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3 Reasons Why You Should Use a Broker To Buy Cryptocurrency

It is nearly impossible these days to scroll through your social media
news feed without seeing a headline about cryptocurrency. The global phenomenon that is blockchain technology has swept the world in a relatively short time and impacted most global communities.

The recent approval by US regulators to allow Bakkt to launch a Bitcoin backed futures exchange is a clear sign that Bitcoin is here to stay. 
New users that are looking for the best place to purchase Bitcoin for
investment purposes or to use as a payment system digital currency are likely to open up Google and just go with the first cryptocurrency exchange that appears in their country.

Quote:This is a big mistake.
Beginners should always conduct their own research and the most popular exchanges are not always the best place for them to buy cryptocurrencies.
This article will outline 3 reasons why you should consider using a broker instead of an exchange to buy cryptocurrency.
#1 Greater Liquidity Pool
For every asset that is bought or sold, whether it is cryptocurrency or forex, needs to have someone to sell to or buy from. The more people buying and selling, the more liquid an exchange is considered. 
When a new cryptocurrency exchange opens, it must populate all of its trading pairs order books with buyers and sellers to provide a market for its users to trade.
This distributes the trading liquidity from existing exchanges that can negatively affect smaller exchanges that you might be currently trading with.
Cryptocurrency brokers can avoid this problem by monitoring the market and acting on instruction from the trader to buy or sell based on an estimate or quoted price.
By using distributing buys and sells across the highest liquidity exchanges in the world, the broker is able to increase its combined order book liquidity for the particular asset.
Quote:This means its users are able to trade cryptocurrency assets with maximum available liquidity.

#2 Reduced Spread and Slippage Fees
A common mistake is selecting a new cryptocurrency exchange based on its low trading only. This might seem like an attractive proposition and logical decision to maximise a fiat deposit in exchange for more cryptocurrency.
Quote:However, cryptocurrency exchanges with low liquidity in the order book will result in high spread and slippage fees that will eat into your funds.
Some brokers can distribute buys and sells across the most liquid cryptocurrency exchanges (such as Binance) to identify where
the highest liquidity is for that particular asset and split the order across
those exchanges.

Traders using brokers benefit by getting the best market rate, lowest spread and minimal slippage that can increase profitability in the long run.
#3 Increased Cryptocurrency Pairs to Trade
Being stuck in an altcoin trade and not being able to get a fill can be a common problem on exchanges that offer 100 or 200+ tradable assets.
Depending on the daily trade volume, cryptocurrency pairs on exchanges will have their own order book for each asset against fiat (e.g. USD) and also Bitcoin (BTC). This means less and less liquidity is available on the
exchange that results in higher spread and slippage charges for the asset

Cryptocurrency brokers ability to offer assets without liquidity losses is a major advantage. Not only does this mean lower spread and slippage fees, users are able to use a single cryptocurrency broker trade, manage their crypto portfolio and store assets in the one location without having to register with multiple exchanges to trade. 
If you’re looking to purchase Bitcoin or other cryptocurrencies, we
would recommend doing thorough research of the company before hand to check spread and slippage fees associated with low liquidity order books. There is an alternate option to the deception, manipulation, hyper-inflation and high spreads by greedy cryptocurrency exchanges.

The solution is to find a reputable cryptocurrency broker that provides
better market rates and lower fees that will increase profitability in the long run as Bitcoin continues its rise in global adoption.

Author Bio
We aim to bring awareness and education to the digital currency space for beginners. For more information, visit us at hedgewithcrypto and leave a comment.
the task is ours