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

The cryptocurrency space is incredibly popular right now. News of Bitcoin (or another digital currency) reaching another milestone isn't just coming from the internet. Even TV hosts are reporting it.

It's understandable that traders who already have some understanding of the currency markets would like to explore this type of income.

After all, algorithmic cryptocurrency trading isn't much different from, say, trading the Eurobuck or oil.

So, the logical question arises: where to trade cryptocurrency?

Should we remain loyal and loyal clients of brokerage firms, or should we turn our attention to specialized exchanges created specifically for trading digital currencies?

Exchanges or Brokers: Which is Better for Trading Cryptocurrencies?

Let's start by giving an objective assessment of this type of trading through Forex brokers. It would seem simple.

You don't even need to get used to a new platform (you still have 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 will also not need to study additional technical literature related specifically to electronic money;

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

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

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

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

• Trading costs increase slightly compared to direct trading through the exchange. Do not forget about the presence of a 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 enthusiasts are unhappy with the fact that some brokers do not offer trading on weekends.

Cryptocurrency exchanges: how are things going in this area?

Cryptocurrencies were originally created to make it possible to conduct large-scale financial transactions in a digital format.

In other words, keeping capital out of the state's sight. This would seem to be an obvious advantage for both individuals and legal entities. However, this primary advantage almost immediately leads to its primary drawback.

Naturally, all crypto exchanges are unregulated organizations, owned by private individuals. Consequently, financial transactions conducted through them lack legal backing, which leads to the risk of sudden bankruptcy or scams (commonly known as "scams").

And these "scams" can happen quite often. In theory, everything seems fine: the crypto exchange earns a stable income from client transactions. But the exchange is already well-established, and its turnover amounts to millions.

Surely, in this case, the exchange's management (remember, these are private individuals) won't be driven by greed?

Then the standard scenario plays out: sad news about accounts being frozen, wallets being hacked, and so on. The exchange declares bankruptcy, and all capital is transferred to shady accounts through shady schemes.

At this point, clients are left kicking themselves. After all, they know full well that no one will return their money, and they won't be able to hold anyone accountable.

The choice is yours, but it is obvious!

Now you're at a crossroads: trade through a broker with a few minor flaws, or entrust your capital to a crypto exchange, which often doesn't even have a legal address.

If you choose the latter, be prepared to take significant risks: the safety of your funds depends not only on proper analysis but also on the integrity of the exchange's management.

We think it's better to take a break on the weekend due to the lack of quotes and accept a small spread.