Where is it more profitable to trade cryptocurrency, an exchange or a broker?
Over the past few years, cryptocurrency has become one of the most popular assets among traders who make money from changes in its exchange rate.
The trading strategy has also changed significantly recently; now few people only buy and hold until the price rises; most players make short-term transactions.
A large number of transactions places high demands on the place where you trade, sometimes the amount of profit received depends on this.
Currently, you can exchange cryptocurrency on a crypto exchange, through an exchange broker, and directly in your wallet.
Who is more profitable: cryptocurrency exchange or stock broker?
Let's compare the main criteria that are usually taken into account when choosing a trading platform for making money on cryptocurrencies.
Security stockbrokers with bankruptcy insurance definitely win here ; in the event of bankruptcy, their clients receive compensation in the amount of 20,000 euros.
Cryptocurrency exchanges practically do not insure their risks and in case of trouble, their clients have to rely only on a miracle and the speed of their reaction when withdrawing money.
Deposit options – in order to trade crypto, you first need to top up your account.
If we talk about crypto exchanges, then the options here are very bad; usually you can top up your account only through a bank transfer, using a bank card and sometimes PayPal . In this case, the commission ranges from 1 to 4 percent, both for replenishment and withdrawal
Stock brokers have a much wider choice, usually a dozen different options, while commissions for deposits and withdrawals may be completely absent:
In addition to traditional bank cards, there are various payment systems.
Trading commissions – that is, how much you pay when opening a trade to buy or sell cryptocurrency.
Exchanges - The size of the commission for opening and closing transactions on a crypto exchange depends on a lot of indicators, the most important of which are trading volumes and execution option:
At the same time, the size of the commission for margin trading can range from 0.025 to 0.1 percent per transaction.
Brokers charge a commission only when opening a transaction; the size of the spread directly depends on the type of account and the liquidity of the asset:
Depending on the broker and account, the commission for opening a transaction is, on average, $14 per bitcoin.
It is quite easy to calculate that as a percentage the indicator will be equal to 14 / 51600 x 100% = 0,027%
Difficulty of trading - perhaps it is a force of habit, but I find it quite difficult to understand the options for opening trades that crypto exchanges offer.
With brokers, everything is much simpler, and you can always contact the support service for clarification.
The number of assets is where exchanges definitely win; the most advanced broker has no more than 50 cryptocurrency pairs.
While on exchanges you can open transactions on thousands of different assets, and new assets often appear on exchanges.
Support is much better with brokers; you don’t have to wait for a response from the exchange at all, but in a brokerage company a manager is assigned to you who responds quite quickly.
An individual manager will also help you with training in the technical aspects of the trading platform.
Which crypto exchange or cryptocurrency broker should you choose?
Each option has its own advantages and disadvantages, it all depends on your trading experience and the strategy you are going to use.
For beginners, I would definitely recommend cryptocurrency brokers; this option is also suitable for those who want to engage in cryptocurrency scalping , since these companies provide high leverage. And our commission size is no more than on crypto exchanges.
Recommended cryptocurrency brokers - https://time-forex.com/kriptovaluty/brokery-kriptovalut
If you want to make money on new cryptocurrencies and your trading is more reminiscent of investments than speculative trading, the choice is clear: crypto exchanges.
Since only there you can buy not the most liquid cryptocurrencies and try to make money in the hope of their growth.