What a turnaround Bitcoin has had in recent months. From speculation that the price would continue to drop into oblivion it has changed its fortunes and now looks set to have a terrific 2019. This resurgence has led to many cryptocurrency investors looking to buy Bitcoin again and there have been mass scrambles to get the currency while it rises rapidly. Want our advice? Make sure you’re buying your Bitcoin from the best exchange in order to maximize profitability and security. The Singapore bitcoin guide written by Dr Wealth can help.
Here are some more things to consider when buying your Bitcoin!
Compare Price Charts
Comparing price charts is an easy way to determine whether you’re getting the best value for money when buying Bitcoin.
You want to look at exchanges that publish price charts in real time and then make a shortlist of exchanges with the best prices.
Compare Exchange Fees
Exchanges are businesses; they have a profit margin and it means they charge fees. There are three things to consider when comparing fees so pay close attention to them.
Low Fees Might Seem Great but They Have Pitfalls
Be wary of exchanges that have very low fees, especially in comparison to the rest of the cryptocurrency exchanges. Low fees are very attractive to investors because this increases their profit margins. But, low-fee exchanges tend to suffer with the same problem. Simply put, it costs money to run an exchange and it costs even more money to keep the exchange secure and user funds safe.
Low-fee exchanges tend to attract a large volume of investors to generate their profit margin. Beyond that, they tend not to put much money back into the exchange’s security protocols because with less profit there is less scope to be able to afford to.
High-Fee Exchanges Should Also be Avoided
High-fee exchanges tend to be smaller communities that don’t attract much in the way of users because of the high cost associated with transacting on them. For financial reasons, you should try and steer clear of high-fee exchanges as they tend to be less profitable for investors. These exchanges rely on users that aren’t very savvy. People come across them and then invest without checking out the competition first.
Medium-Fee Exchanges Tend to Be Most Reputable
Have you noticed that the most successful exchanges aren’t the cheapest exchanges? That is because the most successful exchanges have been around for a long time and know to charge users a fair price while reinvesting profits back into the exchange. This would ultimately save them from being hacked or being shut down for failing to comply with regulatory guidelines. All of the most reputable exchanges sit very middle-of-the-road in terms of fees. Let’s take a look at one of them as an example.
CEX.IO is a London-based exchange that has been active in the market since 2013. Although it is usually regarded as an exchange with the above-average fees, CEX.IO is still a go-to option for many users and enjoys a base of around 3 million active traders. The selling point of this platform is that it offers various fee plans – for occasional buyers and for regular traders. Thus, if you are looking to buy Bitcoin instantly with a credit card, you will be charged a 7% fee from the total fiat amount you spend. On the other hand, if you aim at trading cryptocurrency on a daily basis, you will be subject to the taker-maker fees. The fee range for trading is 0-0.25%. Mind, however, that this fee schedule applies to your 30-day trade volume.
Ease of Transacting
Your next consideration when buying Bitcoin is how easy it is to transact and actually buy that Bitcoin. Most exchanges will accept credit cards; some will support PayPal; and a few of them will allow you to use debit cards.
You know where your funds are and how you want to buy your Bitcoin, so make sure you have chosen an exchange that works for you. Using a credit card might seem easy, but then you will likely have an interest rate attached to that card (which will erode your profit margin). You might likewise have funds in your bank account without needing to pay huge commissions to buy your Bitcoin.
Although Bitcoin is a coin of the moment, there will be a time when you want to sell your Bitcoin. This might be a direct transaction back to your local currency, or it may be that you have spotted a cryptocurrency or stock opportunity elsewhere, so you wish to trade your Bitcoin for it.
If the latter is the case, you will definitely want to consider a multi-asset trading platform. We have mentioned CEX.IO above on purpose. It has recently added support to CFD trading via its new CEX.IO Broker platform. So, if you are a CEX.IO user and want to try out new Bitcoin opportunities, the platform will be just the thing.
Check Your Tax Obligations
Many reputable exchanges have guidance on staying in line with local tax regulations so make sure you have read the legal information that the exchange provides you. Bitcoin is very much in the public eye at the moment, and this means that tax authorities are paying particular attention to those making money from crypto investment and trading. Ensure you’re trading in a legal and tax-safe manner and follow the exchange guidelines.
Exchanges get targeted by hackers ALL THE TIME. Sometimes these hacks are successful and investors are robbed of their hard-earned money. Exchanges that have suffered repeated breaches should be avoided at all costs as they’re likely not investing in rigid enough security measures.
Transact on exchanges that are known for being safe, and make sure you read about the security policies on the exchanges you’re comparing. Finding an exchange that has never been breached and actively posts about the security updates they’re doing is priceless in the world of cryptocurrency.
An Additional ‘Stay Safe’ Procedure
Even if you are sure that the exchange you have chosen is robust against hacking, don’t be reckless and leave your funds in the exchange wallet. While reputable exchanges are extremely security-conscious, they aren’t infallible. All computer systems that are linked to the internet will have some weakness. So, to make doubly sure your investment is safe, remove your Bitcoin to your personal wallet.
Selecting an exchange with strict security measures and then being precautious about how you protect your investment will contribute to your security and result in a very happy and profitable trading experience without the worry that someone is going to steal your Bitcoin.
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