Several aspects of exchanges and brokers to see why crypto brokers can be better than exchanges if done right!
It is especially noticeable in the Australian crypto community that exchanges are considered far superior to brokers. This couldn’t be more wrong. Swyftx has set out on a mission to re-define crypto brokering in Australia (with sights set globally) in a way that makes it faster, cheaper and more liquid with a wider range of assets and pairs, all traded on a modern platform with advanced order executions. These are big claims, so how do we do it?
Exchanges pair buyers and sellers using an order book which records the prices that each trader wishes to exchange at. When the buyers and sellers agree on a price or meet in the middle, an exchange happens.
Brokers monitor the market and act on instruction from their customers to buy or sell based on an estimate or quoted price that is generated from live market conditions.
The key here is that if a broker only has customers willing to buy, they can still function and fill orders, whereas exchanges must have a somewhat equal amount of buyers and sellers to function well. A broker could operate with one customer or one million customers (regardless of market direction) however an exchange with very few users would fail.
What does that mean and why does it matter? Cryptocurrency daily trade volumes amount to approximately 17 billion and are tiny compared to the Fiat Forex markets that trade over 5 trillion across the same time span. For every asset that is bought or sold, regardless if its crypto or other, it needs to have someone to sell to or buy from. The more people buying and selling, the more liquid an exchange is considered (Binance being one of the biggest exchanges, makes it one of the most liquid). With more liquidity comes lower spreads (difference in price) between the buyers and sellers and less slippage (cost of buying/selling into the order book or buyers and sellers). Every time a new exchange opens, it must populate all its trading pairs with buyers and sellers, this further distributes the trading liquidity from existing exchanges, causing bigger spreads and more slippage.
Swyftx has begun solving this problem by using smart order routing to distribute buys and sells across a range of top 100 cryptocurrency exchanges, starting with the most liquid first. Swyftx’s combined order book liquidity has the potential to be more than 10 times that of Binance. Every time a trade is made on Swyftx, the platform looks to see where the most liquidity exists for that asset and then splits the order across those exchanges to ensure the best market rate, lowest spreads and minimal slippage. Its important to realise that although brokers do charge a higher fee for being the “middle man” in facilitating trades, there is a lot more to consider than just the trade fee. Depending on how much you’re trading, you’ll likely be better off even with the slightly higher fees, saving on slippage and spreads (incredibly important for managing risk).
Many traders and investors regularly struggle with managing their account balances between different exchanges, either that, or they limit themselves to the crypto-assets available on their preferred exchange. It can become very difficult keeping track of profits and losses, as well as what balances are available to trade and where. Services like Coinigy have attempted to help remedy this issue, however, still fall victim to manual movement of balances, and confusion on trading pairs, meaning missed opportunities and headaches.
Through the corporate partnerships that Swyftx has formed, it is able to bring together assets that trade on different exchanges into one simple unified trading platform. Not only that, but Swyftx manages account balances behind the scenes for you, meaning you can trade any asset for any amount any time.
A unique advantage that Swyftx can offer through its brokerage is the ability to trade any of the listed crypto assets (170+) against any of the listed base pairs (USD + BTC) without suffering any liquidity losses. At the time of writing that amounts to over 60 tradable pairs. This isn’t feasible on an exchange because every pair E.g. BTC/NEO or USD/NEO, has its own order book, which means less and less liquidity for each asset for each pair that is introduced. Having the ability to trade all assets against USD (with the same liquidity) is a great way to help manage risk and unify trades.
To be a successful trader you need easy to use, reliable and accessible tools at your finger tips. It is common knowledge that professional traders and investors should always put high importance on managing risk. These tools and risk management strategies can be difficult to manage as no two exchanges have the same interfaces and hardly any have easily accessible risk management capabilities.
Swyftx simplifies the trading experience and UI into one platform with support for Stop, Limit and Market orders at launch. This means easy risk management and faster order execution. Additional order types like OCO combined with position management are just around the corner. The Swyftx Trading View charts offer a wide range of timeframes and are available on every asset for both USD and BTC pairs.
Balances are available to be viewed and tracked in USD or Bitcoin and will soon be available with Blockfolioesk reporting and tracking, embedded directly in your trading screen.
Support for fiat deposits and withdrawals within the platform means less accounts, faster deposits, less fees and easier to track. Swyftx generates tax invoices and statements for tax purposes automatically and all in one place.
If you want to trade like a professional, manage risk, simplify your processes, trade/deposit/withdraw on one platform and save on fees/spreads then you need an account with Swyftx.