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Today, more people than ever before are trading online. This is especially true when it comes to cryptocurrencies where the interest has surged to unprecedented levels in the past year.
Unfortunately, many traders are not taking the proper safety precautions when trading, and too many rely on untrustworthy trading platforms. To help combat this issue, we’ve dedicated the following guide. This explains why trading apps offered by online brokers is the safest option for cryptocurrency traders.
What Is an Online Broker Trading App?
Let’s start by defining what’s considered an online broker trading app.
This type of trading app is an app that’s developed and offered by an online broker. Furthermore, an online broker offers trading opportunities on a range of different assets such as stocks, forex, commodities, and, cryptocurrencies.
Many of the assets are offered as derivatives, for example, CFDs on stocks or indices. But most brokers also offer cryptocurrencies in their true form. There are even brokers with their own crypto wallets. We are going to walk you through the benefits of using an online broker in just a second.
we just wanted to explain the concept first.
In case you’re interested in learning more about the best brokers out there, we suggest you check out expert recommendations. There are many brokers available today but only a few are considered trustworthy enough to be used. Some of them have even developed software that has won prizes – see more in this list.
Are Broker Apps Really Safer?
So why are these apps the safest option for cryptocurrency trading?
Well, the answer is easy and all we have to do is compare an online broker to a cryptocurrency exchange.
cryptocurrency exchanges offer great trading opportunities and platforms but they are still quite a bit behind in terms of safety. This is mainly due to two things: lack of regulation and lack of experience.
Experience and Regulation
While most cryptocurrency exchanges haven’t been around for more than a few years. There are online brokers operated by world-leading trading companies with 50+ years of experience.
Secondly, the online trading market, especially in Europe, is tightly regulated and overseen by regulatory bodies such as the Financial Conduct Authority in the UK (FCA), and the Cyprus Securities and Exchange Commission (CySEC).
Subsequently, this means that brokers are forced to ensure the highest levels of security for their customers, platforms, and trading apps.
Not convinced yet? Just contemplate why so many crypto exchanges have been hacked in the past 5 years and why no broker has been hacked or had any funds stolen in the same time period.
Based on this alone, it is obvious why trading apps operated by brokers is a safer option than apps operated by cryptocurrency exchanges. We’re not claiming that this will always be the case, but until regulation and the exchanges themselves catch up with the rest of the trading industry, the safest option is clear.
Another great benefit of trading apps is that they support other assets as well. That means you can trade cryptocurrencies as well as thousands of other assets ranging from stocks to bonds, with the same app and platform.