When you're just starting to trade cryptos, or even if you're already an experience crypto trader, you might have noticed that most sites mention crypto trading platforms and crypto exchanges as if they are exactly the same thing.
But they are not.
Although at the same time they can be similar.
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What is a crypto trading platform?
It is normally very easy to make a fiat deposit in crypto trading platforms and the same applies also to withdrawing money.
But in order to do either of those things, mostly you need to go through KYC process very soon after signing up at the platform.
When trading cryptos on crypto trading platforms, or brokers, you can use third-party trading software such as Metatrader 5 for trading.
You normally can't use these when trading in an exchange.
You have more charting options, technical indicators, stop-loss orders and much more.
But the amount of pairs your can trade is generally lower in crypto trading platforms.
When you're trading in crypto platforms, you don't normally own the underlying crypto, but instead you're speculating on the price movements.
What is cryptocurrency exchange?
The purpose of a cryptocurrency exchange is to make it possible to trade one crypto against another. Because of that when trading in crypto exchanges you don't generally get as many features as you do at crypto broker trading platforms.
Very often it is not as easy to make a fiat deposit in cryptocurrency exchange.
Cryptocurrency exchange is where you can buy and sell cryptos mainly against each other.
Only within the last year or two it has become easier to also deposit fiat currency in those exchanges and trade with real currencies like EUR or USD as well.
Same as above applies also to withdrawing money from a crypto exchange.
Most commonly it's easy to withdraw cryptos to send them to some other crypto wallet, but not always is it possible also to withdraw fiat to your bank account.
When you're trading in crypto exchanges, you own the crypto.
Which is better - crypto exchange or crypto platform?
So which is better, trading cryptos in cryptocurrency exchanges or cryptocurrency platforms?
We'll get to that soon!