Risks tied to using a single exchange

[Potato Chips]

I've never been able to stick to one—no pun intended lol — as I like to shift liquidity in other platforms and most importantly, use cases matters very much like xyz coin is only at abc exchange.

Above all, there is always a risk of exploit in any centralized platform thus it's good to go multiple. I also believe your volume matters too when it comes to being on an exchange's radar, thus the reason why I like shifting liquidity in other platforms so it's not concentrated in one single platform. Overall, I think pros outweighs. 

[mich]

Well I do think you are right about this. It is good for us to have more then just 1 crypto exchange if we need to make a trade. If we only have 1 exchange we can miss out on making some profit.

For me I do only have Binance and Coinbase. I do remember I wanted to make a small trade for some profit and Coinbase website was down. After this I put some coins in my Binance account so if it did happen again I could make the trade.

[harapan]

I still stand on ‘no exchange is perfect’ but having a backup to spread your activities on would definitely save some stress when the unexpected happens which is why OKX is my third one. Just like having a diversified portfolio and having multiple investments basket, having different exchanges is a good decision in my opinion.

I agree with you that just as you diversify your assets it's required as well to do same for the exchange used, cause of unforseen circumstances like what happened before, so spreading out on ones exchange is an advantage in making sure you're not stuck to one exchanges and have a loss.

[shield132]

When Binance futures went down earlier today, it reminded the risk of relying solely on a single exchange. Though I didn’t have a position opened on it at that period because i already placed a trade on Bitget at the time but i know those who were stuck. This just shows why you should have options open as a form of risk management because this can happen to any exchange at any time.  

I still stand on ‘no exchange is perfect’ but having a backup to spread your activities on would definitely save some stress when the unexpected happens which is why OKX is my third one. Just like having a diversified portfolio and having multiple investments basket, having different exchanges is a good decision in my opinion. Do you also use multiple exchanges or you stick to one ?

How does having a backup exchange help when you have an open position on futures? If exchange goes down and you are near to liquidation level, then you'll get liquidated and that will be the end of the story. That is the reason why I do not trade futures anymore, especially with leverage. In 2021, when China banned Bitcoin mining and Elon Musk also ruined everything, Bitcoin's price crashed and there were so many people trading on Binance that it was offline for a few hours. At that moment, my friend had opened a long position on one coin and he got liquidated despite the fact that it wasn't his fault, it was Binance that couldn't work but he lost money and Binance didn't recover anything.

[Mpamaegbu]

This just shows why you should have options open as a form of risk management because this can happen to any exchange at any time.

That's why we can't overemphasize the use of SL (Stop Loss) and MM (Money Management). Without those two, no matter how good one tends to think one is trading, it's just a matter of time before one burns that account and several others.

Do you also use multiple exchanges or you stick to one ?

The idea of having more than one exchange accounts is better than having one but that's not to say it's a wise decision to spread oneself think by operating several exchange accounts. Maybe two or three, and at most four accounts will be okay to operate at once. I said four exchange accounts because there are certain exchanges where coins/tokens one wants to buy aren't listed. No exchange has all coins and tokens. For me, having Trust Wallet and Phantom wallet is a must for anyone trading in this industry.

[Phoenixtrader]

Yeah youre right! no CEX is flawless Binance, OKX, Bitget, Bybit, Kucoin and many more theyve all had downtime before. Thats why I always keep accounts on a only limited cex, it’s just smart risk management and same way you diversify assets. Relying on one exchange is not good. But its always better to keep the funds or asset on a non custodial wallet for maximum protection.

No exchange is flawless though but I haven't experienced downtime while trading futures with Bitget even when the market goes crazy that's why I stick to them till this time.. anyways yeah diversifying is key and to be safe your suggestions are valid.

[cryptoaddictchie]

No exchange is flawless though but I haven't experienced downtime while trading futures with Bitget even when the market goes crazy that's why I stick to them till this time.. anyways yeah diversifying is key and to be safe your suggestions are valid.

Thats a solid point. Bitget has indeed built a reputation for being stable even when the market is extremely volatile, and I can see why that reliability keeps you loyal to them. Its definitely a big advantage when an exchange doesnt freeze or lag during critical moments, since that can make or break a trade. Still, like you said, no platform is 100% flawless, and thats why having backups and diversifying across different exchanges is a good safety net.

At the end of the day, its all about reducing risks wherever possible while making sure you’re comfortable with where you trade. So I have binance, kucoin, mexc, bybit and some cexes but Id still keeping my biggest chunk of assets on non custodial wallets.

[bitLeap]

Regardless of which exchange you use to avoid downtime, Stop Loss and Take Profit are the best way to keep your assets within a target range. Holding trading assets on multiple exchanges is advantageous, allowing you to capitalize on price differences, as these differences depend on active trading volume. However the risk remains the same: you're risking your money on each exchange without a withdrawal plan.

[AVE5]

Yeah youre right! no CEX is flawless Binance, OKX, Bitget, Bybit, Kucoin and many more theyve all had downtime before. Thats why I always keep accounts on a only limited cex, it’s just smart risk management and same way you diversify assets. Relying on one exchange is not good. But its always better to keep the funds or asset on a non custodial wallet for maximum protection.

Non custodian wallets has always been best to hold funds that's not protected to execute projects in the short time if truly want to stay psychologically healthy and safe wise with our funds secured in the long with the amounted attempts of scammers invasions on the centralized exchange.
And while exchange may offer these trading features services, traders should always consider the platforms reputations taking users conveniences a prior. I've only used few few exchanges as Binance, Bybit and Bitget for my trades and I'm much comfortable with them because they usually send alert messages whenever they want to do technical or system services in their platform. That'll help users to migrate to other convenient platforms to do their trading tasks with an early inform so that users doesn't get trapped.

[gunhell16]

Yeah youre right! no CEX is flawless Binance, OKX, Bitget, Bybit, Kucoin and many more theyve all had downtime before. Thats why I always keep accounts on a only limited cex, it’s just smart risk management and same way you diversify assets. Relying on one exchange is not good. But its always better to keep the funds or asset on a non custodial wallet for maximum protection.

Proper risk management is a huge help for us traders and holders. As investors, we should always be aware of the unexpected things we might face,
especially given the current market situation.

It's likely that we won't see the true direction of Bitcoin's price for another two days, given the circumstances we're facing right now.  That's why if we're using an exchange,
we have to make sure we're fully prepared. For instance, I think Bitget is a solid option.

[Mahanton]

Yeah youre right! no CEX is flawless Binance, OKX, Bitget, Bybit, Kucoin and many more theyve all had downtime before. Thats why I always keep accounts on a only limited cex, it’s just smart risk management and same way you diversify assets. Relying on one exchange is not good. But its always better to keep the funds or asset on a non custodial wallet for maximum protection.

Non custodian wallets has always been best to hold funds that's not protected to execute projects in the short time if truly want to stay psychologically healthy and safe wise with our funds secured in the long with the amounted attempts of scammers invasions on the centralized exchange.
And while exchange may offer these trading features services, traders should always consider the platforms reputations taking users conveniences a prior. I've only used few few exchanges as Binance, Bybit and Bitget for my trades and I'm much comfortable with them because they usually send alert messages whenever they want to do technical or system services in their platform. That'll help users to migrate to other convenient platforms to do their trading tasks with an early inform so that users doesn't get trapped.

Non-custodial wallets give complete control over funds and limit exposure to risks common with centralized exchanges frequent hacks scams and sudden restrictions make them a strong choice for long-term security.
Choosing reputable exchanges is crucial even when convenience and trading tools are available platforms that provide clear communication about technical updates and maintenance like binance bybit and bitget enable users to move funds or adjust positions in time reducing the chance of being caught off guard. Using secure wallets alongside trusted exchanges creates a balance between accessibility and safety it promotes informed decision making while protecting funds and reducing stress and potential losses.

Non-custodial wallets also support responsible fund management and minimize dependence on third parties this approach shields against unexpected platform shutdowns account freezes or regulatory changes that may impact centralized exchanges keeping track of exchange announcements and system updates ensures users can respond quickly, overall a system that combines long-term storage in non-custodial wallets with selective trading on reliable exchanges strengthens both security and flexibility it allows engagement in trading opportunities while preserving financial safety and peace of mind.

[masulum]

-snip-
For instance, I think Bitget is a solid option.

Even though Bitget has been working to improve its reputation, I still can't accept it as my primary choice. I have no issues with Bitget; I still use it occasionally when I need low-volume tokens markets to make a small profit from pump and dump scheme . Currently, I mostly use Binance and OKX. Before, Bybit was hacked I mostly use them as alternative, because of that case it's been a few months I'm not open Bybit anymore.

[Finebone]

When Binance futures went down earlier today, it reminded the risk of relying solely on a single exchange. Though I didn’t have a position opened on it at that period because i already placed a trade on Bitget at the time but i know those who were stuck. This just shows why you should have options open as a form of risk management because this can happen to any exchange at any time.  

I still stand on ‘no exchange is perfect’ but having a backup to spread your activities on would definitely save some stress when the unexpected happens which is why OKX is my third one. Just like having a diversified portfolio and having multiple investments basket, having different exchanges is a good decision in my opinion.

You are right about all this you said here especially if you have so many activities you are using this exchange for, because sometimes an unexpected issue might arise which might get you stranded if you have no other options, so having more options when using exchange services are very important, in other not to be disappointed in the future.

Do you also use multiple exchanges or you stick to one ?

I wouldn't say it's multiple because they are just two, I am using only bybit and bitget since they support p2p services in Nigeria. So it's only two exchange accounts I have as of today.

[beveryu778]

When Binance futures went down earlier today, it reminded the risk of relying solely on a single exchange. Though I didn’t have a position opened on it at that period because i already placed a trade on Bitget at the time but i know those who were stuck. This just shows why you should have options open as a form of risk management because this can happen to any exchange at any time.  

I still stand on ‘no exchange is perfect’ but having a backup to spread your activities on would definitely save some stress when the unexpected happens which is why OKX is my third one. Just like having a diversified portfolio and having multiple investments basket, having different exchanges is a good decision in my opinion. Do you also use multiple exchanges or you stick to one ?

You should always choose top tier exchangers for trading because they have high liquidity for each coin, due to which you can exit your trade at any time. In futures trading, when trading with leverage, there is already a lot of risk and if you use an exchanger where liquidity is low, then you will have to accept a big loss at the time of exit. Because there will be a big difference between the buy and sell orders of the coin because there are fewer traders there. So far, I use Binance the most and this exchange is enough for trading so far. Because the liquidity of all the coins listed here is very high.

[tvplus006]

...Although having several exchange account is good to diversify your trading activity and minimize risk in case exchange bankruptcy.

As a rule, tokens are not listed on all exchanges, and this is the reason that I have several accounts on different exchanges. In addition, due to the difference in the price of a coin on different exchanges, you can engage in arbitrage trading and this provides an additional opportunity to make a profit by buying a coin on one exchange and selling it on another at a higher price. This does not happen often, but it is necessary to be always ready so as not to miss such an opportunity.

[Coyster]

As a trader you may need multiple exchanges based on the reason explained in the OP, and it could be an advantage in situations such as that. That said, there are also some disadvantages, if you have multiple exchanges, it basically means you have submitted KYC in multiple platforms and that is not so good for privacy. It also multiplies your chances of being a victim to a data breach, which could lead to a series of phishing attacks and if possible physical attacks.

[shinratensei_]

Even better if you also utilize perps from dex instead of just solely relying on cex perpetual market.
These kind of error doesn't happen to binance only. I've used many centralized exchange, some of them got error at some point.

Although even by using more than 2 exchange you can already mitigate the risk most of the time, but a transparent, on-chain perpetual market is good to have in time like this.

[MarjorieZimmermanGinger]

When Binance futures went down earlier today, it reminded the risk of relying solely on a single exchange. Though I didn’t have a position opened on it at that period because i already placed a trade on Bitget at the time but i know those who were stuck. This just shows why you should have options open as a form of risk management because this can happen to any exchange at any time.  

I've never encountered a problem like this because I usually set stop-loss and take-profit limits when opening futures trades on a particular exchange, so maintenance downtime doesn't affect anything. Relying on a single exchange does carry significant risks, especially for those who actively trade or hold assets on that exchange. If the case involves holding assets, an exchange might not be the right choice. However, if you're a trader, choosing an exchange with a high level of credibility is probably better, even though no exchange is perfect.

[Firstfrost]

...Although having several exchange account is good to diversify your trading activity and minimize risk in case exchange bankruptcy.

As a rule, tokens are not listed on all exchanges, and this is the reason that I have several accounts on different exchanges. In addition, due to the difference in the price of a coin on different exchanges, you can engage in arbitrage trading and this provides an additional opportunity to make a profit by buying a coin on one exchange and selling it on another at a higher price. This does not happen often, but it is necessary to be always ready so as not to miss such an opportunity.

Arbitrage trading is another solid reason to use multiple exchanges. For instance, this happened to me last year when one of those TG airdrop listed, the price was on Bitget was a little bit higher than that of OKX. I had to start arbitrage trading when I realized the difference in the listing price across the two exchanges. And yes, opportunities like that don't appear often but we should be able to maximize it when it comes

[Awaklara]

I've never encountered a problem like this because I usually set stop-loss and take-profit limits when opening futures trades on a particular exchange, so maintenance downtime doesn't affect anything. Relying on a single exchange does carry significant risks, especially for those who actively trade or hold assets on that exchange. If the case involves holding assets, an exchange might not be the right choice. However, if you're a trader, choosing an exchange with a high level of credibility is probably better, even though no exchange is perfect.

I still believe there are traders who leave their assets on the exchanges, although it may not be a large amount for traders. They do not want to be burdened with withdrawal fees that would become quite uncomfortable if done continuously at the end of the trading session.

I think it's very reasonable for traders nowadays to have several exchanges that are indeed their favorite places to trade, whether for the purpose of taking advantage of them to make a profit or simply because they are comfortable choosing one or several exchanges for other reasons.