Cryptocurrencies have been a hot topic for more than a decade now. While Bitcoin gained popularity in the global market, other crypto tokens also entered. Today, more than 14k+ cryptocurrencies are being traded daily. The total market volume of these cryptos has increased to more than $3 trillion per day. Visit Quantum AI Trading App to get the best trading calls and much better use of artificial intelligence than other trading software.
Along with cryptocurrency, its allied service also grew. Once such popular service is the cryptocurrency exchange.
Understanding cryptocurrency exchange
A cryptocurrency exchange works like a stock exchange. It is an online platform enabling users to buy, sell, and trade crypto tokens. As of 2020, the crypto exchange market volume has increased by more than 300%. These exchanges combined to create a market volume of more than 500 billion. These crypto exchanges have also helped to increase the average trading volume of cryptos.
This trading increase also demands finding a reliable and scalable crypto exchange. Yet another reason for this demand is the increase in the number of scams around cryptos. While there are legitimate tokens, investors are often subjected to fraudulent activities. Alternatively, crypto exchanges have also been voicing their concerns about various regulations. The lengthy license process and lack of IT infra handicaps crypto exchanges.
Before deep diving, let us understand the key factors in selecting an exchange.
Privacy in transactions
This is one of the primary attributes of crypto exchange. The crypto exchange that you wish to choose needs to provide you with the privacy of your transaction. Read through the privacy statement to understand the handling of personal details. Also, look forward to gaining a better understanding of transaction privacy.
Crypto token listing
This is another key factor that will drive your selection. Ensure that the crypto exchange you choose to trade has diverse tokens. Yes, there are various popular tokens like Bitcoin, Ethereum, etc. in the global market. But you may not be considering trading only these tokens. Hence, if your exchange can offer diversity then better negotiation and trading.
Transaction and exchange fees
This is another factor driving crypto exchange selection. You need to ensure that you thoroughly understand the volume of transaction channels. Yes, this is indeed dependent on various factors. Hence, choosing an exchange with a higher transaction fee will make it difficult to withdraw.
FTX exchange – Understanding its evolution
FTX was ranked as the world’s leading and fastest-growing exchange. Globally, it took the third rank in being an affordable and trusted exchange. The exchange offered its users a varied range of products. Any registered user could undertake easier buying, selling, and trading of sanctions. FTX exchange was available as both a desktop and application-based tool. Other than native tokens, FTX also enabled easy buying of paired tokens. The exchange had listed more than 300+ pairs of crypto tokens on its platform.
The basics of FTX exchange were simple and easy to understand. It provided an easier platform to trade for both novice and experienced traders. Additionally, the trading platform also supported more than nine traditional currencies. It allowed users to complete their transactions much easier as compared to other platforms.
Despite these advantages and growing success, the FTX platform was declared insolvent in 2022. Bank man Fried, founder, and CEO of FTX stepped down from his role. Currently, a filing petition has been made to protect the exchange from further penalties. Many investment experts agree that the collapse was an expected one. The senior management had disparities in its way of operations causing an impact downwards.
Many investors have lost a huge lot of money through the collapse of FTX. It is also estimated that FTX would have used investor money on an alternate project. However, the only good news here is that fall of exchange will not have a huge impact on cross-border sanctions.
The crumbling of the FTX exchange has removed a major source of liquid funds. Also, many investors have voluntarily removed their funds. The fall of the FTX exchange has created a huge blow to retail investors. Many individual investors are likely to suffer bigger losses than the reports. However, investors who are involved in cross-border transactions are not impacted. The exchange will continue to enable such transactions. The country is also working on regulations to help further reduction of losses.