Why do you think it's best to consistently use the same exchange? - page 5.

shield132

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Quote from: Cryptomultiplier on June 02, 2024, 11:21:32 AM

One of the reasons why I think it's best to consistently use the same exchange, is for valuation purposes to maintain consistency, it is so as to determine the fair market value of a cryptocurrency is for during tax preparation. It's how the IRS wants cryptocurrency transactions to be reported on tax returns.

Quote

While "fair value" and "fair market value" are similar, they aren't the same;

Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a particular date.

Fair market value is usually used when evaluating assets and liabilities for tax purposes. It is the price that any property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the releva facts.

The IRS' guidance on this also states that if any crypto is not traded on any exchange, but maybe it was trades pair to pair, P2P, or received as income, the fair market value is whatever the crypto was worth on the date it was received.

https://www.bitwave.io/blog/how-to-determine-crypto-fair-market-value

So, why do prefer to consistently use the same exchange?

Let's discuss!

Multiple exchanges mean multiple accounts with multiple passwords that make you vulnerable to attack. You also have to submit KYC documents almost on each of them. For me, it isn't worth the headache, I don't even get any benefit. I prefer to use Binance or local exchange. I prefer Binance because it offers me many altcoins but I use local exchange also because I know that it's owned by a local bank, I know people who work there and I know that if something goes wrong, I can at least do something about it. What can I do if Binance gets hacked? Fly in Dubai? America?
Buy a hardware wallet that supports altcoins, use one or max two exchanges and relax.

Assface16678

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Well, it's better to use the same exchange, an exchange that is trusted and safe, because it's better than using other exchanges that you are not familiar with. For example, Binance is the exchange that I always use. I use some other exchanges, but my first choice is Binance because it is the exchange that I first used, and I like how beginner-friendly and user-friendly Binance is. I'm not promoting Binance; it's just that over time they keep on adding useful features, and it's great how Binance has grown over time. So for me, Binance is the safe and secure exchange to use, and I would be comfortable using that exchange every time I need to do transactions. And you can do many things in Binance, like P2P, trading, futures, and many more, so it will be a good fit for an investor because you can do a lot of things inside this exchange so you don't need to use other exchanges.

Zanab247

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I prefer using the exchange that is very easy and safe for my transaction, and it will continue be my exchange, I will be using to transact any coins because I trust their service and the team behind the exchange.

Many people has lost their money in some exchanges platform, because they thought the exchange platform charges is too high, but they discovered that the first exchange platform is the best and is well secure for any kind of crypto transaction and their charges is very low to their customers

I will consistently using the exchange, but if I discover that the team behind the exchange has changed hand negatively, I will change to another exchange that is secure and safe.

peter0425

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Quote from: Cryptomultiplier on June 02, 2024, 11:21:32 AM

So, why do prefer to consistently use the same exchange?

People tend to just use one exchange for their transactions because of convenience. There’s less fees to pay for and less space in your device too. But I have heard some people use multiple exchanges because they trade in different arenas. There’s some who do swing trading while some hold for the long term.

Nowadays exchanges have become more sophisticated and advanced that it already offer a lot of things related to trading. It has tools that can be used to help one analyze a market. While some argue that you shouldn’t put all your eggs into one basket, this just entails that you should store your holdings in a wallet and only have what you want to trade in an exchange.

Iroh

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I think most people, when they get familiar then comfortable with one option would find it difficult to explore other options. Probably having thoughts like “why risk anything and try other alternatives when the one you're currently using is working fine”. I think being familiar and comfortable which in turn brings about a sense of “safety” makes people prefer to consistently use the same exchange over time mostly ignoring other and sometimes better options out there.

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Quote from: Davidvictorson on June 02, 2024, 12:20:45 PM

Quote from: Adbitco on June 02, 2024, 11:36:17 AM

To me I don't really consider all this listed above the most important thing to do is to monitor and build your trust from that particular exchange even as we know that using one particular exchange is risky but provided they are trusted and have all the trading pair you required then no need jumping from exchange to exchange most at times we can have difficulty with passing kyc and other important things that could be needed by the exchange.

You are right.

When I saw IRS and tax returns in the OP, I was like this isn't relatable. In my country, we don't do tax returns on crypto not when the government is anti crypto.

The reason why I keep using the same exchange or why I will.is because in addition to having the trading pair that I require, the have a P2P exchange market place that gives a fair value of exchange to my fait whenever I want to trade better than the others out there.

Same here. I am also taking p2p into consideration since we are not required to undergo tax returns here in my country and it's not that mandatory but it depends if you are going to declare it to the agency especially if you are earning beyond taxable income per annum. Second reason is that I need to familiarize the exchange as we all know they do have differences from fees, features, and other stuff.

maydna

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Before you choose the exchange, you needs to compare each exchanges to find what you wants. You can not choose an exchange because of other people suggestion so you can trade with comfortably. Selecting the exchanges needs much consideration, including KYC because not all exchange gives you good experience. If that exchanges is trustable, you will not have a problem in the future and you will feels comfortable to use the exchange. For the other matters, you will adapt to the current situation but if the exchange change their regulation, you will needs to search for the other exchanges. We use the exchange to make a profit and don't wants to have a problem so we must search the exchange that we wants by research. We don't have to use many exchange to control our funds because that will consume more time to manage our portfolio.

jrrsparkles

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Using one exchange for tax purposes doesn't make sense to me because if you had used and made profits or 100K via a single exchange or multiple exchanges will not have bring any difference in the amount we pay in taxes if we were ready to pay the taxes.

So the reason is convenience and for some they bother about giving their sensitive KYC information to multiple exchanges if their trading volume is high and it's just common that once we find a platform where everything that suits us from trading experience, fee structure or anything then I don't see reasons to jump on new exchange.

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Quote from: Cryptomultiplier on June 02, 2024, 11:21:32 AM

So, why do prefer to consistently use the same exchange?

Let's discuss!

I've got accounts on a few crypto exchanges, but I usually just use one main one. Sometimes I'll check out another exchange if they have a coin my main one doesn't, but for my everyday buying, selling, and cashing out, I stick with my usual exchange. It's just easier to keep track of everything that way. I'm not too stressed about it going bankrupt because I keep most of my crypto in my own wallet, not on the exchange itself. And since I'm not really into Crypto arbitrage trading, I don't need to use multiple exchanges all the time.

Jegileman

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Quote from: Cryptomultiplier on June 02, 2024, 11:21:32 AM

One of the reasons why I think it's best to consistently use the same exchange, is for valuation purposes to maintain consistency, it is so as to determine the fair market value of a cryptocurrency is for during tax preparation. It's how the IRS wants cryptocurrency transactions to be reported on tax returns.

I have never looked into that when thinking of the exchange I want to use. I have about five exchanges that im registered to and also done KYC on them to trade coins on. The reason for having so much is to access some coins that are not on others and to simply receive funds from others that are on same exchange through internal transfers. The idea you’re pitching here is a valid one, and the IRS will not look into that aspect of you owning all when it comes to collecting tax for using them. I don’t really bother about this because I’m not tax for using any of those exchanges, I only pay trading fees to the exchange during transactions and that’s it for that.

kentrolla

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When it comes to managing exchanges the only thing matters to me is convenient because it's difficult to manage our trading, calculation about the PnL when we use multiple exchange hence I maintain all at one place and more importantly the hassle of managing different passwords. But I use multiple exchange to track the price or sometimes but some coins earlier in exchanges like gate.io.

Cryptoprincess101

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Quote from: Adbitco on June 02, 2024, 11:36:17 AM

To me I don't really consider all this listed above the most important thing to do is to monitor and build your trust from that particular exchange even as we know that using one particular exchange is risky but provided they are trusted and have all the trading pair you required then no need jumping from exchange to exchange most at times we can have difficulty with passing kyc and other important things that could be needed by the exchange.

I feel using different exchanges is also advisable because we should not forget the fact that no matter how reputable an exchange is, they can be compromised and hacked or they can crash so far as they are centralized. We need to learn alternativity, so that if some unforseen circumstances erupt in the future, we will not be totally consumed and we can have where to fall back to. Whatever exchange platform that involves a third party can not be completely trusted no matter how you have built trust with them for long, some exchanges can build good reputation for years and tarnish them within a blink of an eye. Let us not forget crypto exchange FTX collapsed in 2022 after they built good reputation.

woez

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Quote from: btc78 on June 03, 2024, 03:32:56 PM

There is just one simple answer to this, really.

If it isn’t broken, don’t fix it! There’s lots of exchanges out there and if you find one that works perfectly fine for you then just stick to that and do not risk using others that may compromise your entire crypto experience. It is also to avoid further confusion and complications.

The safest and easiest way is to use an exchange that has been licensed locally. If there is a problem with our investment, we can confirm it online first and if there is no meeting point, we can come to the official office with all the requested requirements. They will help you solve it quickly.

beerlover

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Quote from: Cryptomultiplier on June 03, 2024, 07:01:59 AM

I have noticed same thing also as regards giving better promotional offers to newbies and the oldie are then left to either join the community and participate with their funds to gain or have to adapt to the fees that may soon increase without much price explanation.

I think also when exchanges delist trading pairs from their services, it contributes to why people will seek other exchanges for what they need and this surely adds up to the confusion mostly experienced, that results in the inconsistency of using a particular exchange too.

I feel like there is a good reason because people do not have a reason to leave, that is the reason to stay. When you delist something I understand the situation, and there is nothing wrong with that, I think it's quite obvious that we end up seeing it like that.

I do not mean to say that we are going to end up with something that changes, we should probably consider how to grow bigger and better, we need to just adjust and do that. Of course that is not going to be all that easy, we need to just make it work one way or another. I believe that we are going to end up with something much better. Think about it this way, it is going to be a good situation and we can definitely make it work, we just need to be happy with what we have.

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Quote from: Cryptomultiplier on June 02, 2024, 11:21:32 AM

So, why do prefer to consistently use the same exchange?

Well there are loyalty benefits offered by the exchange itself when you have used theirs consistently over time. You may receive some disconted fees or even an exclusive offer that could only be accessed if you are a regular customer of theirs. While this may not seem much but I greatly value this and they could really make a difference when making transactions. Besides it’s more secure to just trust one exchange in my opinion

btc78

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There is just one simple answer to this, really.

If it isn’t broken, don’t fix it! There’s lots of exchanges out there and if you find one that works perfectly fine for you then just stick to that and do not risk using others that may compromise your entire crypto experience. It is also to avoid further confusion and complications.

Fortify

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Quote from: Cryptomultiplier on June 02, 2024, 11:21:32 AM

One of the reasons why I think it's best to consistently use the same exchange, is for valuation purposes to maintain consistency, it is so as to determine the fair market value of a cryptocurrency is for during tax preparation. It's how the IRS wants cryptocurrency transactions to be reported on tax returns.

Quote

While "fair value" and "fair market value" are similar, they aren't the same;

Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a particular date.

Fair market value is usually used when evaluating assets and liabilities for tax purposes. It is the price that any property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the releva facts.

The IRS' guidance on this also states that if any crypto is not traded on any exchange, but maybe it was trades pair to pair, P2P, or received as income, the fair market value is whatever the crypto was worth on the date it was received.

https://www.bitwave.io/blog/how-to-determine-crypto-fair-market-value

So, why do prefer to consistently use the same exchange?

Let's discuss!

It depends how much money you're sending through exchanges on a regular basis really. If you're moving larger amounts then it is probably wise to stick with the same exchange, because each time you go to a new one you open up the possibility that you mis-understand how the trade works or end up paying larger than expected fees. You can also get a feel for how secure the platform is or whether it encounters regular downtime, which might signal that you should move on as it can be less safe. You should probably separate good bookkeeping skills from the platform you use, because it is fairly easy to record all the necessary stats if you are doing a low amount of transaction activity.

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Quote from: sunsilk on June 02, 2024, 05:47:58 PM

Using the same exchange all over again is because mainly of convenience and it covers all, convenient in pairs, fees, service and support.

There could be other stuff that I have missed to say but that's the reason why we are mainly using the same exchange at all times.

If taxation and IRS is the priority of this thread, I think that only comes secondary or even not really have been thought at all by most of us.

If it has all the features you mentioned, then yeah, why will we need to jump on the other right? it's only hassle. While, if it doesn't have it, there is also no reason to stick on it and be stay miserable when in fact there are plenty of good choices out there to pick from.

We must not be afraid to try something new, because I'm sure there are also people who are like this. It is like a kind of phobia. Tax on the other hand is actually important before anything else because we can get in serious trouble if we neglect it. I think many of us are not dumb enough to know it but we only pretend to not mind it because in our head it's only an added expense and can only stress us throughout the day.

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Quote from: Cryptomultiplier on June 02, 2024, 11:21:32 AM

One of the reasons why I think it's best to consistently use the same exchange, is for valuation purposes to maintain consistency, it is so as to determine the fair market value of a cryptocurrency is for during tax preparation. It's how the IRS wants cryptocurrency transactions to be reported on tax returns.

Quote

While "fair value" and "fair market value" are similar, they aren't the same;

Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a particular date.

Fair market value is usually used when evaluating assets and liabilities for tax purposes. It is the price that any property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the releva facts.

The IRS' guidance on this also states that if any crypto is not traded on any exchange, but maybe it was trades pair to pair, P2P, or received as income, the fair market value is whatever the crypto was worth on the date it was received.

https://www.bitwave.io/blog/how-to-determine-crypto-fair-market-value

So, why do prefer to consistently use the same exchange?

Let's discuss!

Correct me if I'm wrong, but doesn't this mean nothing? I mean, we can use our favorite exchanges for all we want to promote this fair market value you're talking about, but if there is arbitrage in between exchanges, no matter how small, doesn't it mean that fair market value is still not achieved, given the fact that two exchanges are clashing against what they think is the real value of the coin in question? I mean the only way this could really be achieved is if every single crypto user chooses a single exchange among a vast plethora of others in the market, and honestly if that were to be the case I might quit crypto for good.

And honestly speaking, the only reason why I use the same exchange for the past 8 years now is only because I got myself pretty familiarized with the UI and the way things work with this exchange, I have been able to build trust with this crypto exchange for years on end and I have yet to be disappointed by Binance, security, ease of access, and in every other facet of service that they could provide. So yeah, besides DEX that I am obliged to use every now and again I will always stand by Binance.

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One reason to use same exchange consistently may be to avoid headache for doing the same kyc verification process again and again with other exchanges. I don't see any other reason or benefits to use same exchange consistently. We may not find our desired trading pairs or tokens in just one exchange forcing us to use another one.

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