Crypto Exchange
A crypto exchange is a platform for buying, selling, and trading cryptocurrencies with regular money or other crypto. Funds left on an exchange are a claim on the company — not coins you control directly.
Exchanges are the on-ramp for almost all crypto purchases, handling identity checks, banking connections, and order matching. Fees vary widely — spread, trading fees, and withdrawal fees can differ by multiples between platforms, which matters enormously for recurring DCA purchases.
Security practice: treat exchanges as a place to transact, not to store. Withdrawing to self-custody removes the counterparty risk that exchange failures have repeatedly realised.
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Related terms
- Self-Custody
- Self-custody means holding your own cryptocurrency private keys rather than leaving coins on an exchange. You gain immunity from exchange failures, at the cost of being solely responsible for security and backups.
- Stablecoin
- A stablecoin is a cryptocurrency designed to hold a fixed value, usually $1, by being backed with reserves (cash, T-bills) or algorithmic mechanisms. They function as the cash leg of crypto markets.
- Cost Basis (Crypto)
- Cost basis is what you paid to acquire a crypto asset, including fees. Capital gains tax is owed on the difference between sale proceeds and cost basis, so accurate records of every purchase are essential.