Crypto Exchange: The cryptocurrency market is volatile, unregulated, and a bit risky as compared to the traditional trading market. However, it keeps attracting beginners and pro traders as it can yield more profits as compared to conventional trading.
In the past few years, the cryptocurrency market has had a large influx of traders. Now, if you want to start trading in this market, you need to take the help of a cryptocurrency exchange. Just like the stock exchange, the Cryptocurrency exchange allows you to buy and sell cryptocurrency.
But before you start trading using a cryptocurrency exchange, you must know that they charge a fee based on your 30-day trading income.
Here are a few things that you should consider before using a cryptocurrency exchange for trading in this market.
• Fee structure
When using a cryptocurrency exchange, you will have to pay different types of fees such as mining fees, wire fees, spot fees, account fees, and tiered fees. The usual structure of cryptocurrency exchange is a maker and taker structure.
The maker sells cryptocurrency to create an exchange. Whereas a taker buys the cryptocurrency to complete the exchange. Both maker and taker are charged a fee based on their trading volume. For example, a trading volume of $10,000 may incur a fee of 0.50% on maker and taker.
The fees will vary based on the cryptocurrency exchange you use to trade. Also, as a maker, you might incur lesser fees as you increase your trading volume. This is because makers create liquidity in the cryptocurrency exchange. Hence, the benefit!
If you didn’t know this already, cryptocurrency is unregulated and even considered legal in some countries. Hence, your location of trading matters the most. If you want to know which countries consider cryptocurrency legal and illegal, you can read our previous blog on the same on our website.
Your trading location will determine the type of services you get from the cryptocurrency exchange. For example, in the US cryptocurrency, exchanges are registered under the Financial Crimes Enforcement Network. This makes all the cryptocurrency exchanges in the US regulated. This will affect the services you get.
Now, you might already know that there are thousands of different cryptocurrencies in the market. This means you can trade on all of them if you want. But not all cryptocurrency exchanges will give you access to all cryptocurrencies. Some might offer only the popular ones, whereas some might offer hundreds.
If you want to trade multiple cryptocurrencies, you might have to use different exchanges to gain access to trading them all.
When you want to use cryptocurrency exchange to trade in this market, you need to consider these three points. These will largely affect how much profit you make and how much fees you pay. So, before you start trading, get to know the cryptocurrency exchange.
Happy Trading to You!