Launched back in 2014, NEO remains one of the most important cryptocurrency projects that is highly popular. Each year the number of Neo exchanges keep growing because of the popularity of Neo tokens. This makes it challenging for a user to select the perfect platform suited to his needs.
This guide will teach you everything you need to know when selecting the best Neo exchange that will help you buy/sell Neo in 2021.
Compare the Best Neo Exchanges
Given the plethora of Neo exchanges available in the market today, which all promise the best services, it isn't easy selecting the perfect platform that suits your needs. This guide will list some of the best exchanges where you can buy/sell Neo tokens in 2021 along with their features and advantages.
Understanding Neo Exchange
A Neo exchange can be defined as a digital marketplace where one can buy and sell Neo tokens using other currencies or fiat. They resemble regular stock exchanges but differ in a few ways, such as running 24/7 all year round and users relying on huge crypto market volatility to make profits.
A Neo exchange acts as a middle man between the buyer and the seller and charges a small fee for its services.
To get started on a Neo exchange, you have to deposit either crypto or fiat into your account. The funds can be used to purchase Neo tokens from other exchange users and even sell them. There is minimal risk involved in this process as long as you deal with reputable exchange platforms. Similarly, place a withdrawal request to withdraw tokens.
To be allowed to use a Neo exchange, there are a few requirements you need to meet. These include joining a reputable platform by registering and verifying your identity. The steps required for signup will vary from one platform to another. Still, they will typically involve using your official name and uploading official documents to ascertain the account's real owner.
Some Neo exchanges have to abide by various KYC and AML regulations, and that's why users have to verify their identities. But if you would like to keep your identity anonymous, you can opt for platforms that will not ask for KYC. However, remember that these exchanges are not safe to use and risk of fraud is greater on such platforms.
Trading Neo tokens on various exchanges will occur through "Buy" and "Sell" orders, which are automatically matched by the platform's software. Once you are signed in, you will be taken to the trading dashboard.
Different types of Neo Exchanges
Neo exchanges come in different forms, with each type aiming to meet the needs of different users. These include centralised exchanges, which are the most common and controlled by a single entity. They are highly regulated and allow trades to occur using fiat-crypto, crypto-crypto, or both.
Another type is decentralised exchanges, which are the opposite of centralized exchanges. They lack a centralised governing body and are non-custodial. If you like privacy, you will love these platforms, which use protocols and networks to facilitate the automatic transfer of funds between users.
Derivative exchanges allow for trading financial instruments based on Neo, such as CFDs, where users speculate on price movements for healthy returns. Here you can use leverage trading to maximise your profits.
The user who wants to conduct immediate trades can try instant exchanges, which are another variant of non-custodial Neo exchange but more straightforward to use than decentralised exchanges. These platforms allow for instant conversion of Neo tokens to the currency of your choice.
Finally, there are peer-to-peer (P2P) exchanges. They are quite popular in countries that lack traditional banking structures and link users through an escrow platform where they can negotiate on trades.
How to Choose a Neo Exchange?
There are several factors to consider when choosing the right Neo exchange that serves your needs well.
The platform should offer a simple user interface that is welcoming to all.
Depending on how you would like to fund your account or make withdrawals, you have to ensure the platform supports payment methods you feel most comfortable with. The fees should also be fair or minimal compared to other available options. If you engage in regular trading, then fees can add up, consequently taking a significant chunk of your profits.
Liquidity is another critical factor to consider since a platform with higher liquidity will allow for fast trade executions assuming you don't have the whole day to wait on trades. Also, consider the type of trades supported by the Neo exchange of your choice. As mentioned in the section above, different exchanges will support different types of trading.
Security is paramount for any platform that deals with user funds. You have to assess whether the platform you chose adheres to the highest security standards within the industry. It should support two-factor authentication (2FA) to bolster account security.
Advantages & Disadvantages of Using a NEO Exchange
Should I Buy or Trade Cryptocurrency?
The answer to this question lies in your objectives. Trading is short term while investing is long term. If your goal is investing, you can make small investments over time and watch as your portfolio grows. Trading is for people who want to make regular trades within the market and require adequate market knowledge.
Thanks to various derivatives platforms, you don't have to own the real asset to trade. Such platforms allow the user to trade different trading instruments derived around NEO, such as futures, options, CFDs, and trade them without having to own NEO itself.
Futures allow the user to set a predetermined price at which a trade will be executed on a specific date in the future. They are quite risky due to high price fluctuations within the crypto market but can lead to high returns.
Crypto options allow the trader the right to buy/sell the underlying asset at a predetermined price on a specific future date.
CFDs are "Contract for differences" and allow the trader to speculate on the Neo price movements by taking long/short positions. If done well, they can lead to great profits, and the good thing about them is you don't have to own the underlying asset.
3 Steps to Using a Neo Exchange
Step 1: Choose a Neo Exchange
You will have to do your due diligence and select a Neo exchange platform you feel meets your core needs. Users must evaluate a platform on several parameters such as security and ease of use before finalising an exchange.
Step 2: Signing up/Setting up Neo Exchange
After deciding which platform to use, it's now time to sign up. You will have to provide personal information like your name, email address, residence address, and phone number. Then you have to upload photos of your ID and utility bill to verify your identity.
Step 3: Deposit initial amount and start using NEO Exchange
After you are done verifying your account, it's time to start using the exchange services. Once signed in, the first step is depositing funds to your account, and then you can buy/sell Neo.
In summary, your choice of the best Neo exchange in 2021 will depend on different factors. Personal preferences such as anonymity, payment methods supported, how to trade the coins, and so forth will influence the decision. Remember, different types of Neo exchanges will offer different ways to buy and sell Neo tokens. Most importantly, choosing a platform that offers maximum security for your tokens is something you will have to prioritise.
Frequently Asked Questions
Yes. This can be a result of weak security measures implemented, such as weak passwords.
On top of adding a strong password, ensure you activate the two-factor authentication (2FA).
The exchange itself sets the buy/sell rates based on buyers' and sellers' actions on the platform and other exchanges' rates.
Crypto exchanges hold funds for millions of users. In the case of centralised platforms, they are quite attractive to hackers. This means they are frequently targeted, and even those with the best security measures end up being breached. If this happens, a platform that stores the tokens in cold storage will incur minimal losses.
Yes, it's possible as long as the price difference is big enough to cover exchange fees.
Yes, trading Neo tokens is legal in many parts of the world but check your local laws before using an exchange.
There are several ways an exchange will make money, including listing fees, taking commissions, etc.
Deal with KYC compliant and reputable platforms to reduce the risk of fraud.