- Spot trading refers to buying and selling on a specific date
- Margin trading describes buying and selling cryptocurrencies using borrowed funds
- Derivatives are speculating on price movements of cryptocurrencies without taking ownership in them
- Limit orders are placed on the Exchange with a specific limit price
- Market orders are executed immediately at the best available price
How Does the Crypto.com Exchange Work?
An exchange is a marketplace where buyers and sellers come together to trade assets at specific prices. It exists as a platform on which market participants transact without having to search for a buyer or seller willing to trade with them. The exchange takes on this task. On the Crypto.com Exchange, cryptocurrencies can be traded for stablecoins or other cryptocurrencies.
Trading through an exchange is highly preferable for traders since a large number of users are gathered in one place, which generally allows for more liquidity (i.e., the availability of an asset in the market) and, theoretically, more competitive prices.
Crypto.com offers a variety of cryptocurrency-oriented products including the trading of crypto assets, staking, wallet services, non-fungible tokens (NFTs) marketplace, and more. The Crypto.com Exchange is one such product, which offers users the ability to trade more than 200 different cryptocurrencies at market-leading fees, and discounts for those who stake the token Cronos (CRO).
What Is the Difference Between the Crypto.com Exchange and the App?
The Crypto.com App allows users to buy, sell, and store cryptocurrency. It is an easy-to-navigate entry point to crypto, allowing users to buy crypto with fiat currencies. In contrast, the Crypto.com Exchange allows for more complex trading actions that go beyond a simple buy and sell at current price.
While the Crypto.com App is only available on mobile, the Crypto.com Exchange offers both an app and a desktop platform.
To start trading on the Crypto.com Exchange, users sign up for a Crypto.com Exchange account and complete the ‘know-your-customer’ (KYC) procedures. Once approved, they can then deposit crypto — either via bank transfer (in some jurisdictions) or from another platform, like the Crypto.com App. Transferring between the Crypto.com App and Exchange is free of charge.
What Are the Most Common Ways to Trade Crypto?
Cryptocurrency trading can refer to a variety of actions. Some of the most popular trading instruments include:
1) Spot Trading: Buying and selling crypto coins and tokens (cryptocurrencies) on an exchange on a specific date (i.e., the ‘spot’ date).
2) Margin Trading: Buying and selling cryptocurrencies using borrowed funds. This allows users to put only a small sum upfront while speculating on a larger amount.
3) Derivatives: Speculating on price movements of cryptocurrencies without taking ownership of them.
What Are Trading Pairs?
A trading pair tells you which cryptos can be exchanged for one another. For example, the availability of a BTC/ETH trading pair allows users to buy bitcoin with ether, or sell bitcoin for ether. It also allows users to compare the cost of different currencies. In other words, they help users understand the relative price of crypto assets to one another (i.e., how BTC equals how much CRO when looking at BTC/CRO).
The most versatile cryptocurrency pairings include BTC, ETH, and CRO — the two largest cryptocurrencies by market cap and our native token, respectively. The Crypto.com Exchange offers users over 200 pairing options.
Below are examples of the trading pairs the Crypto.com Exchange supports and how they are listed.
There are two main reasons for users to understand trading pairs:
- Some cryptocurrencies can only be bought with other cryptocurrencies, not with fiat. Knowledge of these pairings is necessary for users who wish to expand their holdings beyond the more common tokens.
- Additionally, knowing the prices of different crypto trading pairs gives savvy users the opportunity to take advantage of something known as arbitrage — which means to profit from slight price differences in assets in different pairs.
What Trades Can You Execute on the Crypto.com Exchange?
The Crypto.com Exchange offers dozens of trading tools for users. Here, we introduce three basic tools every trader should know.
1) Spot Trading
As introduced above, spot trading in crypto is the process of buying and selling cryptocurrencies at real-time prices with the aim of generating a trading profit.
Spot traders on the Crypto.com Exchange typically buy and sell a range of cryptocurrencies in a short period of time (i.e., a few hours or a day) in an attempt to generate regular short-term profits. On the other hand, in the Crypto.com App, this typically involves holding (HODLing) a crypto asset for the medium or long term.
Read our Help Centre article for more information on how spot trading works on the Exchange.
2) Margin Trading
Like we introduced above, margin trading refers to the practice of using borrowed funds from a broker to trade a financial asset. This forms the collateral for the loan from the broker, which in the case of the Crypto.com Exchange is Crypto.com. A margin is the money borrowed from the broker, and its amount is the difference between the total value of the asset and the loan amount.
A margin account is a standard brokerage account in which a trader is allowed to use the current assets in their account as collateral for a loan. Leverage conferred by margin tends to amplify both gains and losses.
For example, if the margin is 0.1 BTC but the value of the trade on the basis of that margin is 1 BTC (i.e., 10x), a 5% move in the market (in either direction) is translated into a 0.05 BTC gain or loss (i.e., 50% of the value of the margin).
See our Help Centre article to learn more about the details of margin trading and supported trading pairs on the Crypto.com Exchange.
3) Limit and Market Orders
Market orders are transactions meant to execute as quickly as possible at the current market price. Limit orders set a maximum or minimum price at which a trader is willing to complete the transaction, whether it is a buy or sell. While the former is focused on speed of execution, the latter emphasises the right price.
Limit orders are placed on the Exchange with a specific limit price. The limit price determines the maximum or minimum price the user wants to trade. The order will be filled when the market price reaches the limit price or better.
A limit order may be filled with different prices to fulfil the order amount.
- Sell Limit orders will fill when the market price is equal to or greater than the limit price.
- Buy Limit orders will fill when the market price is equal to or less than the limit price.
Buy/Sell Market orders are executed immediately at the best available price. This means a market order will take any open orders on the Exchange’s order book to execute. A market order may be filled with different prices in order to fulfil the order amount.
Market orders will be executed immediately at the best available price on the market, and the unfilled portion (if any) will be cancelled automatically. Market orders always incur taker fees, which are costs applied to executed orders that remove liquidity from an exchange.
And there you have it — a beginner’s intro to the Crypto.com Exchange; plus trading, crypto pairs, and basic functions needed to execute on the exchange. To learn more tools for the Crypto.com Exchange, check out these videos on our YouTube channel that show you the ropes and these step-by-step guides in the Crypto.com Help Centre.
Due Diligence and Do Your Own Research
All examples listed in this article are for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, or offer by Crypto.com to invest, buy, or sell any digital assets. Returns on the buying and selling of digital assets may be subject to tax, including capital gains tax, in your jurisdiction.
Any descriptions of Crypto.com products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation. In addition, the Crypto.com Exchange and the products described herein are distinct from the Crypto.com Main App, and the availability of products and services on the Crypto.com Exchange is subject to jurisdictional limits. Before accessing the Crypto.com Exchange, please refer to the following links and ensure that you are not in any geo-restricted jurisdictions for Spot Trading, Margin Trading, Derivatives Trading, and Lending.
Past performance is not a guarantee or predictor of future performance. The value of digital assets can decrease or increase, and you could lose all or a substantial amount of your purchase price. When assessing a digital asset, it’s essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.