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Cryptocurrency Exchanges Take A Step Away from Traditional Exchanges

As Bitcoin is quickly entering the mainstream, a large number of people want to acquire the coin and trade it. However, they have to go through specialized cryptocurrency exchanges as traditional brokers still shy away from digital assets.

Bitcoin traders flock to cryptocurrency exchanges

People interested in trading Bitcoin or other digital currencies use platforms known as cryptocurrency exchanges. These platforms are designed to let users deposit, trade, and withdraw cryptocurrencies or fiat money (cash). They also provide users with crypto “hot wallets” where they can store their digital assets. While platforms like Trading Beasts keep them updated with latest buzz.

Crypto Exchanges Take A Step Away from Traditional Exchanges

New companies like Binance, Huobi, OKEx, Coinbase, Bittrex, Bitfinex, Poloniex, etc. are some of the biggest names in the cryptocurrency exchanges. They boast of millions of accounts where users buy, sell and trade digital assets. According to data provider CoinMarketCap, crypto exchange LBank handled $1.3 billion worth of crypto volume in the last 24 hours.

Binance’s 24-hour volume was over $766 million while Huobi Global handled $644 million in one-day volume on January 2, 2020. Data suggests that five exchanges accounted for over $5.4 billion in volume in the last 24 hours.

How do traditional brokers hold up?

Traditional brokers are grossly unprepared for the onslaught of cryptocurrency exchanges. Recently, a new age, commission-free forex trading app Robinhood claimed to have hit the 10 million user mark, rattling its larger peers. The platform is now as big as TD Ameritrade. Now, traditional brokerages have started providing commission-free trading services to users.

Cryptocurrency exchanges are swifter, friendlier, and easier to use compared to traditional brokerages. As the crypto industry is still operating outside the regulatory purview, the exchanges get to onboard users more quickly. Though most exchanges have started adopting stringent KYC norms, the reality is that this self-regulation is much more lenient than a traditional exchange.

As a result, crypto exchanges are also less secure when compared to traditional brokerages. However, given the rising popularity of cryptocurrencies and the regulatory stance on digital assets, the industry is expected to consolidate and formalize in the years to come.

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      Sherlock Gomes loves to write and express his views on anything related to Crypto. He has been covering Crypto for more than two years now. He likes Bitcoin and Cardano. He also writes on Finance, Healthcare, and Technology among other stuff. He can be reached by e-mail on sherlockg@insidebitcoins.com