At the peak of the bull market, plenty of freshmen crypto enthusiasts joined the crypto space. Now they find themselves in a new environment, completely different from what they have seen so far. Getting used to trading crypto in a bull market can make it difficult to adjust to a new cycle but this is what this article is for. Learn how using an instant crypto exchange platform can help you save on trading!
Why Do You Need an Alternative to Crypto Exchange?
First of all, why would you need an alternative to trading platforms in the first place? After all, this is the most popular option to buy and sell digital currencies with new users and advanced traders alike.
The thing is, even for the same trading pairs exchange rates can vary significantly from platform to platform. This is because strictly speaking, each cryptocurrency exchange is a market of its own, with their own users determining the prices through balancing supply and demand. Not to mention each platform charges its own trading fees.
So how cryptocurrency prices are only slightly different across platforms? Arbitrage is one of the things maintaining consistency of rates. In simple terms, it is an activity of making use of price difference on different markets: for example, buying an asset cheaper on one market and then selling it on another for a higher price. Nevertheless, arbitrage only makes it so the rate difference is not too drastic. Crypto exchanges still have their own rates, and finding the best one can be a headache. This is where instant crypto exchange platforms come in.
The way they work is they source liquidity from several centralized and decentralized exchanges and provide users with the best exchange rates at the moment. They are convenient because you only need one account — or none at all — to trade on several crypto markets at the same time.
Instant crypto exchangers are also more convenient and user-friendly than both centralized and decentralized crypto exchanges, leaving only the bare necessities of the UI. But the best thing? Since these platforms find the best rate from multiple exchanges, anyone can make use of arbitraging and even make money on rate fluctuations. Other benefits of exchangers over cryptocurrency exchanges include easy-to-use interface, easy purchase process and no need for a crypto exchange account.
What Problems Do Crypto Exchanges Have?
What problems have you ever faced with popular crypto exchanges? We addressed this question to a few influencers whose opinion might be interesting to you.
We received the first comment from Donald Lee, known as a host of CoursehackClub on YouTube. He gladly provided a surprisingly in-depth reply with details beginner crypto traders might not even know.
Donald Lee (CoursehackClub):
I do NOT have problems with Binance or Coinbase right now, but I do have to give genuine words of warning to the readers. First of all, for Coinbase, know what is FDIC insured (i.e. fiat like USD). I am not buying any USDC because cryptocurrencies (including stablecoins) are not FDIC insured – that means if Coinbase goes bankrupt or becomes insolvent, you WILL lose your crypto on that platform. And in light of their recent layoffs, I'm keeping minimal funds with them (only enough to set in limit orders for dollar cost averaging into the cryptos I want).
Since we seem to be going into recession, I have been urging my own audience to move all crypto from centralized exchanges to a Ledger and I've made a video to help. Trust in centralized entities right now is lacking with respect to all the liquidity issues and withdrawal pauses that had come to light.
If readers know how to use decentralized exchanges, I would use that over CEXes.
In summary, I would only deposit what I'm willing to lose with exchanges and only deal in insured fiat currencies (i.e. USD). No USDC, USDT or any stablecoins or crypto assets will be held on exchanges for me. It's just too risky with their terms of service.
Another influencer we asked goes by Cardano Hieronymus (@CardanoHumpback) on Twitter. If you hang out with the Cardano community a lot, you might know them well. Here’s what they have encountered when using a centralized crypto exchange:
Well, generally speaking, not your keys, not your coins. I never store my holdings on exchanges, so exchanges should be used only to buy and sell crypto with fiat currency. Immediately remove the coins from them, sending them to your non-custodial wallet. Some crypto exchanges will require many blocks to allow you to mobilize your funds after a withdrawal or a deposit: that's to ease their internal funds management, but they often blame crypto networks for these delays. ADA on Binance often has been reported as "mainnet congestion, withdrawals are temporarily suspended" but mainnet was going through smoothly.
How an Exchanger Can Help You Save on Crypto?
How can using an exchanger over a trading platform be more profitable? Let’s have a look at how one of these platforms, ChangeHero, works.
Firstly, it operates on an account-free basis, like a DEX: users don’t need to log in to make an exchange in contrast to most crypto exchanges. Incidentally, your jurisdiction also does not matter unlike for some supposedly global crypto exchanges.
Secondly, an instant cryptocurrency exchange platform like ChangeHero lets you choose between a fixed and floating rate. You can either freeze a good rate for 15 minutes or use a floating rate to your advantage. Either way, the platform will pick the best crypto exchange rate for the estimate.
Thirdly and finally, there are no user balances and custody over user funds, so no deposit and withdrawal fees are charged. The exchange charges of 0.5% cover network transfers and crypto exchange fees. Users do not need to give up private keys or any other information, and the funds only move between your crypto wallet and the platform directly.
Be it a bull or bear crypto market, crypto is here to stay, and cryptocurrency exchanges remain one of the most popular on-ramps. However, there is an even more convenient way to trade crypto, which saves a lot of trouble, time and money on trading fees.
If you enjoyed the infographic courtesy of ChangeHero, check out their blog for even more tips and guides, and give ChangeHero a follow on Twitter, Facebook and Telegram for live updates and even more content.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other adviceInvestment Disclaimer