What Is a Crypto Exchange and How Does It Work?

A crypto exchange is a venue where buyers and sellers of crypto meet through a shared order book.

The exchange collects orders: some want to buy at a price, others to sell. Matching orders execute, and the rest wait in the order book. The largest centralised exchanges are Binance, Bybit, OKX and Coinbase.

There are decentralised exchanges (DEX) as well, such as Hyperliquid and Uniswap. No company holds your funds; a smart contract or the exchange's own chain executes trades, and every operation is public.

Exchanges offer spot trading (buying the coin itself) and futures (contracts on the price, often with leverage). Futures are what create liquidations and funding.

See it on In-Crypto

BTC order book heatmap across four exchanges Funding rates by exchange

More terms

Token Blockchain Stablecoin Trading Spot vs futures Margin trading Leverage Long and short Short squeeze Liquidation Stop-loss and take-profit Limit vs market order Market maker Crypto whale Altcoin Perpetual futures DeFi and DEX

Frequently asked questions

How is an exchange different from a swap service?

A swap service sells at its own rate; on an exchange participants' orders set the price and you trade with other people.

What is a DEX?

A decentralised exchange: no company in the middle, trades settle on-chain and funds stay in your wallet until execution.