Cryptocurrency Exchange
A cryptocurrency exchange is a platform for buying, selling, or trading digital assets through crypto or fiat markets.
- Also known as
- crypto exchangetrading platformdigital asset exchange
A cryptocurrency exchange connects buyers and sellers of digital assets. Exchanges provide order matching, price discovery, liquidity, custody options, and fiat on-ramps or off-ramps depending on the platform.
Centralized exchanges are operated by companies and usually custody customer assets. Decentralized exchanges use smart contracts or peer-to-peer settlement, while P2P marketplaces help users trade directly with each other.
Liquidity determines how easily an asset can be bought or sold without moving the price. Deep order books, active market makers, and high trading volume usually reduce slippage.
Exchange risks include hacks, insolvency, frozen withdrawals, market manipulation, regulatory restrictions, and user account compromise. Self-custody reduces exchange custody risk but introduces responsibility for private key security.
Related terms
Explore connected entries beyond the alphabetical index.
Centralized Exchange (CEX)
→A custodial platform that matches orders and holds user funds.
Decentralized Exchange
→A decentralized exchange (DEX) lets users trade digital assets from their wallets through smart contracts or peer-to-peer settlement.
Liquidity
→How easily an asset can be bought or sold in size without causing a large price move.