Bitcoin, otherwise the rising virtual currency of current times which defines how advanced technology would do to our current financial world. The first form of cryptocurrency which came into existence was Bitcoins and still rising as far its popularity is concerned. It is a form of digital currency which works on the concept of cryptography. Being decentralized and anonymous, it has seeped into our current world economy. Even though they are virtual, they definitely have its value with respect to fiat currency. So, the platform/marketplace where traders can buy or sell Bitcoins using the different forms of fiat currency is called bitcoin exchange. The currency ticker used for Bitcoin is BTC/XBT. Mt Gox is one of the largest bitcoin exchange widely known before it was closed. There are online platforms which act as intermediates between the buyers and sellers and help in matching them.The traders can buy or sell bitcoins either in market order or limited order.
All Bitcoin exchanges have a transaction fee that is levied to each completed buying and selling order and is dependent on the volume of the Bitcoins transaction. Along with this fee, a currency conversion fee is also levied depending on the currency that is accepted by the bitcoin exchange.
The bitcoin exchange rate is the value which the buyer and the seller of the currency agreed upon which depends on the market.
Now let’s dig deep in these Bitcoin exchange what to be considered for doing the exchange.
How to choose the right Bitcoin exchange?
Here are some valuable tips, as to what to look for in a Bitcoin exchange:
Since Bitcoin value is fluctuating, it is essential to look out for the amount of liquidity the exchange has. Liquidity is the ability to buy/sell without affecting the price in a great deal. The trading volume determines the liquidity of that exchange.
The bitcoin exchange charges a fee for the process of currency exchange. This fee is on a percentage basis, which is to be considered for an exchange.
The location of your Bitcoin exchange which would determine its financial laws and regulation is to be watched out for. Since Bitcoin is yet unregulated and decentralized, government rules can vary from location to location as per regulation to be levied on this currency which would affect its trading and hence the exchange.
The time it takes for Bitcoins to be received by the user in that exchanges is also to be considered.
Mode of payment which the bitcoin is accepting is also major factor while selecting your bitcoin exchange.
Last but not the least, look out for the exchanges vulnerability for attacks. With security cliché, prices of the exchange can fall, affect trading.
Things to look out for while exchanging Bitcoins to fiat currency or vice versa:
Since the value of Bitcoin, depends on demand and supply, hence it is fluctuating. So one should make sure to research its value well before making the purchase.
How secure is your storage condition for your Bitcoins is the first questions to be answered. Currently, Ledger and Trezor are the most popular bitcoin wallets in the market.
Transaction cannot be canceled.
Risk assessment of the market.
Today’s market shows a lot of opportunities as far bitcoin trading, yet choosing the right bitcoin exchange is an essential factor before any sort of exchange. The unregulated nature of the currency has seen the rise of bitcoin exchange worldwide. However, a thorough assessment before making a purchase or selling decision is highly advised. Be it the process of bitcoin exchange or finding the right exchange for you, watch and take your steps!!