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Where trade kryptos? Exchange vs Broker

by | 14 May 2020

There are basically two different ways of trading crypto currencies.

You can either trade via an exchange or via a broker for crypto currencies.

A broker is used to participate in the price movements of certain assets without actually owning them. The broker needs money as a security deposit on the user’s account, gives him a trading power and executes orders on behalf of the user. Therefore, the Broker can provide the customer with access to any financial market in the world with a single security deposit.

An exchange, on the other hand, serves to convert an asset in possession into another. The exchange acts as a third party, which brings together two willing parties and charges a certain fee for this service.


Crypto Exchange

You have to log in briefly with your e-mail address and a password. After that you have to go through the verification process. To do this, you will need to upload a colour copy of your photo ID (ID or passport) at most exchanges and make a “selfie” with your ID next to your face. Proof of address is also required. The exchanges respond to such a verification request within a few hours to a few days. Many providers now also provide verification via “live video”, which is much faster.

Crypto Broker

To deposit funds and start trading, verification of your account is required here. Usually you will need to submit scan copies of one or two documents, which are your ID and proof of address. The verification process as such is much faster than at a crypto exchange, as it is usually completed within 30 minutes.


Crypto Exchange

Depositing fiat money at crypto exchanges is often a hassle. In many cases you cannot use national currencies. You must use crypto currencies instead, which means that you must first buy crypto currencies (usually Bitcoin). There are many ways to buy digital currencies. But such transactions are often associated with high fees and commissions and are not that easy to handle.

Crypto Broker

Brokers generally accept deposits and withdrawals by credit card, debit card, PayPal, Skrill, Neteller and bank transfer. This is more accessible for most people compared to most crypto exchanges,


Crypto Exchange

Withdrawing funds from the exchange of Fiat currencies (EURO, Dollar, CHF etc.) is again a problem. Of course, you can use e-wallets and online file-sharing services, but commissions will again be charged. Withdrawals to a bank account can also be a problem, as not all banks accept money from Crypto Exchanges.

Crypto Broker

When it comes to withdrawing funds, the conditions offered by brokers are usually still much more attractive than those of a crypto exchange. Instead of 5 % or 6 %, brokers usually do not charge any withdrawal fees.


Crypto Exchange

The crypto exchange is known to be relatively insecure, as the media often report on hacker incidents. This is partly due to the lack of regulation and security, but also to human error and lack of technical know-how.

Crypto Broker

Trading crypto-currencies with a regulated broker offers customers a certain degree of security in the sense that the brokerage company cannot be a fraud. The business of a regulated broker is also strictly checked by the Financial Market Authority and the customer has the possibility to file a complaint if the broker violates the rules. Brokers keep their clients’ money in bank accounts, which serves as an additional guarantee.

The advantages of trading crypto through a broker are

– Transparent and fair practices. Technology to protect all data and secure methods for deposit/withdrawal of funds

– Better and more stable trading platforms with more features

– Brokers are highly regulated

– Clients’ funds are separated from the broker’s deposits (funds)

– Usually better customer service

– Leverage – brokers usually allow trading with leverage, i.e. a multiple of the actual position size (which in turn involves risks)

– Easier operation and handling

The downsides of trading crypto through a broker include

– With brokers you actually trade a CFD (Contract For Difference), not the crypto token itself (physically)

– Not every broker supports weekend trading. The FX, stock and futures market closes on weekends, cryptos are tradable around the clock.

– There is a swap rate (interest), which is either positive or negative

Both types of crypto trade have certain advantages and disadvantages. Therefore, it depends on the individual personal needs which variant one prefers.
No matter which one you choose – we wish you maximum success and maximum profits.


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