C r y p t o c u r r e n c y Tr a d i n g : BUSINESS
LegacyFX Introduction
A BROKER AND AN EXCHANGE
CRYPTOCURRENCY TRADING: THE DIFFERENCE BETWEEN A BROKER AND AN EXCHANGE Exchanges and brokers are two ways through which digital currencies can be acquired. Each operates in a different way and the prices of the currencies being traded are determined based on different factors.
Exchanges In an exchange, currencies are bought and sold by multiple buyers and sellers, often placing offers simultaneously. The price of each cryptocurrency being traded is therefore affected by supply and demand. Buyers can agree to purchase at almost any price, but when demand outweighs supply, buyers are more likely to agree to a higher purchase price.
Brokers Cryptocurrency brokers hold a stock of cryptocurrencies, either individually or as part of a ne-
In an exchange, currencies are bought and sold by multiple buyers and sellers, often placing offers simultaneously.
twork. They can therefore set the price they are willing to sell at but will usually keep prices similar to the rest of the market to ensure demand for their services.
Decentralised Exchanges Decentralised exchanges are a new addition to the cryptocurrency market, using smart contracts to set the rules of an exchange rather than a central governing authority.
Cryptocurrency brokers hold a stock of cryptocurrencies, either individually or as part of a network.
You can learn more about trading cryptocurrencies directly and through derivatives by visiting the LegacyFX blog.