What's a Crypto Exchange? Plus How to Get a Welcome Bonus

Although some major coins - including Bitcoin and Ethereum - are still in the midst of a bear market, buying cryptocurrency can help you safeguard your assets from inflation and give you access to potentially substantial capital gains.

But how can you effectively and safely trade cryptocurrencies? That’s where crypto exchanges come in.

In this guide, you’ll learn all you need to know about what crypto exchanges are and how to choose the best one for your needs.

What Are Crypto Exchanges?

Whether you are looking to make more crypto online or keep your digital assets safe, crypto exchanges should be your first port of call. So, let’s start by getting an understanding of what crypto exchanges are and how they work.

Cryptocurrency exchanges - also known as digital currency exchanges (DCEs) - are centralized or decentralized platforms that allow users to safely buy, sell, and trade crypto coins. Crypto exchanges also give you the chance to stake coins or earn rewards by holding certain cryptocurrencies.

Modern crypto exchanges aren’t much different from standard training platforms, but with a focus on digital assets such as NFTs and crypto coins. On these platforms, you’ll be able to trade or exchange major cryptocurrencies such as Bitcoin or Ethereum, but you can also bet on the growth of smaller or minor digital currencies such as Axie Infinity and KuCoin Token.

Just like in the case of other types of asset trading, exchanging cryptocurrencies has its risks. So, you should always partner with a financial advisor before investing your savings in such a volatile asset as crypto can be.

How Do Crypto Exchanges Work?

Crypto exchanges are the most popular ways of transacting in cryptocurrency. These platforms are created to be incredibly user-friendly, and they allow investors to create a secure profile, and purchase coins by depositing funds, and trading their coins.

Since they act as intermediaries in charge of protecting and facilitating transactions, cryptocurrency exchange platforms often earn commissions or fees for each transaction.

The Benefits of Signing Up for a Crypto Exchange

Although you could trade your digital coins without the need to hire an intermediary, there is more than one benefit of using cryptocurrency exchanges that should not be underestimated.

Some of the advantages worth keeping in mind include:

• Facilitating safer transactions
• Reducing the risk of fraud and scams
• Making transactions faster and more efficient
• Providing access to a wide range of major and growing cryptocurrency
• Providing users with reliable market resources and updates
• Giving users the chance to buy and sell crypto anonymously and without needing to hire a broker.

When choosing a cryptocurrency exchange platform to use, be sure to understand the difference between centralized and decentralized crypto exchanges, along with the benefits and drawbacks that each option offers.

Pro Tip: Choosing a Reputable Exchange That Offers a Welcome Bonus, e.g. KuCoin

If you are looking to test out a crypto exchange but you are not ready to make a financial commitment, you should look out for reputable crypto trading platforms that provide new users with welcome bonuses and promotions.

For example, you can find valid KuCoin codes and referral programs on Binance that allow you to obtain a cash amount to invest. Although not all welcome bonuses are as large or convenient, they allow you to try out a platform and complete transactions without having to invest your own capital.

How To Find a Trustworthy Cryptocurrency Exchange

Before making a financial commitment to a certain platform or coin, take time to carry out your due diligence and make sure that the platform you have chosen meets the highest standards in terms of safety and user privacy.

Some boxes that a reputable platform should tick include user protection features, a bulletproof privacy policy, and plenty of positive reviews from current and past users. And, don’t forget to look out for the safety of your own account by changing your passwords regularly and enabling the 2-factor authentication feature!