In order to start buying and selling cryptocurrencies and other digital assets, the most common way is to transact with Crypto Exchanges. Cryptocurrency exchanges in Canada are privatelyowned platforms that facilitate the trading of cryptocurrencies for other crypto assets, including digital and fiat currencies and NFTs.
Centralized cryptocurrency exchanges act as an intermediary between a buyer and a seller and make money through commissions and transaction fees. You can imagine a CEX to be similar to a stock exchange but for digital assets. Popular Crypto Exchanges
Much like stock trading websites or apps, these exchanges
cryptocurrency investors
and sell digital assets at the prevailing price, called spot, or to leave orders that get executed when the asset gets to the investor`s desired price target, called limit orders.
allow
to buy
CEXs operate using an order book system, which means that buy and sell orders are listed and sorted by the intended buy or sell price. The matching engine of the exchange then matches buyers and sellers based on the best executable price given the desired lot size. Therefore, the price of a digital asset depends on the supply and demand of that asset and other assets.
Since the CEX determines which digital assets can be traded, it provides some comfort that unscrupulous digital assets can be excluded from the CEX.
A decentralized exchange is another type of exchange that allows peer-to-peer transactions to be conducted directly from a digital wallet without going through intermediaries. Examples of DEXs include Uniswap, PancakeSwap, dYdX, and Kyber.
These decentralized exchanges rely on smart contracts, which are self-executing codes on the blockchain. These smart contracts allow for more privacy and less slippage than a centralized cryptocurrency exchange.
On the other hand, even though smart contracts are rules-based, the lack of an intermediary third party means that the user is left to their own devices, so DEXs are meant for sophisticated investors.
One of the perks of trading cryptocurrency is that you can buy it whenever you want. But many investors buy and sell cryptocurrencies during the same hours that the New York Stock Exchange (“NYSE”) is open. But since you can buy and sell crypto at all hours of the day, you`ll need to know which hours are better for buying cryptocurrency. If you analyze several months of data, you will start to notice daily trends.
Focusing on cryptocurrencies with high market caps such as Bitcoin, Ethereum, and Solana can help new investors identify the best times of the day to trade, as crypto prices tend to rise and fall simultaneously.