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Types of Cryptocurrency Exchanges You Should Know As a Crypto Newbie

As the cryptocurrency world continues to witness an increasing rate of growth, so does numerous cryptocurrency exchanges are available to users nowadays. In this article, we would be looking at some of the types of cryptocurrency exchanges that are made available out there.

Cryptocurrency exchanges are web-based platforms that permit the exchange of fiat money for cryptocurrencies or another form of cryptocurrencies. Basically, there are four types of cryptocurrency exchanges which are cryptocurrency exchange, brokers, direct trading and cryptocurrency funds.

Cryptocurrency Exchanges

These exchanges are quite similar to the stock exchanges in the sense that buyers and seller trade according to the current market rate of cryptocurrencies. Also, the exchange often acts as an intermediary and charge a certain fee for every transaction. Furthermore, it is good to note that some of these exchanges deal only in cryptocurrency while others allow its users to trade fiat currencies for cryptocurrencies.

Cryptocurrency Brokers

These are exchanges that operate on a website and allow buyers and sellers to trade cryptocurrencies at a rate determined by the broker. In this case, the exchange is between the individual who wants to buy, the seller and broker.

Direct Trading Platforms

Direct trading platforms offer direct peer-to-peer trading between buyers and sellers. on this platform, there isn’t any fixed exchange rate. Sellers offer their own exchange rate while buyers either search for buyers through the platform or state the rate at which they are willing to buy for, the platform would look for sellers offering the same rate and trade takes place.

Cryptocurrency Funds

Basically, these are collections of professionally managed cryptocurrency asset that permit the public to buy cryptocurrencies through the fund. After which buyers can go ahead to invest and trade such cryptocurrencies. A typical example is ETCG.

Do you find this article helpful? In the comments below, let us know what type of exchange you prefer and why.

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