What is A Crypto Marketplace? How Does It Work?
With over 420 million global users, cryptocurrency is no longer a growing financial trend, but a global phenomenon that has taken the world by storm.
Words like Bitcoin and Ethereum are no longer strange to the average person, and this is a testament to cryptocurrency penetrating deeply into everyday people, including the non-tech-savvy ones.
Typically, buying and selling cryptocurrency is facilitated by centralized and decentralized exchanges, which, for a fee, facilitate transfers, sales, and swaps of crypto assets. These exchange prices automatically publish prices from a cryptocurrency’s order book, which automatically sets prices based on the supply and demand rate.
Cryptocurrency marketplaces, on the other hand, offer a new approach to buying and selling crypto assets. Like a real-world marketplace, sellers can list prices, and buyers can possibly negotiate them, allowing both buyers and sellers to get a fair deal.
In this article, we’ll extensively discuss what a crypto marketplace is, how it works, and how you can enjoy the best possible values on crypto marketplaces. Let’s dive in!
What is A Crypto Marketplace?
To fully understand the concept of a crypto marketplace, one must first understand the concepts of a market and a digital marketplace.
A market is a place where people gather to buy and sell commodities; a trader displays their items, buyers negotiate the prices, and they both reach an agreement for the transaction to be successful.
A digital marketplace steps it up a notch by creating online platforms where buyers and sellers can meet without any geographical constraints to transact over a product or service and get the best possible deals.
A crypto marketplace is a digital marketplace where buyers and sellers transact over cryptocurrencies without having to use spot markets on crypto exchanges.
For example, if it will cost Jack 3,200 to get 1 ETH in the spot market, and someone is willing to sell for 3,000 ETH in the marketplace, it is a no-brainer to get it settled on the marketplace and get better deals.
How Do Cryptocurrency Marketplaces Work?
Like every other digital marketplace, cryptocurrencies are not sold directly by the marketplace operator/platform. Instead, the cryptocurrencies to be sold will come from third-party sellers, mostly individuals like you.
So, when a seller lists the cryptocurrency to be sold, it will be publicly available for buyers to make a bid. If there is room for negotiation, buyer and seller may briefly negotiate, but otherwise, the buyer will be required to make payment, which will automatically be deducted from the buyer’s balance and sent to the seller’s balance. Similarly, the platform automatically deducts the crypto from the seller’s balance and credits the buyer.
Crypto marketplace platforms usually charge a small fee for this process; hence, on average, crypto marketplaces could be cheaper than spot markets on exchanges.
Why Do People Use Cryptocurrency Marketplaces?
You may wonder; with an automated spot market on several centralized exchanges, where buying and selling is quite seamless, why do people trade on crypto market places?
Below are four of the most important reasons:
To Trade Coins That Do Not Have Liquidity: Cryptocurrency marketplaces provide an avenue for trading coins that may lack sufficient liquidity on traditional exchanges. Liquidity refers to the ease with which an asset can be bought or sold without affecting its price. Some lesser-known or newly issued cryptocurrencies might not have enough buyers and sellers on major exchanges, making it difficult to trade them without significant price changes. Crypto marketplaces allow users to connect directly with other individuals who might be interested in buying or selling these less liquid coins, facilitating trades that might otherwise be challenging.
To Enable Beginner Buying and Selling of Cryptocurrencies Only Listed on Decentralized Exchanges: Many new cryptocurrencies launch first on decentralized exchanges (DEXs), which are often more complex and require a higher level of technical knowledge to be used effectively. Hence, beginners in the cryptocurrency world may find buying these new assets a herculean task, as these DEXs can be intimidating due to their user interfaces and the need for managing private keys and wallets. Crypto marketplaces simplify the process by offering a more user-friendly platform where beginners can easily buy and sell cryptocurrencies, even those that are exclusively listed on DEXs. This accessibility lowers the barrier to entry for new users who want to start trading without navigating the complexities of decentralized platforms.
To Easily Buy and Sell Coins During Highly Volatile Periods: Cryptocurrency markets are known for their volatility, with prices capable of fluctuating dramatically within short periods. During these times, traditional exchanges might experience congestion, slow transaction times, or even temporary outages.
Crypto marketplaces offer an alternative where users can swiftly buy and sell coins, often with more flexibility and speed. This agility is crucial during periods of high volatility, allowing traders to take advantage of price movements or mitigate potential losses more effectively than they might be able to on congested exchanges.
Traders Can Get Potentially Better Deals Due to the Possibility of Negotiation: One of the significant advantages of using cryptocurrency marketplaces is the potential for traders to secure better deals through negotiation. Unlike regular centralized exchanges, where prices are determined by the current market rate and order book dynamics, crypto marketplaces often allow buyers and sellers to communicate directly. This direct interaction opens up the opportunity for negotiating prices, which can result in more favorable terms for both parties. For instance, a buyer might be able to convince a seller to lower the price slightly, or a seller might find a buyer willing to pay a premium for quicker settlement. This flexibility can lead to more advantageous transactions compared to the fixed pricing mechanisms on traditional exchanges.
Enables people to trade even without KYC: Know Your Customer (KYC) regulations require users to verify their identities before they can trade on many cryptocurrency exchanges. While these regulations are important for preventing fraud and ensuring compliance with legal standards, they can also be a barrier for some users who value privacy or have difficulty providing the necessary documentation. Crypto marketplaces often operate with fewer restrictions, allowing users to trade cryptocurrencies without undergoing the KYC process. This anonymity appeals to individuals who prioritize their privacy or are in regions where accessing KYC-compliant platforms is challenging.
What To Look Out For Before Choosing A Crypto Marketplace
Security Features: Security should be a top priority when choosing a crypto marketplace. Look for platforms that offer robust security measures such as two-factor authentication (2FA), encryption, and other contemporary security mechanisms. Additionally, research the platform's history to check for any past security breaches and how they were handled.
Fees and Charges: Different marketplaces have varying fee structures. Most will charge transaction (buying/selling) fees, and others may charge listing fees and withdrawal fees. It is important to understand the fee schedule of your chosen platform and compare costs with the average industry amount to ensure that the fees are reasonable and align with your trading needs. As you already know, lower fees will help you save money and, inadvertently, lead to higher net returns on your trades.
User Interface and User Experience: A user-friendly interface can significantly enhance your trading experience. Choose a marketplace that is easy to navigate, offers clear instructions, and provides useful tools and resources for trading. Also, platforms with mobile apps can offer additional convenience for trading on the go.
Liquidity: High liquidity ensures that you can quickly buy or sell cryptocurrencies without causing significant price fluctuations. Although cryptocurrency marketplaces aren’t so common, you can still get a marketplace with decent transaction volume and a broad user base to ensure you can easily trade your desired cryptocurrencies.
Supported Cryptocurrencies: Ensure the marketplace supports the specific cryptocurrencies you are interested in trading. Some platforms offer a wide range of cryptocurrencies, while others focus on a limited selection. Make sure the marketplace meets your trading preferences and needs.
Customer Support: Good customer support can make a significant difference, especially if you encounter issues while trading. Look for platforms that offer multiple channels for customer service, such as live chat, email, and phone support. Check if they have a reputation for responsive and helpful support teams.
Cmarket - Your Ideal Cryptocurrency Marketplace
Cwallet, a multi-functional crypto platform, has now launched its crypto marketplace - Cmarket.
How To Buy and Sell on Cmarket
Trading cryptocurrencies on Cmarket is pretty easy. All you need to do is:
From the dashboard, locate the marketplace button and select it
For Buying:
To buy cryptocurrencies, look through the list of available offers, which will be automatically listed from cheapest to most expensive. Select one by clicking “buy,” confirm your selection, and your payment method will automatically be deducted.
For example, if you intend to buy MATIC via the marketplace, and the seller quotes the price in USDT, then you must have the equivalent USDT in your Cwallet balance, as it will be deducted for the transaction to be successful.
If you do not have sufficient balance for the chosen payment method, you’d need to top up your Cwallet balance for a successful transaction.
For Selling:
To sell cryptocurrencies on Cmarket, you’d need to list your desired cryptocurrency, set your price per dollar (per USDT), and authorize the transfer from your wallet to the marketplace, so that if a buyer places a bid, they can be credited, while you get the equivalent USDT amount.
Why Use Cwallet’s Cryptocurrency Marketplace - Cmarket?
The Cwallet marketplace, Cmarket, offers several advantages for buyers and sellers alike.
By offering an automated peer-to-peer experience, buyers can easily select their best option from a list of sellers, incentivizing sellers to always put forward their best prices. Also, sellers can easily list cryptocurrencies, even ones without huge liquidity and get it swiftly sold at the click of a button.
With a transaction fee of only 0.3%, users can be sure of getting the best rates, even when compared with the cheapest spot market fees.
So, whether you intend to trade meme coins, newly listed unpopular coins, or any other coin difficult to find on traditional exchanges, you can contact Cwallet support to request a listing, and if your request has enough traffic, it will immediately be available on the Cwallet marketplace.
Cmarket offers ease, flexibility, and optimal availability for trading cryptocurrencies. Get started now!
