There are countless exchanges and brokers in the crypto industry. It’s easy to lose track of things. We explain what you should pay attention to when choosing the right provider.
1. Stock exchange or broker – the costs and what is best for me?
Cryptocurrency exchanges provide a platform for buyers and sellers to trade cryptocurrency with each other at current market prices. A large number of different cryptocurrencies are often offered. Exchanges are best suited for active and experienced traders, since you manage and control your own trades.
Crypto brokers, on the other hand, are generally very clean and newbie-friendly. On the other hand, the fees, i.e. the spread, are significantly higher for a crypto broker than for a crypto exchange, since the broker manages and invests the funds or cryptocurrencies. Typically, fees for brokers are between 0.75 and 1.5%.
Bitvavo has implemented a particularly interesting model that combines the best of both worlds: the simplicity of a broker combined with the significantly lower fees of a crypto exchange. Fees are based on each trader’s trading volume. This is how the exchange motivates his community to trade. The higher the trading volume, the lower the price. With a trading volume of less than 100,000 euros, the fee is 0.25% and continuously becomes cheaper with higher monthly volumes. Deposits via the SEPA procedure are completely free and PayPal will soon be available for even faster and easier transactions
2. Trust, Legal Regulation and Platform Security
Money laundering, terrorist financing, shady business on the dark web. Cryptocurrencies still have to fight for their reputation. A stock exchange always appears particularly trustworthy when it is registered with the central bank of the country. Exchanges based in the EU are generally subject to stricter supervision than in other countries. For the consumer, however, it is positive. Central banks monitor compliance with the Prevention of Money Laundering and Terrorist Financing Act and sanctions laws. This ensures that cryptocurrencies are not misused. It is therefore advisable to opt for a crypto exchange with European regulations.
Regulatory developments can have a positive impact on the acceptance of cryptocurrencies. For example, Bitvavo’s registration with the Dutch Central Bank has been accompanied by growing interest from institutional clients. Additionally, Bitvavo is a member of a self-regulatory body. Members of these organizations voluntarily agree to abide by a code of conduct, on the basis of which Best Practices in the field of digital currency must be respected. For example, Bitvavo offers additional protection against scams and your own typing errors because each external wallet must be verified once before payment by a short video.
On the other hand, crypto enthusiasts are also worried about excessive intervention by authorities. The topic of decentralization is extremely important for the industry.
3. German customer service
Despite our globalized world, there are still language barriers. Especially when it comes to complex topics such as cryptocurrencies and the technology behind them. Therefore, for our German-speaking readers, crypto exchanges with a support offer in their own native language are particularly suitable.
When choosing a suitable crypto exchange, always check what different communication channels are offered. When support is available and how quickly it responds to requests.
Communication options such as:
- live chat
- email support
- Discord Server
Support should also be available every day if possible, as crypto markets do not sleep.
4. What cryptocurrencies are offered?
The larger the portfolio of the respective stock exchange, the better investors can diversify their own portfolio. An old saying goes, “Never put all your eggs in one basket. If the price of one currency drops, the price gain of another cryptocurrency can in turn offset the loss.
In addition to classics such as Bitcoin, Ethereum, Cardano, Ripple and Co., the Bitvavo exchange has more than 170 other cryptocurrencies in its portfolio. All these currencies can be easily purchased with euros, directly via the application or the website. For each of these currencies, there are charts for the analysts among us and detailed explanations of the projects behind the respective token.
Ad-hoc announcements are also displayed in the newsfeed, allowing you to keep an eye on the market via your smartphone.
5. Additional features
Finally, you can check if there are any interesting additional functions such as an app or staking options. Traders need to be able to react quickly to the market. An app allows you to keep an eye on prices and trade at lightning speed.
It is especially useful for beginners when vendors offer different user interfaces, depending on the level of knowledge. Bitvavo offers a simple interface with minimal information and content, so crypto newbies don’t get overwhelmed. For example, the advanced user interface contains different types of orders, such as market order (standard), limit order and stop-limit order.
Additionally, some exchanges, like Bitvavo, also offer staking. Staking is based on the proof-of-stake durable consensus mechanism. With staking, investors can earn passive crypto income by depositing coins to create new blockchain blocks. There is then a return on the deposited documents. This yield is usually much more lucrative than conventional bank yields.
Crypto fintech solutions in the heart of Amsterdam
Transparent communication, easy entry into the world of crypto and forward-looking solutions. Bitvavo is currently the most polarizing crypto exchange in Europe and the largest crypto provider in the Netherlands. The young fintech company was founded in Amsterdam in 2018 and combines a classic cryptocurrency exchange with a staking service in one user-friendly app.
Bitvavo offers: The best of both worlds. The simplicity of a broker combined with the significantly lower fees of a crypto exchange.
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