A cryptocurrency exchange, or simply a virtual currency exchange, is simply a business that allows users to trade cryptosystems or virtual currencies for traditional currency or other virtual currencies. There are numerous virtual currency exchanges existing throughout the world today. Most businesses will either directly or indirectly provide the services of a virtual currency exchange to their clients. The most well known virtual currency exchange is Paxful, which currently manages a number of currencies including, but not limited to, the US dollar, the British pound, the Euro, the Japanese yen and the Swiss franc.
Virtual currency exchanges operate in much the same way as traditional stock exchanges. When you trade on the Cryptocurrency exchanges you are usually buying a stock, or portfolio of stocks, at a specified price and at a pre-determined limit. The difference however lies in the fact that your trades are not traded in traditional market order. Rather, your trades are made via what is called a market order. When you enter a market order on one of these Cryptocurrency exchanges, you are telling the exchange that you want to buy (sell) a specific quantity of a specific virtual currency at this price and at this limit.
How do you know when to enter and when to exit the marketplace? You don’t want to be the first trader to cash out because you could end up losing all of your investment, which is highly unlikely if you had done your research and only bought the digital currencies that you were most interested in. Many times investors will make the mistake of believing that they are guaranteed to make money from Cryptocurrency exchanges – and they are NOT! Virtual currencies never have a true “real world” value. They are only valuable as long as someone is willing to trade them for you.
In the United States, the Financial Services Authority recently introduced new regulations for the Cryptocurrency exchanges in New York. Those regulations state that those who operate Cryptocurrency exchanges must register with the FSA. The new regulations also require each Cryptocurrency exchange to obtain an accredited buyer list from a third party organization. This third party organization is required to perform an evaluation of the liquidity and size of the Cryptocurrency marketplace, to file reports with the SEC, and to participate in a compliance program. This third party agency is called the RegDx and is led by Goldman Sachs.
If you’re looking forward to participating in the new markets in 2021, you’ll need to do more research. There are many new currencies being introduced around the world. Two of the most interesting are the New Zealand real and the Swiss franc. You’ll also need to understand how the regulated exchange will affect your Cryptocurrency trading. Read the article below and learn why you should look forward to the new regulated Cryptocurrency exchanges in New York in 2021.
In the US, in January 2021, two new exchanges will start operation. These will be the CFTC and the OTCBB. Both these Cryptocurrency exchanges are designed to reduce fraudulent transactions and to make it easier for smaller investors to participate in the Cryptocurrency market. For smaller investors, the lack of regulation might limit their ability to participate in the marketplace. On the other hand, if you’re a larger investor, you’ll have plenty of opportunity to trade and profit from this exciting new frontier.
Cryptocurrency exchanges provide a valuable service to Forex and Retail traders. If you want to use Cryptocurrency exchange to make money, you’ll need to know when to buy and sell your currencies. A lot of traders buy large amounts of one particular currency expecting to quickly profit from it. If the exchange rate of the main currency is low, they jump into the market thinking it will soon rise. However, if the exchange rate of the lesser currency is high, they choose to stay put since they think it will soon fall back to the lower value. The Cryptocurrency exchanges allow you to enter and exit trades quickly and in order to maximize your profits.
Another benefit of the Cryptocurrency exchanges is their low commissions. Since they have minimal operational costs, they offer very low commission rates compared to brokerages and discount brokers who offer similar services but charge much higher fees. The low commission rate allows traders to easily move between multiple currencies without holding on to margin. Traders can also take advantage of their 24-hour trading volume to choose which currency pairs to focus on during their trades.
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