What is broker?

A platform that lets you buy and sell crypto at a quoted price rather than on an open order book.

Brokers are simpler than exchanges but usually charge a wider spread. Some apps, such as those from traditional finance companies, are brokers even though they look like exchanges.

The distinction is who you trade with. On an exchange you trade with other customers and the venue takes a fee. With a broker you trade with the broker, which quotes you a price and keeps the difference between that price and what it pays elsewhere. Both are legitimate; only one shows you what it earned.

How it works

A broker sources liquidity from exchanges, market makers, or its own inventory, then republishes a price to you with a margin built in. You accept or decline a quote rather than placing an order into a book.

That margin is the business model. Some brokers charge a visible commission on top; many charge nothing visible and take the entire fee in the spread, which is why a zero-fee headline can still be the more expensive option.

Order types are limited. Books support limit order, stop, and time-in-force options because there is a queue to join. A quoted price has no queue, so brokers typically offer market buys, recurring buys, and occasionally a simple limit that is really an internal trigger.

Custody varies. Some brokers hold the asset for you and never let you withdraw it on chain, which makes your position a claim on the broker rather than a coin you can move. Others support withdrawal like an exchange. This is the single most important thing to check before funding an account.

Regulatory treatment differs by country, and a firm licensed as a broker for securities is not automatically permitted to handle crypto.

Example

Illustrative comparison of a $1,000 purchase.

Illustrative figures. Actual fees and spreads vary by venue, asset, and order size; check each provider's own schedule.

Why it matters when you buy

A broker is often the easiest place to make a first purchase and rarely the cheapest place to make a hundredth. The cost is real but invisible, so comparing on headline fees will point you the wrong way. Compare total cost including spread at the fee comparison and check what each venue offers at the exchange directory.

Related terms

• exchange — order-book venue where you trade with other customers
• spread — where a broker usually earns its margin
• instant buy — the quoted-price flow exchanges also offer
• market maker — the firms brokers source prices from
• custodial — who actually holds the asset
• order book — what a broker does not give you access to

Questions

Is a broker safe to use?

Safety depends on the firm's licensing, custody arrangements, and financial position rather than on the model. A regulated broker in your jurisdiction can be a reasonable choice; the model itself is neither safe nor unsafe.

Why is a zero-commission app more expensive?

Because the cost moves into the spread. You get a worse price rather than a visible fee, and the difference is frequently several times what an exchange would charge.

Can I move crypto bought from a broker to my own wallet?

Only if the broker supports on-chain withdrawal. Several well-known consumer apps do not, or restrict it heavily, so check before funding.