As in the case of shares or commodities, the vast majority of trading on the cryptocurrency market takes place through stock exchanges. However, they do not have a physical trading place – they are virtual and completely decentralized (just like in the case of the Forex market). Provide access to a range of key market information – the value of individual virtual coins, valuation, trends, volumes and the like.
Stock exchanges are extremely important for any virtual currency investor, regardless of their level of advancement. They are created in such a way as to meet the needs of the unique, dual industry characteristics. They are tailored to the expectations of traders with experience and knowledge from traditional markets and to beginner investors who have never invested in a traditional stock market.
Sale and purchase of cryptocurrencies directly on the stock exchange
On the cryptocurrency exchanges, we can use two basic methods of buying and selling coins. The first of them is a direct purchase from the exchange itself – in this case no other investor is involved in the transaction. The whole works on a very simple principle – a physical currency is transferred from your bank account and exchanged into virtual currencies according to their current valuation. However, it should be remembered that by purchasing digital coins directly from the stock market owners, the transaction will be charged with additional handling fees.
The second method is the one in which the exchange only plays the role of an intermediary. It becomes a platform that allows buyers and sellers to meet and exchange transactions take place between them. Offers can be submitted in the form of an auction or direct order – we inform in the offer how many coins we want to buy / sell and at what price. Many investors prefer this solution, because the role of the stock market is limited here and additional fees either do not occur or are very small.
Of course, an exchange is not needed to exchange cryptocurrencies. We can find potential buyers / sellers by ourselves. In this case – without the exchange arbitrage – however, the risk increases that we will be cheated.
A review of events and analyzes from the world of cryptocurrencies is made in cooperation with the Polish BitBay stock exchange offering free accounts for trading on digital currencies. Acquaint yourself with the BitBay offer and start trading on BTC and altcoins now.
Independent cryptocurrencies valuations
If you’ve ever followed Bitcoin’s course, you’ve probably noticed that for individual exchanges, the difference between quotations can be as much as several percent. This is due to the fact that cryptocurrencies as completely decentralized forms of payment do not have an overarching regulatory authority. Each stock exchange independently determines the BTC exchange rate based on the market situation and the demand and supply forces taking place in its own structures. While the prices of individual exchanges tend to correlate strongly with each other, the differences are often noticeable – especially in the case of less popular coins characterized by the highest volatility.