3 Things Investors Need to Know About Crypto Swaps


The cryptocurrency industry is known for its ability to use innovative technology to provide seamless and frictionless ways to store, sell, buy, and trade digital assets. It’s crucial for investors to be educated on different topics concerning digital currency, as it can sometimes be complex and mystifying. Investors need to do their due diligence and regularly consult a professional like this UK cryptocurrency accountant to protect their investments and remain financially stable.

In the spirit of learning more about crypto, swapping cryptocurrency is an emerging trend that investors should be aware of. Understanding how crypto swaps work will better prepare investors, such as yourself, to exchange currencies more efficiently while protecting your assets.

Let’s discuss the ins and outs of crypto swaps — what they are, how they work, and what you should expect if you plan on getting into swapping.

What Are Crypto Swaps?

Swapping allows investors to exchange one cryptocurrency for another quickly, safely, and securely. It’s common for these types of swaps to occur on one centralized system, such as a swapping platform. Let’s outline some of the benefits that users enjoy when engaging in exchanges:

  • Swap for an asset that you believe will grow in time
  • Use stable coins as opposed to volatile assets
  • Hedge against any external factors
  • Allows you to get the most out of your altcoins
  • Reduces costs to switch to another currency

Protecting your assets should be a top priority for you as you navigate the world of cryptocurrency. In some cases, you’re able to swap crypto without having to leave your digital wallet, which makes it an efficient and seamless process.

The Popularity of Crypto Swaps

Back in 2018, some cryptocurrency providers, two being EOS and Tron, underwent a “token swap” — where a digital asset is exchanged for an equal counterpart. Around the same time, the IRS changed tax laws and made crypto trades taxable. Investors should be aware of the tax implications when participating in crypto exchanges.

Because of the digital nature of crypto, the idea of exchanging and transferring assets would not be possible without platforms updating their code or introducing a new framework or infrastructure.

Let’s take EOS and Tron, for example. They both had projects running on Ethereum, and soon after, were successful in migrating from Ethereum to their own blockchain. In this case, investors could exchange Ethereum tokens for official tokens provided by EOS and Tron. The new coins still maintained the same market value and were able to help investors build their portfolios.

Now that we know how popular crypto swapping is and what it means, let’s get into more details on how you can exchange crypto tokens securely.

Things You Need to Know About Crypto Swapping

Below are some considerations you should take into account when you want to start exchanging your cryptocurrency for other forms of crypto. It’s imperative to do your own research before participating in order to protect your digital assets.

1. Choose the Right Swapping Platform

It’s vital that you research which swapping platforms are available to you. Here are some examples of swapping platformsthat may work to your benefit:

  • Changelly
  • Change NOW
  • Simple Swap
  • Swapzone
  • Exolix
  • Airswap

These are only a handful of examples, but there are plenty of choices that come with their own unique benefits. Some are known for their easy-to-use interface, while others are better for more experienced users.

2. Prepare for Fluctuations

The nature of the crypto market lends itself to volatility and fluctuations, so be prepared to see differences in value regarding the tokens you’re swapping. Because markets can move quickly, the result can sometimes be slippage. Essentially, the value from your first currency can decline while you’re in the middle of completing an exchange, so your new currency may not have as much value.

Thankfully, some swapping platforms, like Changelly, swap on a fixed rate, so you know how much value your future coins will have.

3. Understand Exchange Fees

It’s possible for exchange fees to vary, so it’s important for you to be aware of these fees and how they can affect your digital currency portfolio. Make sure you’re getting the most bang for your buck when you participate in crypto swapping — the fees shouldn’t outweigh the value of the coins you’re getting in return.

It would be challenging to cover all of the nuances of crypto swapping. Still, these are some of the things you should consider before getting into this kind of currency exchange.

The Future of Crypto Swapping

The rapid growth of cryptocurrency comes with pros and cons. One pro is that user experience remains a priority for industry leaders. The ability to swap is now more prevalent than ever. It will continue to force service providers to upgrade their features and capabilities.

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