February 13, 2022

Do you want to buy or sell cryptocurrencies but don’t know where and how to do it?

Cryptocurrencies are revolutionizing the market and the way we understand the internet, a virtual space where every day there are more ways to invest and also many ways to earn money from home.

The expansion of cryptocurrencies does not seem to be a passing fad but something that is here to stay and grow more and more.

This new phenomenon has democratized, so to speak, investments. Until a few years ago, investing in stocks on the Internet seemed like something only for great personalities of finance, geniuses of negotiation and complex mathematics. That reality has changed drastically.

We can safely say that retailers are becoming more and more significant in the stock market ecosystem and also in the world of cryptocurrency investments. This is good news!

The landscape has changed radically and has made a 180-degree turn. Today with the right intuition and minimal training, anyone can embark on a path of successful investments in the fascinating world of cryptocurrencies. Nothing and no one can ensure absolute success, but being informed and knowing the context of today’s investments can be a good way to obtain good results.

For investors who are starting out, which are many, finding the right platform where to buy cryptocurrencies or sell them is essential for the success of their investments and obtaining good results, which is what we all expect when we invest our money.

Differences between a broker and an exchange

Every day more and more people are looking to invest in cryptocurrencies. One of the most frequently asked questions by those who intend to invest in cryptocurrencies is: should I choose a crypto broker or an exchange? This is a much more common question than you might imagine and it doesn’t have a simple answer.

There are many ways to trade cryptocurrencies, brokers and exchanges are the two main ones and the reason for doubt of many people investing for the first time.

Before we are going to offer good advice: Before making any investment movement in cryptocurrencies it is advisable to do it in a platform that is regulated and verified. Regulation and verification bring confidence and security, they are the guarantee that you will perform in a safe environment.

Let’s get down to business. A cryptocurrency exchange allows users to buy and sell cryptocurrencies, it’s as simple as that. In reality, exchange platforms function as intermediaries between sellers and buyers of cryptoassets. These exchanges also allow cryptocurrencies to be exchanged for conventional fiat currencies. On each transaction, the exchange charges a commission, as is logical.

Crypto brokers are also intermediaries in the process of buying and selling cryptocurrencies, a function they share with exchanges. The fundamental difference lies in the fact that the broker owns cryptocurrencies and sells them with commissions and prices it considers profitable. If a user wishes to sell cryptocurrencies to a broker, the broker will set the price it is willing to pay.

In addition to this function of buying and selling cryptocurrencies directly, the traditional broker also fulfills the mission of advising the investor, so that the investment is executed safely.

It is obvious that for the broker, the greater the difference between the buying and selling price, the more profit he can make. On the other hand, on traditional exchange sites, users can always know what the fair prices are, as determined by the exchange market.

Arbitrage is one of the features that exchanges offer that cryptocurrency brokers cannot. What is arbitrage? It means that a user can sell and buy simultaneously in two different markets, benefiting from alleged price differences.

Now that you know a little more about the differences between brokers and exchanges, you will surely be able to make better investment decisions in crypto assets.

About the author 

Peter Hatch

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