The crypto market is at its most diverse, with more than 21,000 cryptocurrencies available by the end of September 2022 and counting. In fact, new crypto projects, coins, and tokens are being launched nearly every day. This provides more options for investment, trading, peer-to-peer (P2P) transactions, digital payments, and long-term value storage as well as made crypto swapping and crypto exchange more necessary than ever to the crypto community.
What Is Crypto Swap?
A crypto swap allows users to conveniently and directly exchange a specific cryptocurrency for its equivalent value in another cryptocurrency. This means there’s no intermediary in the process, so you don’t have to convert a cryptocurrency to a fiat currency first before you can convert it to another currency.
For instance, in the Kasta app, a crypto payment platform that allows you to swap cryptocurrency without high fees, you can directly convert 1 Bitcoin (BTC) for its equivalent value in the $KASTA token, without needing to convert BTC to U.S. Dollar first, or even using a stablecoin like Tether (USDT).
What Is Crypto Exchange?
The term crypto exchange can mean several things in the crypto space. It can refer to a platform that allows you to buy, sell, or trade crypto (e.g., ByBit), or it may also refer to the process of trading crypto itself.
Crypto Swap vs. Crypto Exchange: What Sets Them Apart?
Some people think crypto swapping and crypto exchange are the same—even using them interchangeably—but as you can see, they serve different purposes.
The value of your crypto
Crypto swapping allows users to easily convert crypto assets, which means you get the equivalent value of your crypto in another coin or token, minus the swap fees that the platform you use may require. On the other hand, crypto exchange is for trading a cryptocurrency for another coin, token, or fiat currency based on its current market value. Therefore, you can increase the value of your assets by selling crypto at a higher price, or buying the other crypto when the price is low.
Why people swap or exchange crypto
Users usually swap crypto to preserve losses, diversify assets, take advantage of earning opportunities, or use a specific type of crypto to buy or avail of something that only accepts that specific coin or token as payment (e.g., swapping BTC for Ethereum (ETH) to buy a non-fungible token (NFT) that only accepts ETH as payment). Meanwhile, users exchange crypto with the hope of increasing one’s earnings.
Trading pairs
A crypto exchange usually involves trading pairs, which means you can only trade assets using the pairs available in the trading platform (e.g., BTC/USDT). Crypto swapping doesn’t require trading pairs, which means you can directly swap one crypto for another as long as they’re available in the swap platform you will use.
The Bottom Line
Swapping and exchanging crypto may sound the same, but they follow different processes and are developed for different purposes. A crypto swap is for fast and easy crypto conversions, while a crypto exchange is for buying or selling assets with the intent to increase the value of your crypto holdings.
