What is a cryptocurrency exchange?
Cryptocurrency can be sent without the intervention of a third party, like a bank. If you want to find another person who wants to trade your Bitcoin for a different coin, this can be quite a challenge. Fortunately, exchanges were created to solve this problem. A cryptocurrency exchange brings crypto buyers and sellers together on one platform. Both buyer and seller can choose the price themselves. When the amounts match, the exchange executes the trade and the transaction is final. On an exchange, supply and demand are brought together. You pay trading fees on an exchange, which usually range between 0.05% and 0.25% per transaction.
Examples of popular exchanges with a MiCA licence are:
What are the disadvantages of an exchange?
There are several disadvantages to an exchange. Exchanges are very vulnerable to hacks, simply because there is a lot of money to be stolen. Hackers actively try to hack exchanges.
In 2025, a new record was broken: more than $2.7 billion in crypto was stolen. The biggest hack ever was the Bybit hack in February 2025, where North Korean hackers stole $1.4 billion in Ethereum by manipulating the transaction interface of a third-party service. The question is whether an exchange has enough liquidity to pay back its users. Bybit was ultimately able to absorb the losses, but with smaller exchanges this is far from guaranteed. On top of that, it should be clear that on an exchange you are not the official owner of the wallet. You do not manage the private keys yourself. This means you depend on the security of the exchange.
In the crypto world, the saying goes: “Not your keys, not your coins.”
Want to fully manage your own crypto? Then a hardware wallet is the safest option. Furthermore, an exchange does not contribute to the original idea of Bitcoin. It is generally a centralised company with a profit motive. They have a large influence on the market, which takes away the decentralised nature of Bitcoin. Nowadays, decentralised exchanges (DEXs) also exist, such as Uniswap, where you manage your own private keys. The downside is that these are often more complex to use and less suitable for beginners.
Governments and regulation
Regulation has undergone enormous development in recent years. Since the introduction of the MiCA legislation (Markets in Crypto-Assets) in Europe, exchanges must meet strict requirements. This includes mandatory KYC verification (Know Your Customer), holding reserves and transparency towards users. This has resulted in some exchanges, like Binance, having to cease their activities in certain European countries. At the same time, it offers users better protection.
Exchanges with a MiCA licence, such as Bitvavo, Bybit EU and OKX, comply with European regulations and therefore provide a safer trading environment. We welcome this regulation. It contributes to the maturing of the market and better protects consumers against fraud and abuse.
What is the difference between an exchange and a broker?
This is a frequently asked question by visitors. As mentioned earlier, an exchange searches for a buyer and a seller. A broker only sells cryptocurrency. Simply put, they place an order on an exchange, add fees on top and sell it to the customer. The advantage of a broker is that you can often pay with easy payment methods like bank transfer, Wero or credit card.
Bitvavo is both a broker and an exchange, for example. Here you also trade at a maximum of 0.25%. Bitvavo also offers free deposits via bank transfer and Wero, and supports more than 440 cryptocurrencies.
Navigation
