What can crypto exchanges learn from stock exchanges?

crypto exchange learn from stock exchange

Crypto and stock exchanges are both very popular among traders. In fact, comparing cryptocurrency exchanges with the entire stock market is incorrect – these are different categories. But to understand the features of the cryptocurrency exchanges and understand how they differ from their counterparts is very necessary.

Basic concepts

Stock market

This is a financial system within which participants make transactions with securities. Among the objects of the modern stock market are stocks, bonds, credit agreements, as well as some types of contracts. Such as options and futures.

The securities market has a long history, during which the rules have changed and honed. To ensure interaction between participants, exchanges operate. They have numerous tasks that are: providing a platform for conducting operations with securities: issue, sale and resale, regulation of exchange trading, control of openness and compliance with the rules of exchange trading, providing guarantees and arbitration, development of a code of conduct and standards.

Stock markets, in general, do not offer any specific bonuses, unlike other exchanges such as forex. The latter, which is also a very popular system provides various deposit and no deposit bonuses to its clients. Most recently, South Africa has become a country, which is trying to adopt softening measures towards forex traders. The deposit bonus in South Africa which has been adopted lately, shows the difference between forex and stock exchanges. Even though the latter seems to be more popular, it does not provide any decent rewards.

Cryptocurrency market

This is an innovative financial system whose objects are exclusively digital assets: cryptocurrencies and tokens of ICO projects. Gradually developing, the cryptocurrency market acquires some features similar to the stock. For example, now it is also possible to work with futures and options on it.

The cryptocurrency market is much younger than the stock market; its settlement is still in the process. On the one hand, this provides participants with more freedom and anonymity; on the other hand, it causes high risks.

There are also exchanges here – trading platforms that allow participants to transact with digital assets: issue tokens, sell and buy cryptocurrencies, enter into futures and options contracts.

Both classic and cryptocurrency exchanges charge a service fee. They are also similar in their purpose – they provide tools for conducting operations with assets. The most interesting thing is the differences.

How cryptocurrency exchanges differ from stock exchanges?

It is impossible to work with cryptocurrencies on stock exchanges, and securities transactions cannot be made on cryptocurrency exchanges. This is the main, but not the only difference. There are other differences too.


To perform operations on the stock exchange, one must have an impressive starting capital and special accreditation. Or work through licensed brokers who also have to pay a commission.

Cryptocurrency exchanges are available to everyone directly, without licenses and accreditations. You can start work with a very moderate deposit. Even $10 is enough to buy several crypto coins.

The ability to make high profits through volatility

The rise in the price of securities usually occurs slowly. This means that to work on the stock exchange, you need either a lot of money at once or a lot of patience.

The cryptocurrency market is highly volatile. Although it decreased several times compared to the peak of 2017, exchange rate fluctuations still allow you to make a profit on intraday trading. That is, with a good strategy, there is a chance to get a lot right away.

True, there is a high risk of volatility quickly losing all assets. Therefore, we must act on a balanced trading strategy, setting for ourselves the rules of maximum risks and minimum profit.

What can crypto exchanges learn from its counterpart?

The obvious thing that comes to mind is regulations. Crypto exchanges lack regulation, while stock exchanges are a specific set of rules; everyone should obey. Without regulations, many problems arise, which are very hard to handle.

While both are very risky, it should be pointed out that crypto exchanges are full of them and stock markets are relatively safe in terms of having a supervising board, and they have backing from a government.


Cryptocurrency exchanges are similar to stock exchanges in that they are also trading platforms. But they allow you to operate only with digital assets: cryptocurrencies and tokens of ICO projects.

Because the cryptocurrency market is much younger than the stock market, it is worse regulated, and this explains its high risks. This is why classic traders may encounter difficulties immediately after switching to the digital side – many tricks used in the crypto that is tested on the stock exchanges do not work.

At the same time, cryptocurrency exchanges have apparent advantages. In essence, they do not need special accreditations and impressive amounts of funds to manage, and due to high volatility, you can get big and quick profits.