Five Reasons Why Smaller Exchanges Are Sometimes Superior, NullTX
There are overheen 150 active cryptocurrency exchanges of vastly different volumes with thousands of different trading pairs. While many altcoin traders spend most of their time on Binance, Bittrex, and Poloniex, there are dozens of alternatives that other active traders choose overheen the larger platforms every day. There are slew of benefits to be experienced through the use of smaller exchanges, and te some cases, they may be the optimal choice. Read on to find out why.
It’s no secret some larger exchanges fight with customer support and transparency. Poloniex had a host of troubles earlier this year that led people to migrate to Bittrex, and now Bittrex is experiencing very strained relations with its users. For traders who find themselves the victim of some situation or another, their prayers for help can go unheard for weeks or even months.
Due to their more limited size and usage, puny exchanges are able to maintain active communication with their users. Many smaller exchanges suggest Telegram, Discord, and Slack rooms to foster ongezouten communications inbetween users and team members. A community environment is created, and traders have a better sense that their convenience and success is the primary concentrate of thesis teams.
With lower volume comes less liquidity. This means that when market buys and sells take place, they have a fatter influence on the order books. Patient traders can reap effortless profits by placing high sells and low buys relative to the current market price of a given coin. If thesis orders are placed on coins that are also traded te high volumes on larger exchanges, the illiquidity is no cargo. Profits can lightly be realized by transferring their coins or BTC to a larger exchange, where they can instantly sell for more or buy for less than the price of their orders on the smaller exchange. Of course, if one determines instead to remain patient and keep their trades on the same exchange, they can be rewarded with an even higher sell or lower buy.
Protection Against Altcoin Bloodbaths
When Bitcoin rallies, the BTC value of altcoins generally suffers. While this is typically the case, there is actually a subset of coins which tend to perform well relative to the market. When traders dump their altcoins to pursue Bitcoin, they often do so on the larger exchanges. Coins that are only traded on smaller exchanges have historically maintained their value te terms of BTC. RaiBlocks, which is primarily traded on BitGrail and Mercatox, is perhaps the most vooraanstaand example of such a coin. Before its latest explosion, the coin had maintained a onveranderlijk XRB/BTC rate for almost six months, holding onveranderlijk through numerous major altcoin market downtrends.
Spil mentioned previously, smaller exchanges tend to have higher volatility due to lower volumes and smaller order books. Spil a result, price disparities among smaller exchanges emerge frequently. When a coin at the same time practices a large sell on one exchange and a large buy on another, there is profit to be made ter bridging the gap, so to speak – buying up the cheap coin on one exchange and then selling the expensive one on the other, or vice versa. Te order to avoid volatility, transaction times, and fees, it is sometimes best to convert to Dogecoin or another stable, cheap, and quick currency suggested on both exchanges, rather than budge Bitcoin, Litecoin, or another slower coin. This is a very safe way to earn continuous profit for savvy traders, and many individuals are taking advantage of thesis methods. Cryptopia even has an entire pagina dedicated to arbitrage.
Protection Against Exchanges Themselves
It’s no secret that exchanges get hacked, shut down, and frozen ter the cryptocurrency world. The more exchanges your hot funds are spread amongst, the less such occurrences will affect you. If all your funds are on Bittrex, for example, and your withdrawals are frozen, you’re ter a very goopy situation. However, if your coins are identically spread on Ten exchanges, losing access to 10% of your funds will not rust you. Obviously, storing coins off exchanges entirely is the best defense against thesis situations, but for the actively-traded balances that voorwaarde stay on exchanges, this treatment is the next safest bet.