Back to Basics: Exchange Rates
by Liz Windsor
The more we all pushed for crypto to be adopted by the masses and brought under the eye of the general public, the easier it became to buy, sell, and exchange cryptocurrencies. The days of mining your own bitcoin or meeting up with someone and handing over cash in a dark alley behind a Starbucks are behind us. Thanks to pioneers all over the world, you now have the tools you need to step out the door and join your fellow bitcoiners, no sweat.
Welcome to the wide wide world of Bitcoin. Ready to get started?
Back to Basics
Today’s topic is cryptocurrency exchange rates.
You already know there are a lot of options for exchanges out there, but maybe now you’re having a difficult time deciding which exchange you want to use to trade crypto-to-crypto.
There are factors like which assets are offered, which region you are in, what kind of Know Your Customer (KYC) or Anti-Money Laundering (AML) regulations are in place, what kind of trading fees are charged, and more. You can check out this article about Trezor’s in-wallet exchanges to find out how our partner exchanges combined with the Trezor Wallet environment tackles these factors and resolves significant security issues like phishing attempts.
But the focus of this article is on another aspect of using cryptocurrency exchanges: exchange rates.
Fluctuating rates?
If you go on a couple exchange sites, you’ll see something interesting: the exchanges don’t always offer the same price. When it comes to cryptocurrency, the rates are constantly fluctuating due to changes in the market; this results in something called a floating rate.
What’s causing those changes to happen? One factor is supply and demand: the number of trades happening on each exchange. If an exchange has a lower number of trades happening then the demand is low, and the value of the cryptocurrency drops. The higher the demand, the more the value increases, and the price of your fave cryptocurrency will go up.
With Bitcoin, for example, there is no set price determined by a governing authority or backed by some other commodity or currency. The price of Bitcoin is largely based on trading.
What does this mean for you?
Because the exchange process takes time, and because the price is constantly fluctuating, the price could change in the middle of your trade, and you’ll receive less — or more — than the amount you expected.
For example, you spend 50 USD, and the exchange tells you that you’ll get .0049 BTC — with a notice that this is a float rate and the amount can change due to market fluctuations. When you check your account half an hour later, you see that you actually received .0045 BTC.
But wait…
There’s also something called a fixed rate, where the offer you see in the exchange is exactly how much you will receive in your account after the trade has processed. If you want to spend 50 USD and the exchange tells you that you’ll receive .0049 BTC, then that’s how much you’ll get. It’s fully transparent!
The slight hitch here is that the fixed rate you get from the exchange is most likely going to be a lower rate than what you might get from the float rate offers. On the other hand, with the fixed rate offer, you know immediately what you’re getting. You don’t have to worry about any market fluctuations affecting you while you wait for your trade to finish, no matter how drastic they might be.
So who’s offering fixed rates?
Well, a better question is: Who’s offering fixed rates, a secure environment, a good reputation, and a smooth user interface? And the answer is: Trezor Wallet.
Our in-wallet exchanges are the most secure way to trade crypto — and now, thanks to our very first partner, Changelly, you can get a fixed rate for your trade so you’ll know exactly how much you’re getting. Take the guess-work out of trading and trade with Trezor Wallet’s in-wallet exchanges. One-stop shop, no stress.
There’s more…
Did you know Trezor Wallet’s in-wallet exchanges were getting brand new features? Today, fixed rates; tomorrow, a brand new interface that lets you conveniently and easily buy bitcoin and other cryptocurrencies. Well, you know…not TOMORROW tomorrow…but soon™! It won’t be too long before you’ll be able to buy crypto from the comfort and safety of Trezor Wallet.
About Us
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