Exchanges & Buying Safely
7 key takeaways
- Centralised exchanges (CEX) hold your coins; decentralised exchanges (DEX) don't.
- KYC (ID verification) is standard on regulated exchanges and protects you from frozen funds later.
- "Simple buy" buttons hide a 1–2% spread; the trading screen charges 0.1–0.6%.
- Limit orders avoid overpaying in volatile markets.
- Withdraw long-term holdings to self-custody; exchanges fail (FTX, Mt. Gox).
- Enable 2FA with an app, never SMS; add a withdrawal whitelist.
- Dollar-cost averaging beats trying to time the bottom for most people.
Choosing an exchange
Weigh regulation in your country, fees, assets, and track record. Our Top 7 Exchanges shows a seven-metric score for each. Beginners: Coinbase (US) or Binance (elsewhere). Security-focused: Kraken. Derivatives: Bybit.
Your first purchase, step by step
Create account → verify ID → enable app-based 2FA → deposit via bank transfer (cheaper than card) → open the trading view, not the simple buy → place a limit order for BTC or ETH → confirm the fee shown. Expect a 0.1–0.6% fee instead of the 1–2% spread the "Buy" button charges.
Fees that actually matter
Three layers: trading fee (per order), spread (the gap between buy and sell price), and withdrawal fee (flat, per network). Use our fee comparison tool to see what 12 trades a month cost on each exchange. For withdrawals, choose a cheap network (e.g., USDC on Base or Solana rather than Ethereum L1).
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Withdraw to your wallet
After each purchase, send the coins to your hardware wallet (Step 4). Copy the address from your wallet, paste it in the exchange, select the matching network, send $5 first, confirm receipt, then send the rest. Keep a trading float on the exchange if you trade often.
Dollar-cost averaging
Buying a fixed amount every week removes the timing decision and emotional trades. Most exchanges automate it. Run the numbers in our DCA calculator before deciding the amount.
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Frequently asked questions
Why does the exchange need my ID?
Anti-money-laundering law. Unregulated no-KYC venues are where frozen funds and exit scams cluster.
Bank transfer or card?
Bank transfer: 0–1% fee. Card: 2–4%. Over a year of DCA the difference is real.
Can I lose money if the exchange gets hacked?
Yes, unless it has insurance or proof-of-reserves and a solvency buffer. Minimise what you leave there.