Cryptocurrency Exchange: All You Need To Know
If you’re new to the cryptocurrency world, the first thing that you should deal with is to do an exchange or brokerage. ForexRev offers a list of crypto exchange list based on the user ratings. Check some reliable crypto market here.
What’s An Cryptocurrency Exchange?
Cryptocurrency exchanges allow you to trade cryptocurrencies with each other. They also allow you to direct conversions of most government-backed currencies into cryptocurrency, also known as fiat exchanges. They’re online platforms in which you can trade one type of digital asset for another according to the given asset’s market value.
The highly-rated exchanges are Binance, BitBay, and KuCoin.
If you want to start trading, the first step is to purchase some cryptocurrency on the cryptocurrency exchange. You can then transfer the crypto to the address provided by the crypto exchange.
For those who have no money to trade, you can borrow from the crypto exchange. It’s important to note that there can be some leverage involved, either gain profits or losses.
How Does Crypto Exchange Work?
Crypto exchanges work the same way with regular stock exchanges. However, this type of trading uses cryptocurrency pairs instead of shares or derivatives to profit. They set the rate of coins and tokens depending on the actions of sellers and buyers.
Some crypto exchanges may offer different options and functions. Some are made for prompt crypto-fiat exchange while others are catered for traders. Crypto exchanges made for crypto-fiat exchanges allow you to purchase crypto and sell them with higher commission fees than on regular traders. Keep in mind that there may be fees charged when you withdraw money from your account.
The exchanges can be sent to your personal cryptocurrency wallet. Digital currency balances can be converted into anonymous prepaid cards while others are backed by gold and other real-world commodities.
Regulation Of Cryptocurrency Exchanges
In 2016, several cryptocurrency exchanges in the European Union acquired licenses issued by the EU Payment Services Directive. Since the adequacy of these licenses hasn’t been judicially tested, the European Council will try to impose stricter rules on exchange platforms.
In the US, online platforms must register with the US Securities and Exchange Commission as a national securities exchange. All online platforms must be neutral ad not discriminate against crypto assets.
Regulators consider several factors when deciding the neutrality of online platforms. Regulation is more likely if cryptocurrency exchange online platforms observe the following:
- Monopoly power
- Harm and market deformation
- Information insufficiency
- Unequal bargaining power
Why Trade Cryptocurrencies?
The cryptocurrency market is volatile meaning that it offers a wide range of opportunities to go short or long. However, significant volatility comes with increased risk so make sure to do your research and formulate a risk management strategy.
The best thing about the cryptocurrency market is that it’s open 24/7. Unless there are no infrastructural updates, cryptocurrency transactions can take place anytime, anywhere. Due to leveraged exposure, you can gain huge profits from a small investment.