Keep seeing people mention "brokers" vs "exchanges" but honestly don't get the difference. Aren't they both just places to buy crypto?
I use Coinbase and Binance – are those brokers or exchanges? And does it even matter or is this just semantics?
Tried googling but got confused by all the technical explanations. Can someone ELI5 this?
What's actually the difference between a crypto broker and an exchange?
byu/Boring-Sir2623 inBitcoinBeginners
Posted by Boring-Sir2623
1 Comment
Consider this
Exchange (most common term in crypto)
Exchange meaning “stock exchange” or “trading platform”.
It’s where you can buy, sell, and trade cryptocurrencies.
Examples: Binance, Coinbase, Kraken, Bitstamp.
This word is the most correct and most used when we talk specifically about cryptocurrencies.
So when you talk about platforms like Binance or Coinbase, the most used term in the crypto community is exchange.
Brokerage Firm
Brokerage firm is the term for companies that intermediate assets (such as stocks, currencies, cryptos, etc.).
In crypto, it can be used to refer to companies that do direct buying and selling, especially when the user is not trading with other users, but rather buying/selling with the platform itself.
In traditional investments, we often use “brokerage firm” to refer to those who intermediate stocks, funds, ETFs, etc.