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Cryptocurrency Exchange Platforms: Types and Categories

Cryptocurrency exchanges, otherwise known as Digital currency exchanges or Bitcoin exchange,  is an online platform which provides the services of allowing traders exchange one form of cryptocurrency for another cryptocurrency or to exchange a cryptocurrency for fiat currency (legal tender).

Of course, in order to determine the type of cryptocurrency exchange to use, knowing the types of exchanges is quite paramount.

1. Traditional Cryptocurrency Exchanges:

These are exchanges where traders can purchase or sell of their cryptocurrencies based on the current market price. They are referred to as a marketplace platforms or regular bitcoin exchanges, owned by a third party or middleman where a fee is charged for each transaction. Some of these exchanges deal with only cryptocurrencies while some allow you to get digital assets using fiat currency.

2. Direct Trading Platforms:

These are peer-to-peer platforms which connect buyers and sellers together.Sellers on this platform do not have a fixed selling price as there is no intermediary.  Sellers are allowed to set their own price range, while buyers will contact the seller through the platform, perform an Over the Counter(OTC) Exchange. Sellers can also sell their holdings by putting the price at which they want to sell their holdings while the platform matches them with potential buyers.  

3. Cryptocurrency Brokers:

A simple and easy to use solution for new traders, Cryptocurrency brokers are website-based exchanges which allow clients and customers purchase and sell cryptocurrencies at a price set by the broker.Although the transaction fee is a little higher than what is paid on a regular bitcoin exchange, new traders and investors find it easy and more simple to use.

4. Cryptocurrency Funds:

Cryptocurrency funds are pools of cryptocurrency assets managed professionally which allows investors buy and hold cryptocurrency via the fund. Examples of assets handled in cryptocurrency funds are bitcoin, ethereum and 500+ altcoins with over 50+ digital tokens. Cryptocurrency funds are further categorized into three, which are:

A) Public traded Funds:

These funds focus on a single asset, let’s say bitcoin, using a buy and hold strategy. An expected amount of your holdings ranging from 1.5% to 2.5% is deducted as management fee per year. It is also expected that the fee reduces when more funds are infused into the system.

B) Private buy-and-hold Funds:

What makes the private funds different is the fact that restrictions are placed on the number of holdings an investor can have either in size or per status (e.g accredited investors only). Also, you can’t find these funds listed on publicly traded exchanges.

C) Hedge Funds:

A hedge fund is a pool of lightly regulated capital that invests in whatever it likes within some broad strategic parameters. They have active trading strategies including eg leveraged trading, price arbitrage, and algorithmic trading.

The Latest and Best Cryptocurrency Exchange is Underway, aggregated in the Avesta Platform

A lot of the regular bitcoin exchanges charge high amounts of transactions fees , discouraging new investors from investing or purchasing cryptocurrencies. The exchange rate of some of these exchanges goes as high as 10% which might be detrimental to new or small investors. In addition, some exchanges restrict some of the services from users residential in certain countries. Some others have limited payment options which may not be convenient for you to use as an investor as it exposes you in releasing your identity before making your payments.

Avesta, comes with a low transaction fee, user-friendly interface, fast confirmation time of only ten seconds, few clicks or taps and you have access to cryptocurrencies, giving users a Seamless Digital Currency experience while keeping security paramount!

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