The high volatility of cryptos opens up a wide range of opportunities for investors and traders who can buy and sell at different prices. They use different methods which involve buying and selling assets at different frequencies. There are four types of trading: intraday, swing, position and arbitrage. Crypto exchanges are where you can buy and sell assets.
A crypto exchange platform is an online website that facilitates all digital asset transactions. These services are available in the following forms:
- Centralised
- Decentralised.
What is CEX?
CEX is an exchange that focuses on crypto.
- These platforms are operated by official entities. These platforms are registered and adhere to regulations.
- These exchanges let users buy digital assets using fiat currency and offer fiat/crypto pairs.
- The funds used in crypto transactions are stored on the servers of an exchange.
- CEX offers several layers of protection to its clients.
- CEX has a wide range of trading tools, and it allows you to use leverage (borrowed money) when trading.
- These platforms provide a large range of trading options.
- Cash withdrawal and deposits are possible.
Binance, WhiteBIT Coinbase and Huobi are examples of centralized crypto platforms.
What is DEX?
Decentralized exchanges (DEX) are different than CEX. DEX, for one thing, does not store users’ funds on its servers. Instead, they are transferred between wallets. DEX does not guarantee the safety of its clients and is therefore not responsible. Next, there is the difference in trading tools. DEX does not offer advanced financial instruments such as margins, futures and so on.
DEX is suitable for trading small amounts. They don’t require verification of the user. SushiSwap, UniSwap are examples of DEX.
Crypto investors use both types of trading platforms. You decide which service you want to use; check the reputation, fees, crypto rates and trading tools.
