There are two main types of platforms for crypto trading. These are brokers and exchanges. Both brokers and exchanges offer users a platform to buy, sell, and trade digital assets. However, these trading platforms differ in terms of features, services, and operational methods.
What is a crypto broker? Brokers are like intermediaries between buyers and sellers. They set the price of digital currencies without the need for price agreements between purchasers and sellers. Exchanges are platforms for crypto trading where buyers and sellers can interact directly. Changes in supply and demand determine the prices of assets.
In this article, we will take a closer look at the differences between crypto exchanges and brokers.
What is a cryptocurrency exchange?
A cryptocurrency exchange is an online platform for crypto trading where users can sell, purchase, and trade digital currencies directly between themselves.
Prices on these websites are set by real-time market forces—supply and demand. This results in constant price fluctuations. Exchanges typically have lower transaction fees than brokers, but they typically have more complex interfaces. Here, users have to contend with trading pairs, order books, and market charts.
Examples of crypto exchange platforms
Below are some examples of popular exchanges. By the way, if you want to start your own crypto exchange, we at Peiko have a white-label solution with which you can launch your platform in 3 weeks.
- Binance One of the premier CEX (centralized) crypto exchanges with a massive selection of digital currencies to trade. Traders have access to sophisticated features like futures and staking.
- Coinbase A popular crypto exchange with 8 million monthly transacting users that allows customers to buy, sell, and store cryptocurrencies. The platform supports both simple and sophisticated trading, catering mainly to beginners in terms of ease of use.
- Kraken With its safety and vast asset selection, Kraken offers advanced trading capabilities and spot and futures trading options.
What is a crypto broker?
A cryptocurrency broker is a site or service that enables people to buy, sell, and exchange cryptocurrencies.
Similar to the case of stock brokers, crypto brokers act in the middle, facilitating transactions between traders and the wider crypto world. Users don’t buy cryptocurrency directly from the exchange—they buy it from brokers, who source the assets from exchanges or liquidity providers.
Comparing brokerage vs exchange, the crypto-broke sites are more simplicity-focused, offering a less complex interface than most exchanges. Hence, these platforms are more appealing to beginners or newcomers to the crypto trading universe. Below, you can see what characterizes a crypto broker.
Examples of platforms with broker-like services
Let’s consider some of the prominent examples of platforms that offer cryptocurrency broker services.
- eToro Operates as a broker platform with fixed spreads. Clients don’t own the underlying cryptocurrency unless it is deposited into a different wallet. It’s best for new investors or recreational traders.
- Robinhood (crypto) Provides a simple, broker crypto trading experience where assets are bought and sold at fixed prices. But customers don’t take ownership of the physical digital coins.
- Revolut A mobile bank app that enables users to buy cryptocurrencies at fixed prices, without touching market order books—fairly similar to a brokerage model.
Main differences between crypto exchanges and crypto brokers
Plan to create your own crypto project? It is vital to understand the core distinctions comparing crypto exchange vs broker. Both platforms offer access to crypto, but they serve different user needs, use cases, and have different technological models.
Below is the summary of the crucial distinctions of what characterizes a crypto broker and a crypto exchange. This table will help you choose the best model for your crypto project business plan and target group.
| Aspect | Crypto exchanges | Crypto brokers |
| Operation mode | Peer-to-peer websites where users trade directly with each other. Prices of assets are market-determined | Work as intermediaries, executing trades for users at fixed prices. Sometimes offer advisory and portfolio services |
| Pricing and fees | Apply transaction, deposit, or withdrawal fees, typically based on trading volume | Charge commissions or apply a markup to the asset price |
| Security | Encryption, two-factor authentication (2FA), and cold storage, but with a greater risk of hacking because of high liquidity. Some are insured | Use cryptographic encryption, two-factor authentication, and cold storage. Generally safe for single users |
| User experience (UX) | Advanced trading tools and more control, but a steeper learning curve for newbies | Easy-to-use and clear interfaces with customer support |
| Ownership of assets | Users typically hold direct ownership of crypto and can transfer crypto assets to their external wallets | Users may not fully own the assets unless they move them to a personal wallet. But this depends on the broker’s policy |
| Regulations | Varies by jurisdiction. May require licenses such as VARA (UAE), MSB (FinCEN, U.S.), CASP (MiCA, EU) to offer trading and custody services | Regulated as financial service providers. May need brokerage or investment licenses (SEC/FINRA, RIA in the U.S., or CASP under MiCA in the EU) |
| Target group | Convenient to newcomers, skilled traders, institutions, and those searching for full control over trading strategies | Ideal for newcomers in crypto or retail investors |
Selecting the crypto exchange: When it makes strategic sense
Crafting a cryptocurrency exchange involves creating a full-fledged trading ecosystem in which users trade directly amongst themselves on an order book. This requires a more sophisticated backend, compliance system, and liquidity management than with crypto brokers.
However, constructing a crypto exchange does provide an excellent foundation for scaling and attracting a greater and more active user base.
When considering building a crypto exchange
A reliable crypto trading platform will bring both high-volume activity and repeat engagement from users. If you approach the development process with proper planning, you will obtain great profit from this business project.
1. You aim to offer full-featured trading tools
Building a crypto exchange is your best choice if you want your platform to include advanced reading tools. Exchange enables different order types such as market, limit, and stop orders. Real-time charting and price discovery through peer-to-peer trading are also included in the functionality.
2. Liquidity will be a core part of your business model
Exchanges operate by relying on active buyers and traders. How to support high liquidity? Implement the internal market-making, external liquidity integrations, or user incentives.
3. Target audience is traders with experience or institutional users
Professional traders are looking for real-time market depth, high-performance APIs (application programming interfaces), and other modern features. For beginners, it’s important to implement simpler interfaces or guided onboarding processes that help them get used to the platform with confidence.
4. You are ready to ensure top security measures
For users to trust your platform, you should integrate secure wallet management systems, such as hot and cold wallets, using platforms like Fireblocks. You should also use correct custody procedures and add transaction monitoring tools.
5. You should support fiat on and off ramps and diverse trading pairs
Users expect to be able to convert between crypto and fiat or trade across various asset pairs. This means you should establish banking and liquidity partnerships.
6. Be prepared for strict regulatory obligations
If you want to operate legally, it is vital to consider registration under digital asset or securities frameworks, especially if custody and fiat services are involved.
Essential strategic considerations
Below are the key strategic areas you’ll need to plan for when transforming your crypto exchange idea into a viable product.
- Technology It is essential to integrate a trading engine, wallet service, KYC (know your customer), and AML (anti-money laundering) modules. Also, ensure a scalable backend.
- Compliance Expect local licensing, transaction monitoring, and potentially legal classification as a financial service provider.
- Monetization Revenue comes from trading fees, asset listing fees, and services like staking or margin trading.
Choosing the broker model: Business-oriented view
Creating a crypto brokerage platform provides you with pricing and execution control of trades. Comparing crypto broker vs exchange, broker doesn’t match buyers and sellers in real time but instead enables users to transact directly with the platform. This arrangement is typically more user-friendly for the general user.
When is it worth crafting a cryptocurrency broker platform
Below, we list the main cases where it is worth creating a crypto broker platform or a platform with broker-like services.
1. The platform is intended for beginner users
Сrypto brokerages provide a seamless, simplified crypto trading experience. It is ideal for mobile apps or retail-focused financial platforms.
2. You want to control transaction pricing
Brokers internally determine buy/sell prices and generate revenue through spreads, rather than relying on dynamic market activity.
3. The product does not require advanced order matching
A crypto currency broker avoids traditional order books, enabling you to skip building a full trading engine.
4. You’re integrating crypto into an existing product
The model fits well into existing fintech apps, neobanks, or investment platforms that would wish to offer crypto but don’t have to be a full exchange.
5. You’re not ready for complicated regulatory rules
Brokers are typically licensed under existing financial services law, especially if they do not hold user funds or offer leverage.
Main strategic considerations
Here are the key factors to consider when planning your crypto brokerages infrastructure.
- Liquidity sourcing Brokers typically source liquidity from third-party exchanges or aggregators to fill user orders.
- Asset custody You may hold customer assets centrally or use custodial partners—depending on your security and legal strategy.
- Revenue model The profit comes from spreads, transaction fees, or embedded pricing in fiat conversion prices.
Launch a crypto exchange in 3 weeks with a white-label solution
Building a crypto exchange from scratch is a costly and time-consuming process. But the Peiko team has a better option. Use our white-label crypto exchange solution and run your platform within 3 weeks. It’s an affordable and effective way to launch a feature-rich and reliable exchange. By the way, you will have complete code control and flexibility to make changes.
Our solution has everything your users need for smooth trading: real-time spot and market orders that execute in milliseconds.
The solution features a powerful matching engine, a user-friendly Order Book, and many other tools for traders. For example, TradingView’s real-time candle charts help users navigate the market easily and make the best financial decisions. All these guarantee a fast and efficient trade experience.
A significant consideration for any new exchange is liquidity support, so we connected our solution to Huobi and B2C2. These are two leading liquidity providers. This ensures that liquidity is never an issue, and the trading process will be seamless. If more liquidity is required, our experts will integrate additional providers to further support your crypto platform.
Furthermore, our platform is built with the highest security standards in mind. It features Fireblocks custody integration, two-factor authentication, and KYC verification using SumSub, providing total regulatory compliance. Blockchain fee validation before withdrawals and user profile customization provide that extra layer of convenience and security.
Let’s consider other important features of our modern crypto exchange platform:
- Over 52 pre-integrated trading pairs. New pairs can be integrated in under a minute.
- No internal trading fees for your users, just Binance.
- Full compatibility with AWS, Google Cloud, and Azure for horizontally scalable deployment.
- Horizontally scalable backend architecture with a fully customizable codebase.
- Admin access to platform settings, fees, and commission rates.
To create an exchange from scratch, you will need up to two years, but with our solution, the development is much quicker and cost-effective.
Moreover, the whole cryptocurrency exchange platform launch process is typically 5 to 6 times less expensive than tailored development.
Conclusion
If you have to choose between developing a crypto currency broker and an exchange, it’s essential to understand the difference between them. A broker platform is an intermediary between purchasers and traders. Here, users can buy and sell cryptocurrencies at fixed prices. Usually, top crypto brokers offer a simpler, more beginner-friendly experience.
A crypto exchange enables users to trade directly with one another, with prices driven by market supply and demand. Comparing broker vs exchange, exchanges offer traders more flexibility and control over the assets.
Want to launch your crypto exchange and start attracting users? Peiko’s white-label solution is a great option if you want to launch a crypto exchange quickly. With our ready-med solution, you can go live in just 3 weeks. There are no long development cycles and high costs.
Contact us today to start building your advanced platform with Peiko!
FAQ
On exchanges, people can trade with each other at market-driven prices. A broker sells or purchases crypto at a set price. Brokers are more convenient to use for newbies in crypto. But crypto exchanges provide more complex trading features.
It is a cryptocurrency exchange. This popular and reliable crypto trading platform allows users to trade assets with one another at prevailing market prices.
No. Crypto exchanges are sites where users can trade with each other. The costs of assets are influenced by supply and demand fluctuations. Crypto brokers are intermediaries that set their own prices.
Coinbase, Kraken, and Gemini are the top crypto exchanges in the US. These platforms have strong regulatory standing, advanced trading functionality, and a wide user base.
Coinbase Prime, Galaxy Digital, and BitGo Prime are the largest crypto prime brokerages. These platforms provide users with trading, custody, and institutional services.
