Cryptocurrency is a localized digital currency that runs on blockchain technology. It only exists online and is not controlled by any one person or government. Instead, cryptocurrencies are run on an open-source, peer-to-peer (P2P) network maintained by all the users. The most popular cryptocurrencies include Bitcoin, Ethereum, Ripple, NEO, Stellar Lumens, etc. Trading these coins for other cryptocurrencies or fiat currencies like US dollars can be done in cryptocurrency markets worldwide.
Cryptocurrency markets should not be confused with fiat currency traditional trading markets such as the Australian Dollar. Cryptocurrencies are a new kind of asset that exists on the internet and are traded using different exchanges and marketplaces worldwide.
However, there is some overlap between cryptocurrency and fiat currency markets. They operate using supply and demand ideas and sometimes involve similar traders or investors.
How Are Prices Set?
Prices for cryptocurrencies like Bitcoin, Ethereum, XRP and others are set by the price at which people are willing to buy them from sellers (buy orders) vs how much other people want to sell them (sell orders). These prices can change every second based on what people want to pay for them.
Traders use cryptocurrency exchanges to trade cryptocurrencies using different fiat currencies (dollars, pounds, euros etc.). The price that a cryptocurrency is bought or sold on exchange depends on the market value of each coin. It also depends on how many people want to buy and sell them. Some exchanges allow you to use other forms of currency such as Bitcoin or Ethereum and fiat currencies like the US dollar. So these prices may not necessarily be tied directly to those fiat currencies.
Coin Exchanges vs Marketplaces
The primary difference between cryptocurrency markets and traditional markets is that they operate via P2P networks, and there is no primary place where all trading or investment occurs. For example, there is no major stock exchange for cryptocurrencies – instead, you can trade them at different marketplaces around the world. However, most of these exchanges and marketplaces require a cryptocurrency called Bitcoin or Ethereum as a form of payment to use their platform.
The more major exchanges exist in any one country, the easier it will be to buy and sell different currencies on those platforms. Cryptocurrency exchanges can also facilitate peer-to-peer trading by matching buyers and sellers together via an open order book system (like buying stocks).
So How Do They Work?
The price of cryptocurrencies like XRP relies on supply and demand. If you can only trade them at one specific marketplace, the price will be set by those selling coins. However, if you can access several different marketplaces and use those places to buy and sell coins, you can take advantage of buying and selling opportunities wherever they exist.
Cryptocurrency exchanges usually have their website interface with other trading websites such as forex or stock exchange sites. New traders can use these exchanges because the general layout is familiar. For example, most cryptocurrency exchanges include graphs that show historical pricing data, which mimics what you would see on a traditional exchange like the ASX (Australian Securities Exchange).
Where Can You Trade Cryptocurrencies in Australia?
Buying, selling and trading most cryptocurrencies can be done on the following platforms with Australian dollars:
Cryptocurrency exchanges like Saxo Bank are generally only available to higher volume traders (people who will buy large amounts of coins at once). They allow you to deposit, withdraw and trade currencies but don’t allow you to take out cash or transfer money into your traditional account. This means that they essentially work like an exchange that allows P2P trading where the price is based on buying and selling opportunities rather than an open order book system.
This cryptocurrency exchange permits you to buy, sell, and trade different types of cryptocurrencies. Coinjar enables you to link your account directly to a bank so you can deposit or withdraw money easily using BPAY. You can also place limit or market orders for buying or selling coins similar to traditional stock exchanges like the ASX (Australian Securities Exchange). Coinjar also offers dedicated wallets for each currency it supports, allowing users to store their coins securely in one place. This makes it easier for new traders who are not used to managing multiple wallets per currency at once.