What To Consider When Choosing A Cryptocurrency Exchange

If you’re looking to purchase cryptocurrency, the first step is choosing the right online cryptocurrency exchange to trade with. But beware, not all exchanges are created equal!

Despite a rough couple of years for crypto, 2023 has seen its fortunes turn around. In fact, Bitcoin alone has gained 75% this year, with other cryptocurrencies also performing well.

So, could now be the perfect time to get into the market?

Choosing a cryptocurrency exchange in NZ

Before choosing a cryptocurrency exchange, you should know what kind of trading you’re interested in and ask yourself: What’s most important to me?

  • Ease-of-use
  • A wide selection of coins
  • Low fees
  • Platform authenticity and security
  • All of the above

Well, it all starts with a bit of research. Here are the top eight things to consider when choosing a cryptocurrency exchange.

8 Things To Consider When Choosing A Cryptocurrency Exchange. In this article we cover:

  1. User interface & ease-of-use
  2. Platform security
  3. Company authenticity & customer-support
  4. Fees & charges (especially the hidden ones!)
  5. Selection of coins
  6. Local or international exchange
  7. Spreads & liquidity
  8. Instant trading, verification & method of purchase

1. User interface & ease-of-use

Buying and selling crypto doesn’t need to be complicated. While having all the advanced trading features can be appealing to experienced traders doing high volume/futures/leverage trading, most crypto users are just after a simple way to buy and sell crypto that’s safe and easy-to-understand. If this is you, you may want to look for an exchange that:

  • Is designed for simplicity and emphasises a user-friendly experience
  • Offers a clean and no-nonsense display of your assets and the current markets
  • Provides a free, personal wallet (kept on the exchange) upon sign up
  • Offers educational guides on the basics of crypto
  • Offers useful features such as recurring buys/dollar-cost-averaging, price notifications
  • Has a desktop/mobile app that is easy to use
  • Isn’t convoluted with every advanced trading feature out there. This can make buying crypto WAY harder than it needs to be

2. Platform security

Platform security is paramount. If an exchange is insecure, you could potentially lose all your assets. If you want to avoid this happening, it may be best to prioritise exchanges that offer:

  • Two-factor verification (2FA) – especially for withdrawals
  • The vast majority of customer funds stored offline in cold storage
  • A web address that starts with https (NOT http)
  • A KYC (know your customer) policy, which ensures the integrity of the platform
  • Biometric face or fingerprint recognition, which greatly improves your account security
  • Sophisticated and regularly updated multi-layered security
  • Regular security reviews and criminal background checks of employees
  • If you have a large holding of crypto stored on an exchange, we recommend considering using a cold, hardware wallet for added security

3. Company authenticity & customer-support

While this is one that people too easily gloss over, the authenticity and transparency of the company and people who run the exchange are very important. If you’re new to crypto, there’s a good chance you may need to contact your exchange at some point, so it’s really worth looking into an exchange that:

  • Offers responsive and NZ- or Australia-based customer support
  • Is passionate about crypto education and getting newcomers crypto-savvy
  • Openly reveals its owners, company location and the members of its team
  • Has members who are personally involved with local crypto events and active in crypto forums and Facebook groups
  • Has an upfront and transparent fee schedule (be aware that most exchanges claim this even if it isn’t true)
  • Registered on the Financial Service Providers Register (FSPR)
  • A member of a dispute resolution scheme
  • Holds your NZD in a trust account

4. Fees & charges (especially the hidden ones!)

The fees that a exchange charges matter! And they vary wildly, with many exchanges stowing hidden fees away where they aren’t so easy to notice. Most exchanges charge fees for crypto trades, so it’s a good idea to  review and compare a few different exchanges to see which provides the most competitive fees.

Be vigilant! Some exchanges may advertise that they charge no fees, only to take their cut from hidden currency conversion fees, their spreads, or listing their coins at prices that are higher than other exchanges.

Looking for an exchange that locks-in your trades (also called guaranteed pricing) can guarantee that you get the price you see at the time of your transaction, even if the trade doesn’t settle immediately.

Make sure you can trade directly with NZD. While this is available on some exchanges, others require you to convert your NZD to BTC or USD before trading. They then charge a sneaky currency conversion fee they don’t tell you about when you sign up!

Where to buy Crypto in NZ

The display order does not reflect any ranking or rating by Canstar. The table does not include all providers in the market. 

Provider Fiat Currencies Bitcoin Other Currencies Est.
Easy Crypto NZD, AUD Yes 100+ 2018
Independent Reserve NZD, AUD, USA Yes 24 2013
Kiwi Coin NZD Yes No 2014
Swyftx NZD, AUD Yes 228 2017

This information is not an endorsement by Canstar of cryptocurrency or any specific provider. Canstar is providing factual information supplied by providers. Cryptocurrencies are speculative, complex and involve significant risks. Canstar is not providing a recommendation for your individual circumstances or in relation to any particular product or provider.

Learn more about cryptocurrency here

5. Selection of coins

As you know, Bitcoin is no longer the only crypto on the market. Coins like Ethereum, Litecoin and Ripple are becoming increasingly part of the mainstream vocabulary. And there are thousands of other altcoins to choose from.

While many altcoins are highly risky and volatile investments, the crypto market is booming with innovative new coins, some of which may do well in the future. If you want access to more than just Bitcoin and Ethereum, it may be worth looking at exchanges with a wide selection of coins.

6. Local or international exchange

Generally speaking, it’s better to choose an exchange from the country you are in. This makes things easier with:

  • Any legal and regulatory changes
  • Doing your crypto taxes at the end of the year
  • Having quality customer-support
  • Buying crypto direct with NZD

If you do want to use an international exchange for whatever reason, this is possible, too. Just be mindful of some of the drawbacks they can have if you’re living in NZ.

7. Spreads & liquidity

Have you taken spreads into account? Spreads are another way you can be charged fees that are not stated upfront, so get savvy about them before you sign up.

Basically, the spread is the difference between the quoted buy and sell price on an exchange. Having tighter spreads (a lower difference between the quoted prices) is beneficial in a number of ways, and will minimise your fees and losses when trading cryptocurrency.

Not only do spreads affect every trade you make, but they are often not stated upfront and may leave you confused and out of pocket.

Liquidity, on the other hand, makes it possible to complete transactions faster, more easily and without so much price volatility.

The higher the trading volume, the more liquid an exchange or any individual asset. It’s probably a good idea to prioritise exchanges that offer ‘locked-in trades’ or ‘guaranteed pricing’. Depending on the type of trading you’re looking to do, liquidity can be an important factor.

8. Instant trading, verification & method of purchase

Having access to instant withdrawals and deposits is desirable for most traders. Additionally, the method of purchasing cryptocurrency can vary between platforms. Some exchanges offer deposits by bank transfer, PayPal, POLi, or credit and debit cards. Choose an exchange that offers free, instant NZ deposits.

However, it’s also worth noting that there are some exchanges out there that only accept other cryptocurrencies or USD – you will likely pay an extra conversion fee if you are trading/depositing NZD.

It usually helps to choose an exchange with fast/instant account verification, especially if you’re eager to get trading. You’ll usually need to provide an official ID document and do a biometric face check for instant verification to be possible.

Weighing it all up

After doing your research it’s time to weigh up your options and decide what’s most important for you. Remember, don’t be afraid to contact exchanges’ customer-support, seek out user testimonials, or sign up and try out a few exchanges before committing to one.

Choosing the right exchange can make a big difference to your crypto experience, and it’s worth shopping around before you dive right in.

About the author of this page

This report was written by Canstar Content Producer, Caitlin Bingham. Caitlin is an experienced writer whose passion for creativity led her to study communication and journalism. She began her career freelancing as a content writer, before joining the Canstar team.

Enjoy reading this article?

Sign up to receive more news like this straight to your inbox.

By subscribing you agree to the Canstar Privacy Policy

Share this article