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What characterizes a crypto broker

What characterizes a crypto broker - Photo 1

Trading digital currencies are becoming increasingly popular among professional and novice traders. Unsurprisingly, many established companies and new market players become cryptocurrency brokers. Let's see what these intermediaries are and what are their advantages over digital asset exchanges.

Introduction to Crypto Brokers

One of the most frequently asked questions when trading cryptocurrencies is whether I should trade on crypto exchanges or with a crypto currency broker. If you want to keep your coins longer, you need to switch to Coinbase, Binance, or any other crypto exchange. If you want to speculate, buy and sell quickly, you must go to a crypto broker offering advisory or brokerage services. So what is a crypto broker?

Definition and Role of a Crypto Broker

A cryptocurrency broker is a financial intermediary that provides digital asset trading services. What characterizes a crypto broker? At the same time, the difference from classical financial intermediaries in the market is minimal. Often the client receives similar trading conditions for trading bitcoin and altcoins, as well as for trading fiat currencies. By the way, many traditional companies have begun to provide customers with access to a new market as an additional service. Today, they include well-known cryptocoin brokers like FXPro, Exness Group, etc.

Distinction between Crypto Brokers and Crypto Exchanges

Many crypto brokers have been operating on the market much longer than exchanges, so they gained an excellent reputation and experience. However, from the point of view of the functions of the exchange, they are often superior, although only in some things.

Differences may lie in such aspects:

  • Trading terminal. The exchange usually uses its trading terminal, including the rate chart. As for cryptocurrency broker, as a rule, they use MetaTrader 4 or 5 terminals in the online version or as a downloadable program. The user needs to download the terminal from the broker's website and connect under his account.
  • Leverage is used in both options, but exchanges have recently reduced it due to increased volatility and risks of the crypto market. Leverage, or leverage, is the amount that the service provider is willing to lend to the client so that he can open a larger position than with his available funds.
  • Methods of replenishment and withdrawal. Due to their regulated nature, cryptocurrency-enabled broker cryptocurrency usually provides more deposit and withdrawal options.
  • Terms of trade. This includes the amount of leverage, commissions, spread (the difference between the purchase/sale price), and assets available for trading.

In general, exchanges offer more loyal conditions. So, to start working with a broker, preparing a starting capital of at least $2000 is recommended. You can enter the exchange with a much smaller amount - from $100.

Regulatory Frameworks and Licensing Requirements for Crypto Brokers

This framework is based on "same activity, same risk, same regulation." It provides a solid foundation to ensure that the activities of crypto assets and so-called stablecoins are subject to consistent and comprehensive regulation commensurate with their risks.

Key Features and Services Offered by Crypto Brokers

Here is what the broker cryptocurrency should do:

User-Friendly Trading Platforms and Interfaces

  • Conclude transactions for purchasing and selling securities - stocks, bonds, and so on. The broker can do this for himself and his clients.
  • Accompany transactions. The broker makes calculations, prepares documents, and advises clients on other transaction issues.

Availability of Multiple Cryptocurrencies and Trading Pairs

  • Make analytical market reviews for clients, draw up different trading strategies, etc.
  • Place issuance securities. In this case, the broker is a financial advisor who helps draw up a prospectus for the issue of securities.

Security Measures and Custodial Services Offered by Crypto Brokers

  • Insure customer transactions. Brokerage companies exist independently of banks and cannot access client accounts. Therefore, they usually do without insurance protection.

Factors to Consider When Choosing a Crypto Broker

Today, many companies offer various trading conditions. It can be difficult for a novice trader to choose the one that will suit him from multiple companies. 

Reputation and Trustworthiness of the Crypto Broker

Plus, you should pay attention to the risk of falling into the hands of scammers. Because the cryptocurrency market has just begun to develop, not all schemes of dishonest brokers can be disclosed. To make a choice, you need to pay attention to several criteria that will direct the trader in the right direction, and he will be able to find the right broker for cryptocurrency and to know what characterizes a crypto broker.


What is a crypto broker? A broker is an intermediary between an investor and an issuer who issues securities. Buying shares or other securities with a broker for cryptocurrency is only possible. The broker has a special license to buy and sell assets. Investors are not issued such a license. To work with a cryptocurrency broker, you need to agree. This can be done online or offline.

The broker is obliged to buy and sell those securities that you say. For this, he takes a commission. To reduce risks and choose the right broker for cryptocurrency, it is important to read reviews, find out how long the company has been on the market, check the brokerage license, and read the contract you sign with the crypto currency broker very carefully.

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