Many people have only recently gotten into the cryptocurrency, and therefore, trading space in general. In a place full of new terms, “cryptocurrency trading platform”, “cryptocurrency brokerage” and “cryptocurrency exchange” get mentioned often.

So what is the difference between those terms?

Cryptocurrency trading platform

A cryptocurrency trading platform is a place where a person can buy, sell or trade cryptocurrencies for one another. A trading platform can be both an exchange and a broker. This term is often mistakenly used as a synonym to “cryptocurrency brokerage”.

Cryptocurrency exchange

Cryptocurrency exchanges are platforms that allow for exchanging one coin for another, or fiat currency for digital ones. All of the cryptocurrency exchanges have many digital currencies to choose from when deciding what to trade. They usually have a few main cryptocurrencies which act as a unit of measurement, and other smaller currencies which they can trade for the main ones. They are a great tool to utilize when diversifying portfolio.

Exchanges usually do not offer any advanced trading tools, nor do they offer leverage. The options are far more limited when compared to cryptocurrency brokerages.

They have been relatively unsafe throughout the history, as many security breaches have damaged the exchanges around the world for over $1 billion in cryptocurrencies.

Cryptocurrency brokerage

The other part of trading platforms is brokerages. Cryptocurrency brokerages are platforms where traders can enter long and short positions, and bet on a digital currency going up or down in price terms against (usually) US dollar. They have fewer currencies as trading options. Brokerages are a great option when a trader wants to size up and bet on the movement of a certain digital currency.

Cryptocurrency brokerages tend to offer advanced analysis and trading tools. Some of them, like Prime XBT, offer leverage of even up to 100x.

Conclusion

Both cryptocurrency exchanges and brokerages have their place on the market. A trader should pick and use one or both of these trading platforms depending on the specific needs of theirs.