How do cryptocurrency exchanges work?

Crypto exchanges function similarly to online brokerage platforms, providing you with the tools you need to buy and sell digital currencies and tokens like Bitcoin, Ethereum, and Dogecoin. When choosing a cryptocurrency exchange, it’s important to look at factors such as supported assets, fees, payment methods, and security.

Is your cryptocurrency exchange secure?

This is one of the main reasons why security is often a big concern when buying digital currencies. If you plan on investing in cryptocurrency, it's a good idea to make sure you're using an exchange that goes out of its way to protect your investments. What makes an exchange extra secure?

Do crypto exchanges have FDIC insurance?

Crypto exchanges don't have FDIC insurance. But the exchanges that take security seriously do provide additional insurance for your crypto. That way, if it gets stolen from the exchange, you may be compensated. Cold storage: Exchanges need to keep some currency in what's called "hot storage," which means it's online and accessible.

What should you look for in a crypto exchange?

But users should look for an exchange that will go the extra mile to keep their Bitcoin and other currencies safe. Here are three additional security measures to look for: Insurance: When you put money in a bank account, it's usually FDIC insured, protecting it against theft or bank failure. Crypto exchanges don't have FDIC insurance.