Investing in cryptocurrency can be a confusing and intimidating experience for even the savviest investors. With more than 500 crypto investment platforms available, it's essential to do your research before committing - but where do you start?
In this article, we simplify the selection process by highlighting three key factors to consider when choosing your preferred crypto investment platform.
Are you ready? Let’s get started.
What Are the Different Types of Crypto Investment Platforms?
By first understanding the different types of crypto investment platforms, you'll be better able to make an informed decision about which one best meets your needs. Here are some of the most popular ones:
These are web-based services that allow users to buy, sell and trade crypto for other digital or fiat currencies. Crypto exchanges tend to offer a wide array of trading pairs and can be useful for those looking to speculate on price movements or simply buy and hold their digital assets.
These are software programs designed to store digital tokens. They come in hot wallets (connected to the internet) and cold wallets (not connected to the internet). Hot wallets typically have more security features than cold wallets but both offer secure storage of your tokens.
Crypto brokers provide customers with access to crypto markets by acting as intermediaries between them and cryptocurrency exchanges via an online platform, allowing customers to purchase digital assets directly from their brokers rather than having to go through a crypto exchange.
Decentralized Exchanges (DEXs)
This type of platform uses blockchain technology so that users can avoid having third parties facilitate their trades. DEXs are generally safer than centralized exchanges as there is no central server or point of failure, meaning customer funds remain safe even if an attack occurs.
CeFi, DeFi, and CeDeFi
Crypto investment platforms can also be categorized as Centralized Finance (CeFi), Decentralized Finance (DeFi) and Centralized Decentralized Finance (CeDeFi).
CeFi refers to a financial practice in which users can earn interest and obtain loans on their crypto through centralized exchanges and platforms. To process orders, you must entrust your private keys to a third party which, in most cases, is an exchange or a lending platform.
On the other hand, Conversely, DeFi refers to a wide array of financial products and services built on blockchain technologies in the public blockchain realm. Put the best attributes of CeFi and DeFi together, and you have CeDeFi
To read more about CeFi, DeFi and CeDeFi, you may click here.
3 Things To Look For When Choosing the Best Crypto Investment Platform
Now that you’re familiar with the different types of crypto investment platforms, here are the 3 main platform features that you should make sure are provided by the crypto investment platform that you’re considering to use or sign up for:
First and foremost, consider the security features offered by the platform. Does it have measures in place to protect your funds from potential hacking attacks or other cyber-related threats? It's also important to check its track record when it comes to customer support - you most definitely would want a platform that can quickly and effectively respond to any issues you may have with your account.
Transparency is also essential when it comes to crypto investing platforms as it gives investors peace of mind that their funds are secure and that the company behind the platform is legitimate. Without transparency, there will always be a cloud of doubt hanging over any given platform - something that no investor wants to experience.
When it comes to generating rewards on your crypto, you definitely want a platform that offers yield percentages that are both reasonable and reliable.
Since yield percentages differ on every crypto investment platform, you must carefully look into how or where the yields are generated, and whether the percentages in your preferred platform fluctuate too often or are too high. It’s definitely a red flag if such information isn’t available or if the yield percentages are too good to be true.
Not everyone has time to fully understand the intricacies involved in crypto investing or how cryptocurrencies work. For this reason, crypto investors - especially beginners - should put ease-of-use in their list of considerations when choosing their crypto investment platform.
Is it user-friendly? Is it available on mobile? Is it functional? These are some of the questions that you should be asking yourself before signing up for an account. If you want more tips on how to choose the best crypto investment platform, watch the video explainer below which features our CEO and Co-Founder Julian Hosp.
What’s the Easiest Way to Choose the Best Crypto Investment Platform?
If you’re not sure how to check for these main features or simply don’t have the time to do so, don’t worry, there’s an easy solution: check customer reviews or feedback on the platforms that you’re considering to use or sign up for.
At Cake DeFi, we pride ourselves on having our customer reviews available for everyone to check and consider before signing up for an account. By simply going to Trustpilot, a potential customer can see our most up-to-date rating and check more than 1,000 reviews given by real people.
In fact, you can check some of the most recent ones below:
And that’s it! If you want to use our services but have not signed up for a Cake DeFi account yet, click here to start using a CeDeFi platform that is secure, transparent, easy to use and offers stable rewards on your crypto.