A Crypto Broker Vs Crypto Exchange – Which One Is Better?

Who Is a Cryptocurrency Broker?

Speaking of a crypto broker, it is actually a provisional concept, and by that, we mean a typical broker offering access to the crypto market for trading. Hence, crypto trading is not essentially a priority area for many brokers but rather a part of several instruments such as options trading, currency indices and more.

What Is a Crypto Exchange?

Unlike a crypto broker, a crypto exchange keeps crypto trading as a top priority for traders. It thus doesn’t offer its clients any additional instruments other than crypto-crypto and crypto-fiat pairs. Furthermore, crypto exchanges provide clients with a wide range of cryptocurrencies. In addition, they have a provision to transfer your cryptocurrencies to your account from e-wallets. Users can safely store and manage their cryptocurrency holdings using cryptocurrency wallets, which offer a digital solution. Read crypto wallet reviews to learn more about the features, including its services, operation, pros, cons, costs, and more. 

Crypto Brokers and Exchanges: A Detailed Comparison

• Choice Of Trading Instruments:

Firstly, crypto brokers offer indirect trading, and currency pairs such as EUR/USD, EUR/GBP, and USD/JPY form a significant share of their trading volume. Furthermore, they also provide access to the shares of big companies. However, the situation with crypto exchanges is completely different. They specialize in offering cryptocurrencies only. 

• Commission And Fees:

Most top crypto exchanges charge a fee from their clients for trading crypto. It is usually a percentage of the total trade value. On the other hand, crypto brokers make money by spreads, usually the difference between the bid and ask prices.

• Deposits And Withdrawal Methods:

Cryptocurrency brokers provide their clients with a wide range of deposit and withdrawal options such as bank wire transfers, VISA and MasterCard for debit/credit cards, as well as e-transfers via Skrill, Neteller, Perfect Money and many more. Coming to top crypto exchanges, apart from the methods mentioned above, they also have an additional method for deposit and withdrawal: a crypto wallet.

• Account Opening:

Irrespective of whether you just simply buy crypto or wish to trade crypto actively, you need to open a trading account to do so. However, there are no technical differences when it comes to the account opening process for crypto exchanges and crypto brokers. In both cases, you must register on their official website and provide personal information. After the company undergoes the verification process, you will be able to access all the features of the platform. Although you will find many brokerages and exchanges with whom verification is not mandatory, they won’t provide you with comprehensive features for a better trading experience.

• Regulation:

Major brokers you will see online are regulated by top-tier regulatory bodies that control the operations and activities of these brokers so that they don’t indulge in any unethical trading practices. It is the responsibility of the regulator to ensure the broker adheres to all the required guidelines for maintaining transparency in their business.

Unfortunately, for crypto brokers, no such regulatory bodies exist. They only register themselves as a financial organization; however, they don’t report to anybody. This means you can’t trust the crypto exchange fully because you will always have a doubt in your mind regarding their true intention. 

Which One Should You Choose?

Coming to the most common question traders have, which one is best? Well, there is no particular answer to this question. It all depends on your trading goals and requirements. However, summing up all the above points, we can say that: 

Go for a crypto exchange if you are only interested in trading cryptocurrencies, and that too at a lower fee. With a reliable crypto exchange, you can easily trade via a smartphone or laptop using a simple-to-use trading platform.

Go for a crypto broker if you want to trade a wide range of assets, including cryptocurrencies, indices, commodities, fiat money and more. A crypto broker offers more trading options than a crypto exchange.