Most of all trading operations with Bitcoin, ethereum and other Altcoins are carried out on cryptocurrency exchanges. The daily trading volume on Poloniex, Kraken, Bitfinex and other top sites amounts to hundreds of millions of dollars. At the same time, there are more and more exchangers, which, according to advertising, allow you to buy and sell cryptocurrency faster, easier and more convenient. Is it true? Is it possible to consider exchangers as a worthy alternative to cryptocurrency exchanges? How do these sites differ from each other? Where do investors get more chances to make money on cryptocurrency trading? We will describe in this article!
What is a cryptocurrency exchanger?
It is clear that the cryptocurrency exchanger is a service that allows you to exchange cryptocurrencies. You can exchange one cryptocurrency for another (for example, ETH for XRP) or for fiat money (for example, ETH for USD or vice versa).
All electronic exchangers like Obmenka.ua, Exchanger and so on work on the same principle. There are also bitcoins, ether and other altcoins in addition to fiat and electronic money.
The mechanism of the exchanger is very simple. You apply for an exchange, the system checks that you have a specified amount for the exchange and it conducts a transaction.
Obviously, technically the exchanger is completely different from a cryptocurrency exchange with its orders, quotes glasses and personal account with a bunch of sections and settings.
How does a cryptocurrency exchanger differ from a cryptocurrency exchange?
The exchange provides a platform for trade and mediates between buyers and sellers. Trading on the stock exchange, you are dealing with private owners of assets. They are the same traders as you.
The exchanger is directly involved in the trade. Trading operations are conducted not with other users, as on the exchange, but with the exchanger itself (more precisely, its owner or owners).
And the fact that if the price situation on the stock exchange depends on many players (who can swing the course of individual cryptocurrencies), then in the exchanger the price situation depends only from its owner.
But experts emphasize that the stock market is more democratic. After all, the pricing is affected by a large number of players, and not just the owner of the site.
However, the process of pricing exchangers is not so simple. The most famous sites bind their course to the exchange. Most often, specific exchanges are chosen as a guide. For example, the exchange rate for BTC Trade is tied to the current rate for BitStamp.
Despite advertising actively promoted by the exchangers about the benefits of their use, the established rate does not always play into the hands of the investor. Many experts compare cryptocurrency exchangers with cantors. Their main goal is to buy top-end assets cheaper and sell them more expensive.
This is not an exchange where you can create a limit order and make a deal when the price reaches the desired level. But this is not all the points for which the exchangers lose the exchanges.
However, all these advantages do not matter if you chose an exchanger with an unfavorable rate or even got into a fraudulent project, which is not so rare.
Experts give another tip – choose exchangers that are posted on specialized sites aggregators, on BestChange or YChanger.
These are services that in online mode display exchange rates on different exchangers. However, they collect detailed information about trading platforms, their cryptocurrency reserves and the number of currency pairs, as well as user reviews.
Exchangers that have been working on the market for a long time, have a lot of positive feedback and offer the most favorable exchange rates, automatically get into the top sites of aggregators.
At the time of this writing, the following exchanges 24PayBank, Baksman, AlphaCashier, 365Cash, 60CEK, X Pay and others are among the best exchangers for BestChange.
Whether to use the exchanger cryptocurrency?
It is on the stock exchanges that the main cryptocurrency trade is concentrated. And it is on them that the main instruments are presented that allow you to play and earn on the volatility of the top currencies. The exchanges are more reliable, functional and powerful, with huge amounts of money spinning on them.
According to experts, the most popular exchanges affect the balance of power in the cryptocurrency market. For example, the price of ETC has doubled in just a couple of days only due to the appearance on the Poloniex. And the promotion on Bitfinex made the USDT token popular.
If you want to make money on races of prices of popular currencies, buying and selling them on exchangers, you will have to constantly monitor rates at different sites. And it is not a fact that commissions will not eat up most of the potential profits.