Digital assets

Crypto markets

Understand how cryptoassets trade, how custody and wallets work, the difference between spot and derivatives, the risks involved, and what to compare when choosing a crypto platform.

Written by WiT Markets EditorialReview Editorially reviewedLast reviewed

Asset
Digital tokens or coins recorded on distributed networks.
Venues
Cryptoassets trade on centralised exchanges, decentralised venues and broker platforms.
Custody
Assets may be held by the platform or transferred to a self-custody wallet.
Pricing
Different venues can quote different prices.
Access
Spot ownership, staking and derivatives are different products.
Risk
Crypto prices can move sharply and some assets, platforms or protocols can fail.

What is a cryptoasset?

A cryptoasset is a digital record that a network of computers agrees to update. The record can represent a coin native to that network, a token issued through a program on the network, or a claim whose legal meaning depends on the issuer and the country. The technology does not give every record the same legal status.

A blockchain is one way to keep that record: a chain of blocks, each referring to the one before it. A distributed ledger is the broader idea. Copies of the record are held by many participants, and a rule decides which update is accepted. That rule is the consensus mechanism. The computers that apply it are nodes. Some of those nodes order transactions and are called validators or miners, depending on the design.

A protocol is the set of rules. A network is the set of computers running them. A smart contract is a program on the network that can hold or move assets when its conditions are met. A native asset is the coin the network itself uses, often to pay the fee for writing a transaction. A utility token is described as access to a service. A governance token is described as a vote over a protocol. Those labels are marketing and design categories. A regulator can still treat the token as something else.

  • CoinUsually the native asset of its own blockchain.
  • TokenUsually issued by a smart contract on a network that already exists.
  • ProtocolThe rules that decide which transactions are valid.
  • NetworkThe computers that store and update the ledger.
  • ConsensusThe process that picks one shared history.
  • Smart contractA program on the network. It can fail, and it does not come with a help desk.

Coin or token

The split is a practical one. It is not a legal classification, and a project can move from one form to the other.

Coin

Usually native to its own blockchain. The network uses it to pay for block space and, in some designs, to secure the chain.

BitcoinEther on EthereumEach name opens a page on that network: supply, consensus, custody and the products that only refer to the price.

Token

Usually issued through a smart contract on an existing network. The token depends on that network staying available.

Examples may include stablecoins, governance tokens and tokenised assets.

Token supply

Circulating supply

The amount described as available to trade. Definitions differ, and some balances are locked in practice.

Maximum supply

A cap written into the rules, where one exists. A cap is not a promise that the price will rise.

Issuance

New units can be created on a schedule, as a reward to validators, or by a decision of the issuer.

Vesting and unlocks

Tokens allocated to a team, investors or a treasury can become tradable on a timetable. The timetable can add supply.

Inflation

Ongoing issuance increases the number of units. It is a design choice, not a yield.

Burns

Some designs destroy units. A burn reduces a stated supply. It does not set a price.

Scarcity

A smaller supply does not establish investment value. Demand, liquidity, the legal status of the asset and the ability to sell it are separate questions.

Market capitalisation

A commonly quoted market capitalisation is price multiplied by circulating supply. It is a shorthand for size. It is not the equity value of a company, and it is not cash sitting in a treasury.

  • Thin liquidityThe last price may have been a small trade. Multiplying it by the whole supply overstates what could be sold.
  • Concentrated holdingsA few addresses can hold a large share. Their decision to sell is not visible in the headline number.
  • Illiquid tokensA listed price on a thin venue can persist with almost no volume.
  • Unlock schedulesSupply that is not circulating today can become circulating later.

How a blockchain records a transfer

A transfer starts when a wallet proposes a transaction and signs it with a private key. Nodes receive it. Validators or miners order a batch of transactions into a block. Once that block is accepted, later blocks build on it. After enough further blocks, the transfer is treated as confirmed. Finality means how hard it is to reverse that history. Some networks make reversal practically impossible after a point. Others can reorganise recent blocks.

The network fee, sometimes called gas, pays for the scarce space in a block. It is set by demand on that network. It is not the exchange’s trading commission, and it can be high when the network is busy. A platform’s own withdrawal charge can sit on top of it.

  1. Transaction initiatedA wallet signs an instruction to move or call a contract.
  2. Broadcast to the networkNodes receive the signed instruction.
  3. Validated and orderedThe network checks the signature and places the transaction in a block.
  4. Added to the blockchainLater blocks build on that record. More blocks mean a stronger confirmation.
  5. Wallet balance updatedWallets and exchanges read the new state. The transfer cannot be recalled by the sender.

How crypto prices are formed

There is no single universal Bitcoin or Ether price. Each venue keeps its own market. Two exchanges can print slightly different prices at the same moment, and in a stressed hour the gap can be wide.

Order book

A list of buy and sell orders at stated prices. A trade happens when they meet, or when a market order takes the other side.

Bid and ask

The bid is the highest current buy order. The ask is the lowest current sell order. You generally sell at the bid and buy at the ask.

Spread

The gap between bid and ask. It is a cost, even when the screen says the commission is zero.

Liquidity

How much size the book can absorb near the current price. A busy pair and a new token are not the same market.

Market depth

The orders sitting behind the best price. A large order walks through them and gets a worse average.

Slippage

The difference between the price you saw and the price you received, because the book moved or your size was larger than the best quote.

Market makers

Firms that post bids and asks. Their presence can tighten a spread. It is a business, not a guarantee that a market stays open.

Arbitrage

Buying on one venue and selling on another when prices differ. It can pull prices together. It does not remove the difference in the moment you trade.

Fragmentation

Activity is split across exchanges, brokers and on-chain venues. An average of those prices is not a price you can necessarily deal at.

Price and value

Price

What someone will currently pay on a given venue, for a given size. It is a transaction fact. It changes when the next order arrives.

Network and asset characteristics

Usage, security, the supply rules and how widely a network is used can be described separately. None of those observations is an investment value, and activity on a network does not by itself create one.

WiT View

A high market price or a large market capitalisation does not make a cryptoasset low risk. Price, liquidity, legal status and the quality of the underlying network are separate questions.

Where cryptoassets trade

A crypto exchange is a venue that matches buyers and sellers. A broker platform may offer the same names through its own contract. A decentralised venue is software. They do not create the same legal position.

Centralised exchange

  • An operator controls the platform.
  • You open an account and complete onboarding.
  • Custody is often provided by the operator.
  • Fiat deposits and withdrawals may be easier.
  • A legal entity can usually be identified.

Decentralised venue

  • You interact through smart contracts.
  • Self-custody is usually required.
  • There is no traditional central intermediary holding the order.
  • Smart-contract and liquidity risks sit with the user.
  • The legal and regulatory status may be less clear.

A decentralised venue is not the safer choice by default. It removes one kind of intermediary and introduces code, key-management and liquidity risks in its place.

Spot crypto

A spot purchase is a purchase of the cryptoasset itself. The platform may still hold it for you. In that case you have a claim on the platform’s books, and you do not personally hold the private key, until you withdraw to a wallet you control. “I bought the coin” and “I hold the key” are different statements.

Derivatives

A derivative references a crypto price. It can involve leverage, it may not confer ownership of the asset, it can carry a funding cost, and it can be liquidated. Many countries restrict who may trade these products.

Spot

You buy the asset. Withdrawal, if the platform allows it, moves the asset itself.

Crypto CFD

A contract with a broker for the change in price. You do not take the coin, and financing can apply.

Perpetual futures

A futures-style contract with no expiry. A funding payment between longs and shorts keeps it near the spot price. That payment is a cost or a credit, and it changes.

Options

A right, not an obligation, to buy or sell at a stated price. The premium can expire worthless. Availability is uneven.

Listed futures

A standardised contract on a regulated exchange, cleared under that exchange’s rules. It is still leverage, and it is still not the coin in a wallet.

Custody

Custody is the question of who can move the asset. Everything else on a platform page is secondary to it.

Custodial account

The platform controls or safeguards the private keys on your behalf. You see a balance in an account. Moving the asset depends on the platform processing a withdrawal. Convenience is higher. So is dependence on that company.

Self-custody

You control the keys through your own wallet. The platform is no longer the party that can refuse the transfer. You are the party who can lose the keys, sign the wrong transaction, or interact with a malicious contract.

Convenience

A custodial account can reset a password. A self-custodied wallet generally cannot.

Recovery

Platform recovery depends on the company’s process. Self-custody recovery depends on a seed phrase you must store yourself.

Operational risk

Both models have it. One is a withdrawal queue and an outage. The other is a mistyped address and a lost backup.

Counterparty risk

A custodial balance is an exposure to the platform. Self-custody removes that exposure and does not remove the asset’s own risks.

Security responsibility

On a platform, you still protect the login. In a wallet, you protect the key, the device and the decision to sign.

“Not your keys, not your coins”

The phrase says that a balance you cannot move with your own key is a claim on someone else. That is a fair description of custodial risk. It is an incomplete description of the alternative.

What self-custody adds

  • Seed-phrase loss.
  • A compromised device.
  • Phishing pages that imitate a wallet.
  • Transfers that cannot be reversed.
  • A backup that is missing, or stored where an attacker can read it.
  • Smart-contract interactions that drain a wallet you still control.

What platform custody adds

  • Counterparty risk.
  • Insolvency risk.
  • Withdrawal restrictions.
  • Operational failure, including a halt after an incident.

WiT View

Moving assets to self-custody does not remove risk. It changes who is responsible for managing it.

Wallets

A wallet does not store coins inside the device. It stores the keys that authorise a change to the ledger, and it shows you the balance the network reports.

Custodial wallet

The platform holds the keys. The app is a view of your account.

Self-custody wallet

You hold the keys. The app or device signs transactions you approve.

Hot wallet

Keys on a device that connects to the internet. Easier to use, more exposed to malware.

Cold wallet

Keys kept offline. Slower to use, less exposed to a connected device.

Hardware wallet

A dedicated device that signs a transaction while keeping the key off the computer. It does not protect you from approving a malicious transaction.

Seed phrase

A list of words that can recreate the keys. Anyone who has the words has the assets. A platform should never ask for them.

Private key

The secret that signs a transaction. It is not a password that support can reset.

Public address

The destination you can share. Sending to the right address on the wrong network can still lose the transfer.

Transfers

A crypto transfer needs a network, an address, and sometimes a memo or tag. The network is the chain the asset moves on. The same ticker can exist on more than one network. The address is the destination on that network. A memo or tag is an extra reference some networks require. Without it, the asset can arrive at a venue that cannot credit your account.

Confirmations are further blocks after yours. A platform may wait for several before it credits a deposit. The network fee is paid to the network. The platform may also charge its own withdrawal fee. Once broadcast, a normal transfer cannot be cancelled.

A small test transfer can reduce operational risk where the network and the amount make that sensible. It is not a universal requirement, and it does not make a wrong network safe.

Before you send

Always verify the network and the destination address before transferring crypto. Check the characters, not only the first and last. A copied address can be swapped by malware.

Stablecoins

A stablecoin is a cryptoasset designed to track a reference, usually a currency. Tracking is an objective. It is not cash, and it is not a bank deposit, unless a specific instrument in a specific country has been given that status. Most have not.

Fiat-backed

The issuer says it holds cash or short-dated instruments against the tokens. You depend on the reserves, the custodian of those reserves, and the redemption terms.

Crypto-collateralised

Other cryptoassets are locked to support the price. A sharp fall in that collateral can force sales and stress the peg.

Algorithmic structures

The design uses incentives or related tokens rather than a full reserve. Several of these structures have failed. The mechanism is not a reserve.

  • Reserve riskThe assets behind the token may be different from the description, or hard to sell at the stated value.
  • Issuer riskThe company can face a run, a freeze or an enforcement action.
  • Redemption riskThe right to swap the token for the reference currency may be limited to certain parties, or paused.
  • Depeg riskThe market price can leave the target, including on venues that still display the token.
  • Regulatory riskIssuers and the tokens themselves are being brought into payments and markets rules. That does not insure the holder.
  • Network riskThe token still moves on a blockchain. A wrong network or a halted chain is a separate failure.

Staking

Proof of stake is a way some networks choose who may add the next block. Participants lock the native asset and run, or delegate to, a validator. The network can pay staking rewards for that work. The reward varies. It is not interest, and it is not a guaranteed return.

Validator rewards

New units or fees paid for proposing and attesting to blocks. The rate changes with the network.

Delegated staking

You assign your asset to a validator you do not operate. You take their performance, their fees and, on some networks, their penalties.

Platform staking

The exchange stakes on your behalf. You add the platform as a counterparty, and the terms can include a commission and a delay on unstaking.

Lock-up

The asset may be unavailable for a bonding or unbonding period. You cannot assume it can be sold the same day.

Slashing

A penalty that reduces the staked amount if a validator breaks the rules. Delegation does not always remove it.

Earn products are not staking

Lending, yield products, decentralised-finance yield and promotional reward programmes are different contracts. Lending passes your asset to a borrower or a pool. DeFi yield passes it to a smart contract. A promotion is a marketing budget. Each can stop, and each adds counterparty or smart-contract risk that staking on the base protocol does not, by itself, contain. A headline percentage is not a reason to treat them as one product.

What crypto actually costs

A zero-commission screen can still charge you in the spread, the conversion rate, or the withdrawal. Read the interface you will actually use. Simple-buy screens and order-book screens on the same brand often use different models.

Trading fee

A maker/taker commission on an order book, often tiered by volume.

Spread

The gap built into a quoted buy and sell price. It may not appear as a line item.

Deposit fee

A charge, or a payment-provider charge, for moving fiat in.

Withdrawal fee

The platform’s charge for sending crypto or fiat out. It is separate from the network fee.

Network fee

Paid to the blockchain, and variable with demand. The exchange does not set the base demand, though it may add a margin.

FX conversion

The cost of moving between your currency and the currency the platform uses to price the trade.

Card fee

Card deposits are often priced differently from a bank transfer.

Funding rate

A periodic payment on a perpetual contract. It can be a cost or a credit, and it changes.

Liquidation fee

A charge when a leveraged position is closed by the venue.

Staking commission

A share of staking rewards kept by a platform or a validator.

Custody fee

A charge for holding the asset, more common in bank and institutional arrangements.

Platform fees

Account, inactivity or subscription charges where the agreement includes them.

Network fees

A blockchain fee is not necessarily charged by the exchange. It varies with network demand, and it can differ from the withdrawal charge shown in the app. On a busy network the fee can exceed the value of a small transfer.

Understanding crypto risk

Cryptoassets can be highly volatile. Some can become worthless. A platform, a wallet and a protocol can each fail on their own.

Price volatility

Prices can rise or fall sharply in a short period. A large market capitalisation does not make that movement small.

Liquidity risk

A quoted price may not be available in the size you want. Thin books widen the gap between bid and ask.

Exchange failure

A platform can become insolvent, freeze withdrawals, suffer a cyberattack, face enforcement or shut down.

Custody risk

If the platform holds the keys, you depend on its controls, its solvency and its ability to process a withdrawal.

Wallet loss

A lost seed phrase or a compromised device can make a self-custodied balance unrecoverable.

Cybersecurity

Phishing, fake support accounts and malware target both exchange logins and wallets.

Smart-contract risk

Code that holds or moves assets can fail, be exploited or behave differently from the description.

Stablecoin depeg

A token designed to track a currency can trade away from that value, and redemption can be delayed or refused.

Regulatory risk

Rules, permissions and the legal status of a token differ by country and can change.

Leverage

Borrowed exposure can be reduced or closed by the venue when the price moves against the position.

Token concentration

A large share of a token can sit with a few holders, a treasury or an unlock schedule.

Protocol failure

A network can halt, split or lose the users and validators that keep it operating.

Fraud and manipulation

Fake venues, inflated volumes and coordinated trading appear in this market. A familiar name is not a check.

If a platform fails

Insolvency, a withdrawal freeze, a cyberattack, legal enforcement and an operational shutdown are all plausible. Client crypto is not automatically covered by a deposit-insurance or investor-compensation scheme because a firm was registered. The outcome depends on the entity, the law of that place, and what can actually be recovered. This page does not catalogue individual failures. The pattern is the point.

Scams

Watch for

  • A promise of a fixed or unusually steady profit.
  • Fake exchanges and clone sites.
  • Celebrity promotions and social-media impersonation.
  • Recovery scams that offer to retrieve a loss for a fee.
  • Romance approaches that turn into a request to deposit.
  • Fake airdrops and unsolicited wallet support.
  • Pressure to deposit quickly, or to move the conversation off the platform.

A line that does not move

A legitimate platform or wallet provider should never ask a user to reveal a seed phrase or a private key. A message that does is the attack, including when it appears inside a familiar interface.

How regulators treat crypto

This is a map of the frameworks, not legal advice. Registration is not a guarantee of price stability, asset quality, platform solvency or an investment return. Availability and regulatory treatment vary by jurisdiction.

United States

Agencies including the SEC and the CFTC, plus state money-transmitter regimes, divide the field. Whether a particular token is a security is often a specific question, not a label you can read off the ticker. Investor.gov is the retail starting point.

United Kingdom

The FCA registers some firms under the money-laundering rules and supervises financial promotions. Registration is not the same as authorisation to carry on every investment activity. Promotions to retail consumers can require risk warnings, an appropriateness assessment, a cooling-off period and limits on incentives.

European Union

The Markets in Crypto-assets Regulation, MiCA, sets an authorisation framework for crypto-asset service providers and rules for some tokens, including certain stablecoins. It does not turn every token into a regulated security, it does not remove market risk, and it does not guarantee that a platform can meet withdrawals.

Australia

ASIC and AUSTRAC both appear in the picture. An anti-money-laundering enrolment is not a statement that the product is suitable, or that client assets are insured.

Singapore

The Monetary Authority of Singapore licenses digital payment token services. A licence is a permission to operate under conditions. It is not a view on the price of any token.

Other markets

Many countries ban, restrict or simply have not framed the activity. A brand that is visible on the internet is not evidence that it may serve your country.

Registration is not protection

A crypto platform being registered or licensed does not automatically mean that cryptoassets are covered by deposit insurance, that they are covered by an investor-compensation scheme, that losses are protected, or that a regulator has approved the tokens.

How to verify a platform

  1. Identify the legal entity that would contract with you.
  2. Check the register or licence that entity cites, on the regulator’s own site.
  3. Confirm the service is offered in your country.
  4. Read who holds the private keys.
  5. Check whether withdrawals are permitted, and on which networks.
  6. Read the fee schedule for the interface you will use.
  7. Check the supported networks before you deposit.
  8. Read the staking or earn terms, including lock-ups and what the reward is called.
  9. Find the complaint process and the body that would hear it.
  10. Ask what happens to client assets if the platform fails. If the answer is a slogan, it is not an answer.

Choosing a crypto platform

Once you understand the asset and the custody model, the next question is which platform provides the access and controls you need.

Regulation

Which legal entity would contract with you, and which permission does that entity actually hold?

Spot ownership

Are you buying the cryptoasset itself, or a derivative that references a price?

Asset coverage

Which assets are supported in your country, and which of those can actually be withdrawn?

Custody

Who controls the private keys while the balance sits on the platform?

Withdrawals

Can assets be moved to an address you control, and on which networks?

Fiat access

Which bank, card or local payment methods does that entity support?

Trading cost

Is the charge a maker/taker fee, a spread, or a mix that depends on the screen you use?

Advanced tools

Do you need order types, an API or a professional interface, and are they offered to your account?

Staking / earn

What extra lock-up, slashing or counterparty risk applies, and is the reward variable?

Country availability

Is the service legally available where you live, on the entity you would actually use?

Crypto investment and trading platforms

Named platform comparison is withheld while legal review is open. The education on this page stands on its own.

Useful crypto tools

These calculators are general. They do not quote a token and they do not suggest a position.

Position size

Turn a loss you can accept into a position size before using leverage.

Open tool

Risk and reward

Compare the loss at stake with the result the position needs.

Open tool

Compound return

See how a rate compounds. The figure is arithmetic, not a forecast of a token.

Open tool

Fee drag

See how a recurring charge changes a result over time.

Open tool

Related reading

Questions readers ask

What is a cryptoasset?

A cryptoasset is a digital record that a network of computers agrees to update. It may be a coin native to a blockchain, a token issued by a smart contract, or a claim whose legal meaning depends on the issuer and the country. The technology does not give every record the same legal status.

What is the difference between a coin and a token?

A coin is usually native to its own blockchain, such as bitcoin or ether. A token is usually issued through a smart contract on a network that already exists. The split is a practical description, not a legal classification.

What is a blockchain?

A blockchain is a shared ledger built from blocks that refer to the block before them. Nodes check transactions, and validators or miners order them. A confirmation is a later block built on top. Finality is how hard that history is to reverse.

What is a crypto exchange?

A crypto exchange matches buyers and sellers of cryptoassets. A centralised exchange is a company that usually also holds client assets. A decentralised venue is software you use from your own wallet. A broker may offer a derivative on the same price instead of the asset.

What is spot crypto?

A spot purchase is a purchase of the cryptoasset itself. If the platform keeps custody, you still do not hold the private key until you withdraw to a wallet you control.

What is a crypto CFD?

A contract for difference pays the change in a crypto price. You do not take the asset, leverage may apply, and the broker is your counterparty. Financing can apply if the position stays open.

What is a wallet?

A wallet holds the keys that can authorise a change to the ledger, and it shows the balance the network reports. A custodial wallet leaves the keys with a platform. A self-custody wallet leaves them with you.

What is a private key?

A private key is the secret that signs a transaction. Anyone who has it can move the asset. It is not a password that a help desk can reset.

What is a seed phrase?

A seed phrase is a list of words that can recreate a wallet’s keys. Anyone with the words has the assets. A platform or wallet provider should never ask you to reveal it.

What is self-custody?

Self-custody means you control the private keys. It removes the platform as the party who can freeze a withdrawal. It makes you responsible for the seed phrase, the device and every transaction you sign.

Can I move crypto off an exchange?

Often, for selected assets and networks, and only where the platform and your country allow it. A listed asset is not automatically withdrawable. Check the network, the address and any memo before sending. A transfer cannot be reversed.

What is staking?

Staking locks a proof-of-stake asset so a validator can take part in the network. The network may pay a variable staking reward. That reward is not interest and it is not a fixed return. Lock-ups and slashing can apply.

What is a stablecoin?

A stablecoin is a cryptoasset designed to track a reference, usually a currency. Tracking is a target. Reserves, the issuer, redemption terms and the market price can all fail. It is not cash unless a specific instrument has that legal status.

What is a network fee?

A network fee pays for space in a block. It varies with demand on that blockchain. It is separate from an exchange’s trading commission and can also be separate from the platform’s withdrawal charge.

Why do Bitcoin prices differ between exchanges?

Each venue has its own order book. There is no single official price. Liquidity, fees and local demand differ, so two exchanges can quote different prices at the same time.

Are crypto platforms regulated?

Some entities are registered or licensed for particular activities in particular countries. The permission is specific. A registration under money-laundering rules is not the same as authorisation to carry on every investment service.

Does regulation protect me if a platform fails?

Not automatically. Registration does not mean cryptoassets are covered by deposit insurance or an investor-compensation scheme, and it does not mean a regulator has approved the tokens. Recovery depends on the entity and the law that applies.

How do I compare crypto platforms?

Compare the legal entity, whether you receive the asset or a derivative, who holds the keys, whether you can withdraw, the fee model on the screen you will use, and whether the service is offered where you live. Asset count is a weak guide.

Which crypto platform is available in my country?

Availability is set by the legal entity and by local rules, not by the brand’s advertising. Check the provider’s own eligibility page and the regulator’s register. A visible website is not permission to onboard you.

Sources and review

Sources and review

Written by: WiT Markets Editorial. Writes and structures WiT Markets pages. Separates a sourced fact from a cell that is Not confirmed.

Review: Editorially reviewed. This is not a qualified specialist review and it is not a legal sign-off.

Last reviewed: . Next review due . The date is an editorial pass. It is not a live check of every third-party fee.

Regulatory and official sources

Methodology. Editorial policy. Corrections. Report an error.

Provider legal and product pages are cited on each comparison card in the review view. They are not repeated here while that comparison is withheld from the public site. Research method, editorial policy, risk disclosure and corrections are published separately.

Crypto markets: custody, wallets and how platforms differ | WiT Markets