Types of Crypto Exchanges: A Quick Guide to How They Differ
Not all crypto exchanges work the same way. Here's the difference between spot and futures trading, and custodial vs. non-custodial platforms.
"Crypto exchange" covers a wider range of platforms than the term suggests, and Bitval itself spans more than one of the categories below. Here's how the main types differ, so you know what you're choosing between.
Spot Exchanges
A spot exchange lets you buy or sell an asset for immediate delivery at the current market price. This is the most straightforward form of trading: you exchange currency for an asset, or an asset for currency, at today's price. Most beginners start here.
Futures and Derivatives Platforms
Futures trading involves contracts based on an asset's future price rather than the asset itself, often with leverage involved. This carries more risk than spot trading and requires a firmer grasp of how positions, margin, and liquidation work before getting involved. Bitval offers both spot and futures markets, spot fees at 0.12% maker / 0.145% taker, and futures fees at 0.03% maker / 0.06% taker.
Custodial vs. Non-Custodial Platforms
On a custodial exchange, the platform holds your assets on your behalf, similar to how a bank holds deposited funds. This is convenient for active trading since assets are ready for your next order. A non-custodial or decentralized exchange instead lets you trade directly from a personal wallet, meaning you hold your own private keys the entire time. Custodial platforms are generally easier to use; non-custodial platforms put more control, and more responsibility, in your hands.
Centralized vs. Decentralized
This distinction overlaps with custody but isn't identical. A centralized exchange is operated by a company that manages the order book, matching, and account verification. A decentralized exchange runs primarily on smart contracts, with trades executed peer-to-peer or through liquidity pools rather than a central operator. Centralized platforms tend to offer more features, support, and liquidity; decentralized platforms trade some of that for reduced reliance on a single operator.
Why the Distinction Matters
Choosing the right type of platform depends on what you're trying to do. Someone buying and holding an asset has different needs than someone actively trading futures positions. Knowing which category a platform falls into, before comparing fees or features, makes the rest of the decision easier. If you want to see a platform that covers both spot and futures markets under one account, you can explore Bitval's markets here.
This article is for informational purposes only and does not constitute financial or investment advice.
