Choosing The Best Cryptocurrency Exchange in India     

May 18, 2022 Fortuna Capital

Cryptocurrency exchanges generally allow traders to buy, sell, and trade digital currencies. They are the most appropriate sites for this type of financial transaction. 

When investing in cryptos, choosing the best cryptocurrency exchange in India is essential. Since there are more than a few of them, you must be very careful and take your time to choose. 

How to choose the best cryptocurrency exchange?

There are several necessary elements that the crypto investor needs to consider when choosing the best cryptocurrency exchange in India. They are mainly: the security it offers, its liquidity and history, the fees, the markets where it operates and the user experience. At every point, you need to decide on the features, fees and security aspects of an exchange before you can identify the best platform for crypto trading in India for your needs

Another critical point is distinguishing between exchanges that operate only with cryptocurrencies and those that allow crypto to be exchanged for fiat money. Crypto to crypto-only includes cryptocurrency pairs. In comparison, fiat-crypto is ideal for buying or selling digital assets and currencies (Indian rupee, euro, dollars and others).

Once you have established these essential criteria, you can move on to a second phase. To do this, review the following aspects of the exchange in detail:

Security

It is the determining factor when choosing the best cryptocurrency exchange in India. You do not want to leave your money in the hands of an insecure platform with a questionable reputation. Otherwise, you risk losing your funds through fraud, theft, or other cause. The best platform for crypto trading in India will require to have extremely resilient technology and hacker-proof security.

Security criteria include:

• Technology. Note that the exchange web address starts with HTTPS instead of just HTTP because they are insecure sites.

In addition, it meets the following standards:

o Login using a two-step authentication method. That is username – password and something you own (phone/laptop).

o “Cold storage” (offline) of warehouses.

o Exchange permanent audit programs (24 hours a day, 7 days a week). Send login and transaction alerts via SMS and email for added security.

o Whitelist the IP address of the account owner or withdrawal wallet addresses for additional security.

o Exchanges are notorious for getting hacked; even Binance – the world’s largest exchange, was hacked. Beyond security, you might want to see if the exchange has insurance against theft/loss of cryptocurrencies.

• The legal address of the exchange. Offshore crypto platforms can be a problem. So it is better to operate -preferably- in an exchange governed by India’s laws. That will facilitate any claim and force the platform to comply with the established rules.

Note. It does not mean that you cannot operate on exchanges domiciled in other countries that offer high levels of security. Exchanges usually indicate the countries they support in their operations.

• Transparency. Most exchanges with high levels of transparency usually publish their cold storage address or through regular third-party audits. In any case, cryptocurrency experts in India advise not to leave funds deposited in a crypto platform (exchange, wallet, etc.) longer than necessary. Keep only the funds necessary to operate on the exchange.

Liquidity

An exchange with a high trading volume has higher levels of liquidity. This is a critical factor because the more liquid the exchange and the cryptos it trades, trades become cheaper and faster to trade on and reduce the price volatility by offering lower spreads. Those exchanges with “fixed” prices of cryptocurrencies offer the crypto trader the guarantee of not changing the transaction price. One thing to remember is that liquidity varies across different trading pairs.

Rates

It is imperative to compare the service fees that crypto exchanges charge. They are generally 1% or less per trade and sometimes decrease as trading volume increases.

Another thing you should not forget is to check the withdrawal and deposit fees. Some exchanges set very high withdrawal fees for certain altcoins.

Likewise, some platforms offer the facility to buy digital assets with transfers and credit or debit cards. The problem arises when paying, as deposit fees can be 5% or more.

User experience

The ease of use of the exchange is no less critical, especially for those novice crypto investors. A versatile user interface (for mobiles and PCs), friendly, simple and easy to use, is always better valued.

Those who prefer to remain anonymous will probably not want to choose a cryptocurrency exchange in India that requires a lot of user identity data. Neither is a platform that does not offer 24/7 customer service with support and virtual assistance.

Reputation

Last but not least is the history of the exchange. Investors should not choose one with problems with its users or that the government authorities are looking to stop/control. 

All the popular exchanges and their pros and cons

Cryptocurrency exchanges are divided into three types or classes: centralized (CEX), decentralized (DEX), and hybrid. Each one has its pros and cons.

CEX Exchanges

Centrally controlled exchanges serve as intermediaries between buyers and sellers. They are more reliable trading platforms when owned and managed by a company.

Centralized markets on the blockchain network offer the following advantages:

• Comfort. The beginner trader will find a more familiar and functional environment for trading cryptocurrencies. They are more accessible platforms to use.
• Reliability. Centralized or consolidated networks are more reliable and offer greater service capacity.
• More liquidity. They manage higher cryptocurrency trading volumes.
• Regulation. It is a market regulated by local laws. It can be closed if it breaks the rules or the laws change.

But they also have their disadvantages:

• Risk of being hacked. By maintaining higher deposit levels, cryptocurrency platforms with established systems are more susceptible to hacking attacks and other types of theft.
• Transaction Fees. Their service fees are often very high, unlike transactions on decentralized exchanges. Mainly when trading very high volumes of cryptocurrencies.
• Some of the best platforms for crypto trading in India are CEX’s because we are the initial stages of cryptocurrency usage and users need some handholding before they can jump onto a decentralized exchange

DEX Exchanges

Decentralized or distributed exchanges instead have the following advantages:

• They reduce the risk of theft and hacking. Customers are protected against criminal practices such as ransomware through theft:

• Trades are settled on the blockchain.
• Cryptocurrencies remain in the hands of their owners.
• They prevent market abuses. They protect traders from fraud and the laundering trade so common in NFTs, as they allow trading in friendly cryptocurrencies.
• Confidentiality. Decentralized exchange platforms do not require customers to fill out KYC requests. Thus the trader can preserve his anonymity or privacy.

The disadvantages of decentralized cryptocurrency platforms are several:

• Risk of loss of funds. DEX users risk losing everything if they forget their passwords. They do not have an answering service, as with the CEX. There is no way to get your funds back if you lose your user credentials.
• They lack fiat payments. These markets are for crypto trading only. It is impossible to exchange digital money for fiat (traditional) money. This prevents users who are just starting and do not own digital assets from trading.
• They handle fewer transaction volumes. Therefore they are less liquid.
• Limited functionality.

Hybrid Exchanges

They are a combination of the previous two. They use smart contracts to guarantee the client the independence of the business without a central figure to govern it. Its disadvantage is that the client’s funds are placed on a blockchain, reducing security risks. So there is no one to claim for any problem that arises along the way.

Other exchange platforms

Brokers and centralized trading platforms operate as legal firms and are regulated by the country’s laws. 

So when choosing the best cryptocurrency exchange in India, you should also consider whether or not it complies with local regulations (or is legal) 

What is the best cryptocurrency exchange in India?

The best cryptocurrency exchange in India will be the one that best suits your needs as an investor/trader. If you are starting to operate in the cryptocurrency market, it is convenient to get excellent advice from an expert on which of all these is the best for you. 

As you can see, exchanges operate differently. Consequently, weighing its pros and cons before investing in crypto is essential. They all have varying degrees of ease of use. They also offer different levels of security, performance, and user experience. No one platform can be called the best platform for crypto trading in India because of the feature list, liquidity and security – are all variable factors

Go to the link below to know which is the best cryptocurrency platform in India for beginners. There you will be able to choose the best cryptocurrency exchange for you to start trading safely and more profitably. Conclusion: When deciding on an exchange, you need to consider various factors such as ease of use, security, fee structure, insurance, trading volume, and others mentioned above.