Glossary · Crypto
Crypto exchange
A crypto exchange is a marketplace where people buy and sell cryptocurrencies for dollars or for each other, run either by a company or by code on a blockchain.
Also called: cryptocurrency exchange, CEX, DEX, decentralized exchange, crypto trading platform
Built from trades on many exchanges, at the close of November 11, 2026.
In plain words
To buy shares you go through a broker to a stock exchange. To buy bitcoin, most people open an account at a crypto exchange: send in dollars by bank transfer or card, place an order, and the exchange matches you with someone who is selling.
Most trading happens on centralized exchanges (CEXs): companies that hold their customers’ money and coins and keep an order book of bids and offers. Decentralized exchanges (DEXs) are programs on a blockchain: you trade straight from your own wallet against a pool of coins, with no company holding your money.
A stock market splits the jobs among separate firms: the exchange, the broker, the bank, the custodian. A crypto exchange often does them all at once. That is convenient, and it is also where most crypto disasters have happened.
Example
Buying and selling $500 of bitcoin
- You deposit $500 and buy at once. The best offer in the order book is, say, $80,000 a bitcoin and the best bid $79,960: the gap, the spread, is $40, or 0.05%.
- You pay the offer: $500 buys 0.00625 BTC, minus a trading fee of 0.5%, which leaves 0.00621875 BTC.
- The coins show in your account, but they sit in the exchange’s wallet: you hold its promise to hand them over. Withdrawing to your own wallet costs a network fee.
- Sell straight back and you get the bid: 0.00621875 × $79,960 = $497.25, minus another 0.5% fee: $494.76.
A round trip cost about $5, 1% of the money, without the price moving at all.
One level deeper
When an exchange holds its customers’ coins, everything depends on it keeping them. Mt. Gox, which handled most bitcoin trading in 2013, collapsed in February 2014 after losing about 850,000 bitcoins to theft and mismanagement. FTX, one of the largest exchanges, went bankrupt in November 2022 after customer deposits had been used for other purposes; its founder was later convicted of fraud.
Since then many exchanges publish proof of reserves, showing the coins they hold. It helps, but it shows assets rather than debts, and only on the day of the check.
Prices differ a little from one exchange to another; trading firms buy where a coin is cheaper and sell where it is dearer, which keeps the prices close. The prices on this site are Coin Metrics reference rates, built from trades on many exchanges.
Why it matters
Exchanges are the on-ramp: most people get their first coins on one, and most trading passes through them.
They concentrate risk: hacks and failures of exchanges have cost customers far more than flaws in the blockchains themselves.
Their fees and spreads quietly eat into returns, especially for people who trade often.
A common mistake
Myth: Coins in my exchange account are mine, like money in a bank.
In fact: Legally they are often a claim on the exchange, and there is usually no deposit insurance for crypto. When FTX failed, its customers became creditors in a bankruptcy and waited more than two years for their first repayments.
Questions people ask
What is the difference between a centralized and a decentralized exchange?
A centralized exchange is a company: it holds your funds and matches orders, and you need an account and usually ID. A decentralized exchange is software on a blockchain: you trade from your own wallet and nobody holds your money, but mistakes and bugs are yours to bear.
Why do I have to show ID to buy crypto?
In most countries, exchanges that handle customers’ money must follow anti-money-laundering rules, so they check identities, as banks do.
Are crypto exchanges safe?
Some have run for years without major losses; others failed or were hacked. Their safety depends on how they hold customers’ coins, how they are regulated and audited, and on your own account security.
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About the numbers
- The numbers on this page are recalculated from the data every night; the sources are listed at the end of the page.
- Bitcoin price: Coin Metrics Community Network Data, metric PriceUSD. License: CC BY-NC 4.0.
- Crypto data: Coin Metrics Community Network Data, used under the CC BY-NC 4.0 license.
- This page explains a term. It is not investment advice.