New Zealand Crypto Exchanges: what features to look out for

Posted: 23 September 2021 1:00 pm

Choosing an exchange can be overwhelming – let us help you by explaining the key features to look out for.

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The influx of money flooding into cryptocurrency markets has led to an abundance of options for those looking to invest. There are now more crypto exchanges than ever. So here’s a hit-list of features to help you choose the exchange that best suits your needs.

In this article, we’ll take you through some of those crucial deal-breakers that should help you sort through the plethora of options available.

1. Wide range of assets

There are now more than 10,000 coins and tokens that compose the cryptocurrency market.

While this number includes coins that are not suitable for investments, the range is still vast. So, one of the first things to consider when selecting a cryptocurrency exchange is the range of digital assets on offer.

Sometimes due to regulations, or due to a more targeted approach, certain exchanges limit the number of cryptocurrencies listed. This is not necessarily a bad thing. The top 10 largest market cryptocurrencies by market value, such as Bitcoin and Ethereum, may be enough for those new to the industry. It would certainly remove some of the risks involved with lesser-known altcoins.

However, some exchanges, such as Swyftx, offer access to hundreds of assets in one place. With over 280 cryptocurrencies to choose from, a wider selection of assets means that an investor can take advantage of a wider range of market movements.

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Alongside the ability to purchase cryptocurrencies, remember to look at what options there are for exchanging one cryptocurrency for another, often referred to as cryptocurrency pairs. This allows you to trade certain cryptocurrencies with each other, rather than just NZD.

2. NZD deposit and withdrawal

For New Zealand residents, one of the most important factors when choosing a crypto exchange is the ability to deposit and withdraw New Zealand Dollars (NZD). This option is not always available, so make sure to check on what fiat currencies are supported before signing up for an account. Look for exchanges, such as Swyftx, that offer bank transfers for deposits and withdrawals in NZD.

Alongside NZD, are there any other fiat currencies that you need access to? Some of the best exchanges offer the ability to access both your home fiat currency and also other major global currencies such as US dollars, which are typically used to value crypto-assets.

3. Fees

When checking the availability of NZD, remember to check the associated fees for depositing and withdrawing funds. Fees can vary considerably between exchanges and can often be a deciding factor when choosing between multiple options.

It may be useful to ask yourself, how often you will be using an exchange?

If you plan to invest for the long term and buy digital assets intermittently and infrequently, fees may not be too much of a pressing issue when compared to your overall investment. However, if you are planning on transacting frequently, and taking a more active approach to cryptocurrency trading, fees can soon start to build up. Any fees incurred can quickly eat into investment or trading profits.

Watch out for exchanges that charge a deposit fee in addition to trading fees. Some exchanges charge flat fees, while others take a percentage of each transaction.

4. Security

Cryptocurrencies are digital assets, and like anything digital, they can be exploited. This is why cryptocurrency exchanges often make security the number one priority.

Become comfortable with what security measures an exchange implements. Look for features such as two-factor authentication, which involves an additional way of proving your identity in addition to just your email address and password.

Other things you may want to look out for include:

  • Biometric logins such as TouchID or FaceID.
  • Cold storage (where an exchange stores the bulk of cryptocurrency offline). This prevents funds from being stolen even if the exchange gets hacked.
  • Security practices being a prominent part of the exchanges marketing.
  • The ability to whitelist withdrawal addresses.
  • Registration with local financial authorities.

The more security protocols an exchange implements the safer your cryptocurrency holdings are likely to be.

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5. Live chat and phone support

Excellent customer service is a must for any cryptocurrency exchange. This is a new investment world for many, which means the majority of users have plenty of questions. A varied list of contact options and quick response times are extremely useful, especially if you are a beginner.

Look for live chat and phone support options such as those offered at Swyftx. The exchange offers both online and local customer support. The localised support based in both Australia and New Zealand, which means that they can respond during New Zealand working hours. Assistance is granted almost 24/7 and there are no ‘bot-like’ systems involved.

Try and make sure you find an exchange where you are dealing with real people. While email is also useful to have, the response times will be slightly slower.

6. Demo Account

The saying goes that ‘practice makes perfect’, and that is particularly true when it comes to cryptocurrency trading. While not always suitable for beginners, trading can create additional profits beyond just watching your investment grow over time. However, the potential for extra profits comes with increased risk.

As a result of the increased financial risk, demo accounts can be extremely useful. A demo account provides a safe environment to learn the cryptocurrency markets and the processes involved with trading. Liquidity, market depth and prices can all be simulated and traded against artificial funds.

Closing thoughts

Choosing a cryptocurrency exchange is no longer a simple task. The improvements in infrastructure now mean access is abundant, however, the number of options available can leave your head spinning. The right decision usually requires a little homework.

Investments are made with hard-earned money so focus on security first. Find an exchange that will look after your funds. Then research the cryptocurrencies and fiat currencies that are supported. Make sure you can access the cryptocurrencies you want to invest in. If the fees are reasonable, finally look at the internal features offered. Can you store cryptocurrencies on the exchange? Is there a demo account available? What is the platform’s customer support like?

Pay attention to the above features, stay informed and set yourself up well for the start of your cryptocurrency investment journey.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Disclosure: The author owns a range cryptocurrencies at the time of writing

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