What is a cryptocurrency broker?

A cryptocurrency broker is a middleman between the buying party (you as a consumer) and the cryptocurrency exchange. In some cases, a broker buys large amounts of cryptocurrency and offers them on their own platform. Lately, we see more and more brokers that do not hold stock, but automatically place the consumer’s order on an exchange. Nowadays, we increasingly see exchanges also offering a simple broker portal alongside their advanced trading platform. This has made the difference between a broker and an exchange smaller. The process looks like this:

1. You place an order through a broker.
2. The broker places an order on the exchange after payment.
3. The exchange delivers the coins to the specified wallet.

A broker generally charges higher fees than exchanges, but in return you get an easy-to-use system, payments via bank transfer, Wero, credit card and other simple methods, plus good customer support. Our advice is to choose a broker if you are not planning to trade frequently. At a broker you generally get your own wallet and everything is set up simply with clear explanations. If you plan to trade actively, we recommend using an exchange. With platforms like Bitvavo you can easily switch between the simple broker portal and the advanced exchange, so you always have the right interface for your level.

What is the difference between a broker and an exchange?

A broker focuses mainly on beginning traders, people who choose convenience or people who want to make a one-time investment. Buying cryptocurrency through a broker is generally much easier and very user-friendly. On an exchange, you first need to understand how trading works, which can be quite complicated at the start. On top of that, exchanges often do not offer easy payment methods like bank transfer. However, more and more platforms now offer both a simple and an advanced interface. Bitvavo, for example, offers a simple broker portal as well as an advanced exchange with order books. Bybit EU also has a simplified interface alongside its full trading platform.

What are the advantages of a broker?

• At a broker you can buy cryptocurrency without any prior knowledge. On an exchange, this is often not the case.
• At a broker you can pay with easy payment methods such as bank transfer, Wero or credit card. On an exchange, this is often not possible.
• At a broker you get support via email or chat. Exchange support is often more limited.

What are the disadvantages of a broker?

• Trading fees at a broker are generally higher than on an exchange. You pay for convenience and service.
• The selection at a broker is usually smaller than on an exchange.
• An exchange has more functionalities, such as staking, limit orders, stop losses or margin trading.

What are examples of brokers?

• Bitvavo: Is both a broker and an exchange. Through the simple portal you can easily buy crypto, while the advanced interface lets you trade with order books. More than 440 cryptocurrencies available at a maximum of 0.25% trading fees. Deposits are free via bank transfer and Wero. Holds a MiCA licence and DNB registration.
• Bybit EU: Offers a simplified interface for beginners alongside the advanced trading platform. More than 140 cryptocurrencies available with a MiCA licence from Austria. Payments via bank transfer, Wero and credit card.
• OKX: International exchange with a simple buy option and 150+ cryptocurrencies. MiCA licence from Malta. Free payments via bank transfer and SEPA.

Note: always choose a platform with a MiCA licence. This ensures the exchange complies with European regulations, applies mandatory KYC verification and that your funds are better protected.