Jan 6, 2018
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Crypto Exchange: The Concept and Types

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What is a Crypto Exchange?

Crypto Exchange is a kind of online platform, which allows to buy, sell and convert currencies such as bitcoin and etherium. There are several types of exchanges, depending on the kind of cryptocurrency and the possibility of exchanging cryptocurrency for fiscal money (for example, dollars or euros).

In connection with rising in the price of cryptocurrencies, more and more people want to possess this wealth. And those who already own one of the types of cryptocurrency, want to multiply their savings and avoid scammers. In this article, we will analyze the concept of crypto exchanges and their types, and you already understand which one is most suitable for you.

Exchanges are places of accumulation of financial traders, the volume of trading on which already exceeds billions of US dollars. Stock exchange of retail crypto traders is one of the most common, and sometimes the only place of purchase/sale of cryptocurrency. Here, traders can trade money most conveniently and safely for themselves. Let’s get acquainted with one of the most reliable exchanges that will suit the merchants of crypto-currencies.

Crypto Exchange Explained

1. Trading platforms

Trading platforms are the most common type of Crypto Exchange: Bittrex, Bitstamp, and Bitfinex belong to this type. These platforms earn commissions from each transaction, and it depends on the kind of trade and amount.

2. Brokerage platforms

Brokerage platforms cryptocurrency is selling cryptocurrency at the price of individual brokers. Often this is the market price of a particular currency plus a premium. The Coinbase application unites the world’s largest bitcoins brokers.

3. Direct trading Crypto Exchanges

With the help of direct trading exchanges, holders of cryptocurrency can directly exchange it. Users participate in the trading process on their terms. And as a result of trades, each of the users is assigned a rating that affects its reputation and success in subsequent transactions. There are no intermediaries on such exchanges, which means that there is no additional fee. However, there is a risk, since these transactions are based solely on trust.

4. Hedge funds

Hedge funds based on the Cryptocurrency are entirely a new phenomenon in the world of cryptocurrency. Because hedge funds are managed by professionals and consist of a lot of digital assets, they are the safest way to invest in cryptocurrency.

Some hedge funds have a reasonably high barrier to entry, but investors can use such services as Iconomi’s digital assets to create their cryptocurrency funds. One of the most popular hedge funds belongs to Pantera Capital.
Demand for cryptocurrency is continuously growing, which means that the number of crypto exchanges is also increasing. And only you choose, use the services of intermediaries or trade yourself.

Make informed decisions that depend on your knowledge and experience in the market. In the next article, you can find the principles to follow when choosing the most appropriate exchange cryptocurrency and avoid fraud. Good luck with bidding!

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Currencies · Investing

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