Recently I've seen several articles on "how to choose a crypto-exchange". It looks like a hot topic right now, and I decided to add my two sats to the pile.
First, I must note I will not talk about DEXes, because currently, they're good for anything but trading. More precisely, DEXes are good to swap tokens back and forth more or less quickly and securely -- if you don't care about fees and slippage. Myself, I normally don't swap tokens on DEXes.
Second, I must note that things go differently when you have a $100 depo and when you have a $100K one. An exchange can be Ok to trade $100 but not that good to trade $100K and vice versa.
When it goes about choosing a CEX, I would point to the following factors to consider, in the order of importance:
Reliability is a complex thing, and its most important part is security. "Security" here means that you don't lose your pennies because of a hacker or a scam exit. Security has quite a little to do with the length of your password and other tin foil paranoia bullshit. The security I'm talking about is the security of exchange itself: how good it guards itself against hacking attempts and whether it has any plans to scam its clients. As far as I know, today no crypto-exchange has third-party insurance for its clients' funds. In other words, if an exchange goes bust for any reason, pretty much the only thing their clients can do is to pray that the owners will implement some kind of "compensation plan". Unfortunately, for an outside observer, it's hard to say how secure an exchange really is. It's somehow reasonable to believe that big exchanges are more secure simply because they have more money to hire qualified coders and security specialists, but practically it's not always the case.
Another important part of reliability is what I'd call connectivity. CEXes are pretty much "internet-only" creatures, you can't make trades, withdraw funds, etc. by phone or fax or something. (unless you have a crypto-broker, who takes your phone orders and deals with "internet-only" CEXes on your behalf). It's hard to trade on a CEX that goes 404 or 500 every other day, takes ages to load and update price feeds, fails to place or cancel your order, etc. Some go so far as to fail to execute an already placed order... Poor "connectivity" is not only annoying but also can result in substantial losses.
By diversity I mean how many coins and trading pairs an exchange has. Diversity may be unimportant if you trade a few pairs only, e.g. BTC/USD and ETH/USD only. I trade quite a few shitcoins and I'd love to do it in one place because moving funds from one CEX to another is rather costly, exhausting, and insecure. Of course, no CEX lists all the coins, but some list quite more than others.
Fees and Liquidity
Exchanges charge fees for every trade, no matter what. They also charge withdrawal fees. As far as I can remember, once I was charged deposit fees at some shitty CEX! However, in some cases, it's possible to get negative "maker's" fees, but it's not that common. Generally speaking, it's always better to pay less, but actually, the impact of fees depends on the trading style. Fees are relatively unimportant (at least, as long as they're reasonable overall) if you trade like once a year and wait for a 10x profit. On the other hand, even moderate fees can kill a daytrader who makes dozens of low-profit trades. Liquidity issues can be counted as an additional "cost" or "fee" because poor local liquidity results in low trading volumes and wide spreads, which both lead to slippage and losses.
Coders love to rebuild UI because it's easy to rebuild it and the result is immediately visible. I remember how Microsoft jerked their Windows "Start" button for years causing shitstorms from every direction. Actually, UI must be comfortable to work with, and preferably if it's configurable so that everybody could build the look and layout he likes.
Many CEXes offer additional features like futures, savings, staking, mobile apps, lotteries, you name it. It may or may not be important, depending on what exactly you intend to do. I'd say that it's normally good to have them, but it's also possible to go without.
"So what CEX do you recommend?", you might ask. Well, none, actually. I can't estimate how reliable this or that CEX is. And for the rest, CEX is a derivative of trading style. In other words, first you decide what you want to do and then you choose a CEX that fits it best. A CEX that is good for BTC hodlers may be completely inappropriate for BTC futures traders, and so on. By the way, there's no such thing as "the best CEX for the noobs" -- those who don't know what they do will never get any good result no matter where they do it. Noobs should cease being noobs as soon as they can, in the first place. However, as a starting point, I'd suggest Binance, one of the most developed crypto-exchanges today.
Another point I think worth mentioning is that an exchange is not your friend, no matter how many Twitter contests, promo coupons, trading competitions, lotteries, and other bullshit it does. Indeed, exchanges are happy to keep its current clients satisfied and to attract new clients -- but exchanges are here to make money for themselves first. I don't mean that an exchange is your enemy (at least, as long as it doesn't share its sensitive insider data with its "trading partners"). Name it "a necessary evil", "a handy tool to make things done", whatever, but "a friend".
Personally, at the moment I use two exchanges, Binance (global) and Hotbit. Binance is pretty big, pretty reliable, diversified, liquid, has reasonable fees, a good interface, and quite a lot of cool features. Definitely, Mr. CZ knows how to run a crypto-exchange. However, I suspect Binance prefers some "trading partners" at the expense of others. Hotbit is worse in all ways except coin listings: on Hotbit I have cheap fresh coins that are not listed on Binance yet. I have accounts at maybe a dozen other exchanges too, but Binance and Hotbit are what I use on daily basis.
That's all for now folks. Mr. Musk just bought shitloads of BTC, so I'm busy.
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