Cryptocurrencies are purchased on exchange platforms, which are third party websites where various types of cryptos are bought, sold, and traded. These websites show the current exchange rate of any cryptocurrency available on that particular platform, letting buyers know how it will cost to buy or trade any crypto.
For first-time buyers and those just getting into buying cryptos, it’s easy to feel overwhelmed by all these exchange rates. Countless numbers are constantly increasing and decreasing in value while various types of cryptos are on display, making it quite difficult to keep up with if you’re unfamiliar with the exchange rates of cryptocurrencies.
Yet the exchange rate is one of the most vital pieces of information for anyone buying, selling, and trading cryptocurrencies, so you should always keep a close eye on them to get the most of your cryptocurrencies.
A Volatile Market
Most people that have never bought a cryptocurrency in their life have heard about how volatile the rates are. Bitcoin is the most well-known crypto and it has gone through some crazy fluctuations in value, such as late 2017 when it passed $10,000 before dramatically decreasing a few weeks later, highlighting just how volatile the cryptocurrency market is.
While bitcoin and other prominent cryptos always stabilise in value, their and all other crypto exhange rates fluctuate in value so often that you must keep monitoring them. Exhange rates can skyrocket one day only to fall back down shortly after, so by frequently checking the exhange rates you get a better idea of the best times to buy, sell, and trade.
Varying Rates on Exchange Platforms
Cryptocurrency exhange rates differ on every exhange platform. For example, larger exchanges such as Coinbase see a huge volume of trading compared to a smaller exhange, which therefore causes the values on each platform to differ.
When combined with the fact that there is no set method for pricing a cryptocurrency, exhange platforms end up having varying rates -their prices are based entire on trading, which differs on each site.
It is therefore impossible to know where to get the best value for money without checking exhange rates on different platforms using a web site like coinchefs.com.
Fees and Charges
Like the exhange rates being different on each trading platform, the fees and charges for trading on each site also differs. This means you may end up being charged more to trade bitcoin on one exhange platform compared to another, which alters the total amount of the transaction.
Therefore, you may find a great priced crypto only to find the value isn’t as good because you’ll be charged a higher processing fee compared to another site. So, it’s important to monitor the exhange rates to determine how much – or how little – you are saving by using each exhange platform
Exhange rates aren’t just a handy tool for predicting current market prices but predicting ones for the future. With the popularity of cryptocurrencies only growing more currencies are being created each day.
While most of these will never reach lofty heights of Bitcoin or Ethereum, there are some that will significantly increase in value. These currencies are hard to predict early, but by monitoring exchange rates you can remain ahead of the curve and discover emerging currencies worth investing in.
This could lead to buying a newer crypto that provides a massive return on investment, so it’s always worth checking exhange rates to see what might be the next big crypto.