How do crypto exchanges work?
They enable the exchange of one cryptocurrency for another, the purchase and sale of coins and the exchange of fiat money in crypto.Crypto exchanges determine the course of the currencies – both the coins and the tokens. The cryptocurrency price usually depends on the actions of the sellers and buyers, although there are other factors that can influence the price.
Different crypto exchanges can have different options and functions. Some of them are made for dealers while others are made for quick crypto-fiat exchanges. Crypto exchanges – designed for ordinary traders – allow you to buy crypto and sell it at lower commissions than on crypto-fiat exchanges. In addition, trading platforms charge fees for withdrawing money from the account.Basically, crypto exchanges are similar to ordinary stock exchanges. The difference is that traders on a stock exchange buy and sell assets – stocks or derivatives – to take advantage of their changing prices, while traders on crypto exchanges use crypto currency pairs to benefit from very volatile exchange rates.
What are crypto currency pairs?
Trading in cryptocurrency pairs allows you to benefit from changing exchange rates – this is the main business for crypto traders.Keep in mind that the order of the currencies in the pairs is always important. For example, if you expect BTC to rise against the USD in the near future, you should buy the BTC / USD pair – with BTC first and USD second – and vice versa, if you think BTC is down against the USD In this case, you should buy the USD / BTC pair – with USD first.Some popular exchanges completely avoid the use of fiat money by offering only crypto pairs. The most popular crypto-crypto pairs are BTC / LTC or LTC / BTC and ETH / BTC or BTC / ETH. However, there are many crypto exchanges – like the ABCC platform – that allow trading in USD (USD / BTC, BTC / USD, etc.). After you make a profit – or maybe a loss – complete the deal and start a new one.
Why do crypto exchanges have different courses?
Because exchanges are not related. The prices vary depending on the buying and selling activity of the respective stock exchanges.Each Exchange calculates Bitcoin’s price based on its own trading volume and the supply and demand of its users. This means that the bigger the stock market is, the more market-relevant the price you receive.There is no such thing as a “stable” or “fair” course for Bitcoin or any other coin. This is always determined by the market.Many news services, such as Google, use an aggregated bitcoin rate and other coins. Cointelegraph uses its own price index for BTC, ETH and other currencies, which is calculated as an average based on prices from the 27 most used exchanges.