No official Bitcoin exchange exists for users. These factors to consider when finding best Bitcoin exchange from available choices.
Everyone is going crazy to buy Bitcoins in some or the other ways. But, buying Bitcoins through a reputed Bitcoin exchange is the most popular way.
Bitcoin exchange is an online digital marketplace that allows users to trade Bitcoins & other forms of cryptocurrencies for fiat currencies & vice versa.
According to a post published in CNN Money, popular messaging app Line is planning to launch its own Bitcoin exchange to trade digital currencies.
This significant step will allow its more than 170 million users to trade Bitcoins through their Smartphone. Cryptocurrency exchanges are making fat profits right now. It is mainly due to growing market in the digital currencies.
Some of the most popular Bitcoin exchanges include Bitstamp, Bitfinex, Coinbase, Cryptsy, BTC-e, BTCChina, & manymore.
Several exchanges also allow users to trade different cryptocurrencies for one another. In these transactions, the exchange rates for each & every deal are set by individual buyers or sellers depending on the fair price.
However, the overall price trend is an outcome of the average price of all deals that has happened on all exchanges at any given time. Therefore, Bitcoin exchange serves as the middleman for users to buy & sell the Bitcoins.
You just need to select only the right exchange for your needs. Here are 11 factors to look when selecting right Bitcoin exchange:
[You can also watch an exciting video on this post from GetUpWise channel on YouTube.]
(1) High Liquidity & Good Market Depth
It is one of the most significant factors to consider when finding best Bitcoin exchange. Market liquidity is the ability of an asset like Bitcoins to be converted into cash quickly on demand. It also means that traders should be able to buy or sell Bitcoins at a fair price on a given exchange.
There should not be discounts or premiums attached during buy or sell of Bitcoins. Liquid markets are usually deeper & smoother as compared to illiquid markets.
On the other hand, market depth of Bitcoins is the measure of the number of open orders to buy & sell Bitcoins. Market depth is closely related to liquidity & volume within a trading instrument like Bitcoins.
Since, no official Bitcoin exchange exists for users. It’s important to never underestimate the significance of liquidity & market depth when selecting the best Bitcoin exchange for trading purpose.
Nevertheless, Bitcoin liquidity continues to improve with time. Several industry experts believe that this trend to continue in coming years. This will happen perhaps due to increased awareness, wider acceptance, & favorable regulations for Bitcoins.
- Best Bitcoin Exchange: Shutterstock