Why is trading cryptocurrency with a broker better than trading cryptocurrency on an exchange?

The cryptocurrency space is currently extremely popular. News that Bitcoin (or another digital currency) has reached another milestone comes not only from the Internet. Even television program hosts report this.

And the desire of traders who already have some understanding of the foreign exchange markets to join this type of earnings is understandable.

After all, in fact, trading cryptocurrency using an algorithm is not very different from, for example, Eurobucks or oil.

And at the same time, the question logically arises: where to trade cryptocurrencies?

Will we remain regular and loyal clients of brokerage companies or will we still turn our attention to specialized exchanges specifically created for trading digital money?

Exchanges or brokers: which is better for trading cryptocurrencies?

To begin with, we will try to give an objective assessment of such trading through Forex brokers.

It would seem that everything is simple here. Yes, you don’t even need to get used to the new platform (you still have the same MT4 at your disposal), but there are some differences.

Advantages of brokers:

• You do not need to create a separate wallet to store cryptocurrency.

Just do what you did before: analyze the charts. You also do not need additional study of technical literature related specifically to electronic money;

• In one platform you can trade both regular currency pairs and crypto, if the need arises;

• Due to the fact that Forex brokers have introduced the use of leverage, you will have access to trading with a minimum starting capital.

• Naturally, the issue of trust also plays an important role. If you have been trading for years, for example, with the broker AMarkets , and have never encountered problems regarding either the interaction process itself or the withdrawal of earned funds, then what is the point in moving to another platform with a mechanism that is not always clear.

Well, for an objective assessment, it is still worth mentioning the disadvantages of trading through a regular broker:

• Trading costs are slightly increased compared to direct trading through the exchange.

Don't forget about the spread. • Some traders have doubts about the origin of quotes, which sometimes differ from those offered directly by the exchange.

• And, of course, many cryptocurrency lovers are unhappy with the fact that some brokers do not trade on weekends.

Crypto exchanges: how are things going in this area?

Initially, cryptocurrencies were created to make it possible to conduct large-scale financial transactions in a digital format.

In other words, remove capital from the sight of the state.

It would seem that this is an obvious plus for both individuals and legal entities. But from this main advantage, the main disadvantage almost immediately followed. Naturally, any crypto exchanges are unregulated organizations that are in the hands of private individuals.

Accordingly, financial transactions carried out through them do not have legislative support, which leads to the danger of sudden bankruptcy or scam of any exchange (popularly called “scam”). And this very “scam” can happen quite often.

In theory, everything seems to be fine: the crypto exchange has a stable income from customer transactions. But the exchange has been promoted, and the turnover of funds amounts to millions. Is it really possible that in this case the management of the exchange (remember, these are private individuals) will not be greedy?

And then the standard scenario plays out: sad news comes out about the seizure of accounts, hacking of wallets, etc.

and so on. The exchange declares itself bankrupt, and all capital under gray schemes is transferred to “left” accounts. At this point, clients can only bite their elbows. After all, they understand perfectly well that now no one will return their money, and they will not be able to hold anyone accountable.

The choice is yours, but it is obvious!

And now you are at a crossroads: trade through a broker, which has several minor drawbacks, or still entrust your capital to a crypto exchange, which often does not even have a legal address.

If you prefer the second option, then be prepared to take big risks: the safety of your money depends not only on correct analysis, but also on the honesty of the exchange management.

We think that it is better to rest on the weekend due to the lack of quotes and put up with a slight spread.