An exchange and broker may sound similar but they are in fact very different from each other. Let’s take a look at why.
So, firstly, what is a cryptocurrency exchange?
A cryptocurrency exchange (sometimes just known as a crypto exchange) works in a similar way to a stock exchange and is usually a website where you can buy, sell, or exchange cryptocurrencies for other digital currencies or traditional currencies such as the US dollar or the British Pound. Most exchanges happen between different cryptos, such as Bitcoin, Litecoin and Ripple.
If you want to trade for a living and have the right resources available, you will likely need to use a crypto exchange that requires you to verify your identity and open an account. If you just want to make the occasional, straightforward trade, there are also platforms that you can use that do not require an account.
Here are the typical types of exchanges:
Trading platforms: websites that connect buyers and sellers and take a fee from each transaction
Direct trading: platforms that offer direct person-to-person trading where people from different countries can exchange currencies
The traditional cryptocurrency exchanges are popular among the average crypto trader, but it becomes less feasible for larger amounts. These higher volume trades are where a cryptocurrency broker can become a better option.
What is a cryptocurrency broker?
With a cryptocurrency broker, such as LeoPrime, your funds are traded via a dealer network, as opposed to a centralized exchange, and is referred to as an over-the-counter (OTC) market. Hence why we use that a lot, whether it be for Litecoin, Bitcoin, Ripple or Ethereum!
So, brokers, such as LeoPrime, find sellers or buyers who individually hold a lot of cryptos, and pair them for the sale. It ends up being more flexible and more convenient, with a settlement period that is generally faster than an exchange.
So, if you were to buy a certain amount of cryptocurrency on a traditional exchange, you can then just compare the value to the price with an OTC broker.
If you are going through a cryptocurrency broker at LeoPrime, then you will save a lot of hassle, time and money because you only need one transaction. This is especially true for Bitcoin and Litecoin.
LeoPrime’s cryptocurrency account allows some of the premium cryptocurrencies in the market till date to be traded through off-exchange OTC transactions.