gemini not only have a limited amount of trading coins available, they are not interested in listing new cryptocurrencies to their exchanges, and therefore are not eligible for up-and-coming tokens.

Exchanges to check out

Kraken provides all of the security and trading needed from an exchange, while at the same time being secure and trusted by the likes of the Tokyo government’s court-appointed trustee, and Germany’s BaFin regulated Fidor Bank.

OKEX may have the largest selection of coins to trade from in the industry and offers fiat to crypto exchanges. However, the exchange is not available to many users around the world, including those residing in Hong Kong, Malaysia, USA, and more.

As Europe’s first bank-grade exchange, ETERBASE is compliant with all European banking standards and is in the process of becoming an Electronic Money Institution (EMI) allowing it to issue fully operational IBAN accounts, similar to any other banking institution. At the same time traders will be able to use fiat currency to purchase coins directly from ETERBASE through IBAN accounts and Euro pairings, making it a one-stop-shop for trading across the industry. For a limited time, ETERBASE is offering pre-listing to the first 30 eligible projects which will obtain Early Adopter status on the new exchange.

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