Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance. Cryptocurrency exchanges are often hacked, which can lead to the loss of customer funds. For example, in 2016, the crypto exchange Bitfinex was hacked and $72 million worth of Bitcoin was stolen from customers.

While you won’t pay commissions on crypto trades (or stocks and ETFs), Webull does charge a spread markup of 100 basis points (1 percent of the price) on either side of a trade. Several cryptocurrencies are available for trading, including Bitcoin, Ethereum and Cardano. Charting tools and an impressive mobile app make Webull a broker worth considering. Cryptocurrency exchanges make money in a handful of different ways. Kraken  is one of the oldest U.S. crypto exchanges, founded in 2011 during crypto’s Paleolithic era. This platform offers a solid range of coins with very competitive trading fees.

Trading cryptocurrency: Differences between brokers and exchanges

Be sure to check your chosen crypto exchange’s requirements for the coin you want to buy. If you make purchases using a credit card or debit card, you may be charged a premium by both the exchange and your card issuer. If you like the convenience of a centralized exchange, you can reduce your risk by transferring crypto to a separate, off-exchange hot or cold wallet. The platform is headquartered in Seychelles, with a growing number of users in Asia, Europe, the Middle East and Africa. While U.S. users can access and use the trading platform, KuCoin is not licensed in the U.S.

But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. To open a crypto exchange account, visit the exchange’s website or download its app. Finally, don’t assume that an exchange is available in your country, or even state, just because you can access its website.

Using a cryptocurrency broker

Beginners can benefit from the relative ease of buying and selling cryptocurrencies on Crypto.com, although it charges slightly steeper fees than some competitors. The Crypto.com DeFi wallet allows users to store their crypto and earn rewards on their assets. SoFi offers low fees and some 20 cryptocurrencies, but no crypto-to-crypto trades nor the ability to transfer crypto assets off their platform.

Our list considers crypto exchanges, platforms and online brokers that offer crypto, as well as cash and payment apps that let you buy and sell Bitcoin, Ethereum and other digital assets. As such, you cannot deposit USD or EUR on Binance, and must use cryptocurrencies instead, which means you have to buy some crypto first before that. There are many ways to buy digital currencies out there, but such transactions are often paired with high fees and commissions.

Crypto Exchanges vs Brokers

They can be based on the size of the transaction or your level of trading activity. It’s important to research and be aware of exchange fees when you are ready to buy and sell crypto in this way. If you’re looking for obscure altcoins to trade, you may want to look elsewhere, although Coinbase is considered to be excellent about security, user experience, and other trading considerations. Make sure you’re keeping in mind how your crypto exchange vs trading platform own investment practices will relate to the features (and limitations) of any exchange you might use. Exchange services are equally relevant for clients who need to invest physically in cryptocurrencies (i.e., directly own assets) and hold long positions. Brokers’ services are also suitable for those clients who are engaged in short and medium-term margin trading to benefit from fluctuations in the price of cryptocurrencies.

• Once you have the trading basics down, you can start researching the exchange that is right for you.
• If you explore what to prefer between cryptocurrency exchange vs broker, each variant has its strengths and weaknesses, and there is no universal answer.
• NerdWallet’s comprehensive review process evaluates and ranks platforms and companies that allow U.S. customers to buy and/or sell cryptocurrency.
• When you make deposits, they can be made via fiat or cryptocurrency.
• Be sure to take the time to research your options and make the best choice for yourself.
• Using cryptocurrency exchange is a traditional way to trade crypto and especially useful for lower amounts of money.
• Robinhood brings its no-fee ethos to cryptocurrency trading, but currently offers few cryptocurrencies and no way to transfer crypto assets off the platform.

In the same way as traditional brokers, cryptocurrency brokers act as a conduit between traders and the cryptocurrency market, facilitating the purchase and sale of cryptocurrencies. Sometimes, cryptocurrency brokers provide traders with derivative products, thereby allowing them to engage in trading contracts on the value of cryptocurrency. https://www.xcritical.com/ Though some stock brokers also offer crypto exchanges, crypto trading is not subject to the same investor protections you get when working with traditional investments. Securities Investor Protection Corp. insurance doesn’t apply to cryptocurrency, so if your exchange fails (as FTX did in the fall of 2022), you could lose your investment.

most popular types of cryptocurrency

Instead of directly trading Bitcoin, altcoins, or any other crypto asset, contracts for difference are used instead. Contracts for difference, also known as CFDs, are agreements between a buyer and a seller over a difference in the valuation of a particular asset. The difference in the value of the underlying asset at the time of contract completion and the time of trade finalization is the subject of the contract. Centralised exchanges are also inherently vulnerable to single points of failure – making them easier to be hacked or disrupted.