by Hodler Ash 
How Does The Cryptocurrency Exchange Work ?
Cryptocurrency is one of the most widely used terms in the past few years both online as well as offline. There are a lot of things related to the cryptocurrency that a person should understand before getting into the market. These definitely include difficult things as well as easy things but at the end of the day, the most basic things are supposed to be learnt first. It is true that the sole motive of every single investment is to make profit and exchanging cryptocurrency can earn you profit if it is done correctly.
How To Exchange Cryptocurrency ?
Before getting into the whole spectrum of cryptocurrency exchange, one should know that the rate of the currencies are set by the actions of the sellers and buyers in the market. There are no specific prices for specific coins or tokens and that is what helps a trader earn money.
After the rate of the currencies are set in the market, one should have the power of analysing and searching for the best token to invest in. The investment should depend only on the potential rise of price of that particular token in the near future. If the trader has correctly analyzed market trends and speculations and thinks that investing in an asset now would actually be very profitable in the coming days, he or she should go for it.
Also, there are other factors that can affect the price of a coin and this might just be so unpredictable that it can even rekt the trader. Again, this unpredictability makes the crypto market what it is and regular traders have embraced this fact.
Cryptocurrency exchanges are basically a market where a lot of trading (buying and selling) of coins and tokens keeps happening. Various different crypto exchanges have different types of features. Some of them are designed for the regular traders while the others are designed for crypto-to-fiat exchanges. It is no wonder that these cryptocurrency exchange platforms charge certain fees for withdrawing the money to your bank account and that is how they earn profit and keep going.
The relatability factor is huge here for the people who have been connected regular stock exchanges. The cryptocurrency exchange works the same way and that is why many people from the stock market where reported to be moving to cryptocurrency market as well, after the rise of it in 2017.
Why Do Prices Of Crypto Exchanges Vary ?
The bottom line of the answer to this question is the fact that exchanges are not really connected. The prices of any cryptocurrency coin or token varies according to the market trends, buy and sell activity on each of the exchanges and many more factors. Every single exchange calculates the price of a specific cryptocurrency based on the volume of trades happening on their exchange platform itself. Basic economics will prove the increase or decrease in price according to the demand and supply of the specific coin. A trader will get more market relevant price with bigger exchanges and vice versa.
Finding a stable price of a cryptocurrency such as Bitcoin is very improbable. The prices are always determined according to the market at that moment. The price that is available on news services including Google are basically the aggregate price of Bitcoin and other such coins.
A trader can also earn small profits by capitalising on the price differences on various exchanges. The profit here, is low because the fees to the exchange platforms are also payable. The difference of price in different exchange platforms can reach up to 5% on active trading days and those are the times when you should check out the exchange fees of the platforms and plan your investments accordingly. The value difference should not be surpassed by the total exchange fees because then, the trader would not be able to earn profit.
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