What is spot trading?

Dear Global Bitgetters,

Spot trading is the act of buying and selling an asset at the current market price for instant delivery, i.e. the immediate transfer of asset ownership. In general, traders utilise spot trading to yield profits from daily market movements through a combination of several small transactions.

Crypto spot trading is available on centralised trading platforms (CEXs), decentralised exchanges (DEXs), and in OTC markets. Newbies can practise spot trading in a simulated environment with TradingView Paper Trading to get a real feel for the market. Please note that crypto trading takes place 24/7 - we are the market that never sleeps.

CEXs

Despite the rapid evolution of Decentralised Finance (DeFi), CEXs remain enormously popular due to the high level of liquidity and security. CEXs use the order book system to match bid and ask price, which means the more orders there are, the more liquid the market is. CEXs also provide fiat-crypto trading pairs and act as the guarantee for the completion of transactions. They are especially beginner-friendly - most individual investors made their first crypto transactions “on-ramp” or, in simpler terms, with their credit cards. Bitget is one major crypto spot trading with 2 million users, ranking 3rd in terms of liquidity.

DEXs

Advocates of decentralisation prefer DEXs because they are not custodial. Wallet owners keep their own private keys and their personal information - no KYC compliance is required. There are two types of DEXs, the ones with an order book system (LoopRing, Gnosis Protocol or IDEX) and the ones with the innovative automated market makers. DEXs can list more trading pairs as the listing process is not as demanding as with CEXs.

However, some problems with DEXs include blind signing (unknowingly contract approvals), lack of liquidity and slippage, that is, the price difference between the price you submit and the price confirmed on the blockchain.

Bitget Team