Risks tied to using a single exchange

[MarjorieZimmermanGinger]

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.

That certainly exists, and we ourselves may even employ such a strategy because it's impossible to withdraw all our assets at the end of a trade due to the inconvenient withdrawal fees for each transaction. While this may seem reasonable, everyone has their own perspective, but when it comes to asset storage, we must agree that exchanges are not a safe place to store them. A small amount of our assets are certainly stored on exchanges as part of our transactions, and perhaps when trading, we don't have the hassle of transferring them from our wallet to the exchange every time. In my opinion, that's perfectly normal and not a major issue.

[Faisal2202]

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 ?

I did not know Binance futures went down. I don't trade in future but if the same thing happens to spot trading, then I will be angry if a coin meets my entry and my buy limit does not trigger, although this usually happens on Binance let's say if a big number like a multiple of 5 is used as buy or sell price, for example 5,0.5, 0.005, etc. These numbers are too exposed, and especially on Binance, market makers manipulate the order book to either pump high or dump high, like sudden movement around these numbers, especially around the new candle formation.

KuCoin and some other exchanges are better in this case and sometimes we can even get better rates on other exchanges, but on Binance, we don't have a chance to get anything a bit cheaper, although few cents don't make much difference.

[EarnOnVictor]

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.

I fully agree with that. No exchange or any program or establishment can be perfect, so the best ones could disappoint you when you need them most. If not the technical failure that you emphasised in this thread, it could be some other poor service or manipulations.

I've caught exchanges manipulating the market price just because they want to "bucket chop" the trader, which is off. They hunt stop losses too. So if you divide the money in exchanges and one disappoints you, the other might still save the day.

Lastly, those whose accounts were frozen didn't expect it. Even if the account is later unblocked, what about the many times wasted? We have many more reasons why our exchanges shouldn't be limited to just one.

[Firstfrost]

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 ?

I did not know Binance futures went down. I don't trade in future but if the same thing happens to spot trading, then I will be angry if a coin meets my entry and my buy limit does not trigger, although this usually happens on Binance let's say if a big number like a multiple of 5 is used as buy or sell price, for example 5,0.5, 0.005, etc. These numbers are too exposed, and especially on Binance, market makers manipulate the order book to either pump high or dump high, like sudden movement around these numbers, especially around the new candle formation.

KuCoin and some other exchanges are better in this case and sometimes we can even get better rates on other exchanges, but on Binance, we don't have a chance to get anything a bit cheaper, although few cents don't make much difference.

You know that’s actually why I started using Bitget more often. The order book feels less manipulated and the fees are abit better too. And I recently just found out about there rewards programs which I'd start taking advantage of. So for me, even though I use Binance also, the former just feels smoother and fairer

[michellee]

You can trade in two exchanges but I suggest you be careful. That may effect to your emotions. You need to have more skills to control and check all your account in the exchanges. You need to take action if your trading is almost liquidated.

Trading in one exchange can reduce your stress so this will not suggest to those who don't have much skills. But I suggest you not to participate in the trading competitions because that is difficult to compete with other traders.

[The Cryptovator]

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 ?

Though I am not a future trader, this problem would happen in spot trade as well. Those that are related to the internet can't assure uptime always; there might be something happening or maintenance mode as well. Usually I don't rely on a single exchange and don't store funds there. I move the funds to my hardware wallet after buying from the exchange. And if I need to sell, just move to the exchange, but don't rely on a single exchange. Always use multiple exchanges for that.

Just a few days back I sold and rebought my Ethereum. I send two different exchanges to sell my Ethereum. Once I bought back then, funds were sent to my hardware wallet. I can't really trust a single exchange when the funds are big. Because I have suffered before from Binance about freezing funds, though later they unfreeze and release my funds.

[Ishicryptic]

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.

You are correct that no exchange is flawless, that is why the advice is given not to store your coins in an exchange, none custodial wallet which you have a total control over is best. For traders the same thing applies, no trader should depend only on one centralized exchange for their trading, whatever happens to that exchange will affect their trade and coins. Since we have more than one reputable exchange it makes sense to use more than one to be sure that no matter what can happen to one you will still be moving on with your trade. Mentainance, hacks or bankrupt can disrupt trading in a perticular exchange, it doesn't need to disrupt your trading if you are using other exchanges also.

[Issa56]

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.  

No exchange is completely reliable, anything can happen to any exchange at any moment. If you are a trader, having accounts in different exchanges is not something bad, but you don’t have to trade on different exchanges at the same time, it doesn’t make sense to me. You might have account in different exchanges, if you notice that a exchange is having issue, you can just switch to another one pending when the previous one which you were using will be back, but if you decide to trade on two different exchanges at the same time, then you might end up getting confused.

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 have lots of exchanges, and I don’t think there is anything wrong with that, but if you are trading, just make use of one exchange, and you should know that whenever you won’t be trading for some time, make sure you don’t leave your money on exchange, make sure you withdraw your money immediately because anything can happen to the exchange, and you can lose your money, no exchange is too big to be compromised.

[Odogwu-Blockchain]

...

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.

OKX is a centralized exchange and it is not a good exchange with shady KYC and account freezes reported.
OKX frozen my account and required me to KYC with a less than $1,000 deposit.

Okex have many rules that chases away customers from their exchange for long, imagine deposit of Bitcoin and other coins less than $10 won't be reflected in your balance even if a consecutive deposit less than $10 totaling $15 in total (for instance) won't still be reflected.

There restrictive policy doesn't favor low balance account many times, I don't trade on okex because of these red flag.

[Alpen]

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're right about using multiple exchanges, but I'd add that the choice of each platform should be for a specific benefit, not just for diversification.

I also used OKX for a while, right up until their founder disappeared with the wallet keys and they froze withdrawals for a long time. I started way back with BTC-e, but luckily left before the US seized their servers.

These days, my setup is more strategic. I use Deribit for options and futures, which helps me hedge my spot positions. For buying actual crypto, I use the Cryptomus wallet and exchange because they have the lowest fees and many of my crypto business partners are also their clients, so I even get cashback

[Bitcoin_people]

You are right, most people use multiple exchanges, very few people stay in just one. I use multiple exchanges so that my money is less at risk, when I put all my assets on one exchange, if it gets hacked, all my money will be lost. So if I collect my funds on multiple exchanges, if one day it gets hacked, I will not suffer much.
However, I use a few popular exchanges, the top exchanges are very unlikely to be hacked, and their security is very strong. However, one place to collect and keep your funds safe is a wallet, the chances of hacking are much less here, wallets are safer than exchanges.

[Coyster]

However, I use a few popular exchanges, the top exchanges are very unlikely to be hacked, and their security is very strong.

Ftx was a top exchange, but it went bankrupt due to mismanagement, Binance is a top exchange, but it has been hacked in the past, Bybit is also a top exchange, but not so long ago they were hacked and lost $1.5 billion dollars, i can give you many more examples of this. Of course i know it is best to use "top" exchanges, but i disagree that it is unlikely they get hacked, many of them do not pay as much attention to security as you think they do, they are all about making money and that's most important for them.

[CryptopreneurBrainboss]

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 ?

Not putting all your eggs in one basket has always being my slogan when investing and this isn't just particular to the crypto industry. I don't have only one wallet or use only one exchange as others advice. Sure there's a particular one I'll be using more often but there are always others ready to be utilized when things aren't going so great with the other. My most recent exchange that I use more often is bybit. I was a big fan of Binance before but recently they haven't been giving me the services I want. OKX I have heard alot about but I haven't used that exchange before. Kucoin was another alternative I used to have for Binance but now it has to be Bybit.

[Wakate]

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.

I fully agree with that. No exchange or any program or establishment can be perfect, so the best ones could disappoint you when you need them most. If not the technical failure that you emphasised in this thread, it could be some other poor service or manipulations.

I've caught exchanges manipulating the market price just because they want to "bucket chop" the trader, which is off. They hunt stop losses too. So if you divide the money in exchanges and one disappoints you, the other might still save the day.

Lastly, those whose accounts were frozen didn't expect it. Even if the account is later unblocked, what about the many times wasted? We have many more reasons why our exchanges shouldn't be limited to just one.

We ought to use these exchanges with caution whether for peer to peer transactions or trading. These are the two reasons I am using an exchange which are mostly normalized but it would not make a sense when we try to keep our crypto portfolios on exchanges when we don't even have access to our private keys or seed phrases.

Understanding the safety attached to using a decentralized wallet to keep our crypto portfolios is very crucial and we should never see it as a joke. Users' funds are been locked up on exchanges forever without having access to them and that should sound as warning to everyone that have crypto exchanges as backup.

[mindrust]

That's a big problem if you open positions and wait till the position is filled. I never do that and therefore I never experience this problem. Instead, If I am going to buy or sell, I deposit my coins, make the trade and immediately withdraw them to my cold wallet. That way I will almost never get affected by them exchange hacks or some other unexpected issues.

There are also those instant swap services on oragefren.com and they work great too. Tbh, when they exist I don't even feel and need to use binance or a similar centralized exchange. They are definitely not worth the risk you are taking.

Either use decentralized exchanges like bisq and if you can't for some reason, at least use automated no-KYC exchanges. eXch is gone now but the other alternatives are not bad either.

[Oshosondy]

That's a big problem if you open positions and wait till the position is filled. I never do that and therefore I never experience this problem. Instead, If I am going to buy or sell, I deposit my coins, make the trade and immediately withdraw them to my cold wallet. That way I will almost never get affected by them exchange hacks or some other unexpected issues.

That is the problem we position traders are having. But I have not used an exchange that was hacked before except Bybit. And at the time  Bybit was hacked, I did not have any positions opened and neither did I had money on the exchange at the time.

If I want to trade with $1000, I prefer to deposit $100 on the exchange and use 10x and ready to deposit more fund if the trading is going against my position. I also have more than one exchanges.

[programmer3666]

Spreading to different exchanges is a must if you are a trader or if you are staking something to make profit, but still it's risky; we don't have full control of them. That's why you don't put much into exchanges if your purpose is to hold.
Since mine are spread out to Binance and OKX and some of them on Bitget, I'm not worried much if one exchange is shut down since I use them to take advantage of earning from doing some tasks and free airdrops and earn from staking. As I do want to grow them each while trading mainly on OKX.

About the issue above about OKX I don't have an issue using it except the last time that I deposited, it wasn't credited to my account due to the minimum deposit, below minimum but they solved the issue after a few months when the minimum deposit was dropped.

you are right bro!! spreading across exchanges is smart move and it should be a must!! but like you said, it still carries risks since none of us actually own or control those platforms to begin with. that is why it is always better to only keep what you need for trading or staking on exchanges and move the rest into selfcustody wallets to avoid stories that touches the heart. at least that way you reduce the damage if anything goes wrong in the future. i also like using multiple exchanges because each one has its own advantage in a way!!! some give better liquidity, others have good promos or airdrops opportunities. but i don't treat them as tools for storage at the end of the day.

[Peanutswar]

There's nothing wrong if you will not stick with the single exchange the perks of different exchange varies so its up to you if you will open different account before ive been using with the Binance smoothly without an issue not until my country banned with the use of the Binance but apparently there are other exchange gives an opportunity to me so i ended up use other exchange again theres other CEX right there have an issue reason why not recommend to store most of your funds into their platform, have a risk management that you are willing to lose. Just a small amount use for trading is enough for me to hold with the CEX unused funds must need to keep safe into the hardware wallet to make sure its not prone at risk.

[Mame89]

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.

That certainly exists, and we ourselves may even employ such a strategy because it's impossible to withdraw all our assets at the end of a trade due to the inconvenient withdrawal fees for each transaction. While this may seem reasonable, everyone has their own perspective, but when it comes to asset storage, we must agree that exchanges are not a safe place to store them. A small amount of our assets are certainly stored on exchanges as part of our transactions, and perhaps when trading, we don't have the hassle of transferring them from our wallet to the exchange every time. In my opinion, that's perfectly normal and not a major issue.

Due to various considerations when trading, we sometimes need to store our assets on an exchange. This is sometimes due to cost considerations, but always choose an exchange with a well-known reputation. While there are no guarantees regarding security, we should trade on more than one exchange. Exchanges often experience problems when prices fluctuate often experiencing maintenance, and so on which can cause us to miss opportunities to sell or buy.

However we all agree that exchanges are not a safe place for long-term storage, whether small or large amounts. If you're planning to store your assets long-term, try to keep them in a wallet you can control. As many people say, "not your wallet, not your assets."

[BABY SHOES]

Yeah, of course, some exchanges are used for trading, but I never put a lot of money in exchanges because it's too risky... so even if I trade, it's with a small capital of less than $500, but even that is rare.

I have a friend who always uses one exchange for futures trading, and he refuses to switch to another exchange he keeps tens of thousands of dollars in it, even though I've told him not to keep money in the exchange but he says it's just to maintain the margin so he doesn't get liquidated if the open position reverses direction.