What Is The Difference Between A Cryptocurrency Broker And A Trading Platform?
Trading cryptocurrency is a great investment choice for a lot of people, and it’s becoming more popular than ever. There are lots of new coins entering the market all the time, and if you can make good decisions about which ones will eventually skyrocket in value, you could make a lot of money.
But before you start dreaming about how to spend your profits, you need to work out how you are going to buy and sell cryptocurrencies in the first place. There are two main options here; brokers or exchanges. The problem is, people often get mixed up between these two terms and sometimes confuse them with wallets as well, which is a whole different thing.
There are pros and cons to each method of trading crypto, so it’s crucial that you understand the differences between them. So, what is the difference between a cryptocurrency exchange and a broker?
If you are familiar with trading stocks and shares, you may already have a good idea of what a broker is. A broker is normally an individual or a company that offers trading advice and trades stocks and shares on behalf of another person. So, they handle all of the actual tradings and give you advice, taking a share of the profits as payment.
A cryptocurrency broker is an online service that does basically the same thing. You don’t deal directly with individuals buying and selling crypto, you do it through the broker. You will also have access to a range of tools to help you understand more about cryptocurrencies and make better investment decisions. Check out this etoro review to get a better idea of what services are offered. The level of service you receive will depend on the broker, and so will the fees, so make sure to compare a few different options before making a decision.
Brokers are usually best for novice investors that don’t know much about crypto yet. They will guide your decisions and deal with a lot of the confusing admin side of things where trades are concerned. They are also the best option if you want to buy small amounts of cryptocurrency.
Cryptocurrency Trading Platform
If you want to cut out the middleman and trade directly with other crypto owners, you need to use a cryptocurrency trading platform. People can trade different coins for standard currency or other cryptocurrencies. The prices are based on current market values, not the prices set by the broker.
A trading platform gives you the opportunity to take advantage of the fluctuations in price and make your own trading decisions. If you can accurately predict the fluctuations and buy and sell at the right time, you can make some significant profits. When you work with a broker, they will provide all sorts of tools and advice to help you make trading decisions but with a trading platform, you’re on your own. However, you don’t have to pay the same fees that you would with a broker, which is a big bonus.
Trading platforms are better suited to experienced traders that have a clear understanding of how the markets work. Ideally, you should start out with a broker to learn the ropes and get to know the markets before attempting to trade on your own.