How do I swap crypto? How It works? Complete Guides 2024

swap crypto Once you have bought a cryptocurrency or digital asset with fiat, the world of swapping crypto for crypto opens up to you. Unlike buying or selling crypto, swapping does not access traditional financial rails since fiat currencies are not involved.

How Does swap crypto work?

Crypto swapping involves directly exchanging one cryptocurrency for another, without needing to convert it to fiat currency first (like US dollars). It’s a streamlined way to trade crypto assets. There are two main ways to swap crypto:

Centralized Exchanges (CEXs):

• These are platforms like Coinbase or Binance where you create an account and deposit your crypto.
• They act as intermediaries, matching your swap order with another user who wants the crypto you’re giving up.
• CEX swaps are generally faster and easier to use, especially for beginners.
• However, they may have higher fees and require you to surrender control of your crypto while it’s on the exchange. swap crypto

Decentralized Exchanges (DEXs):

• DEXs don’t rely on a central authority. Instead, they use smart contracts to automate crypto swaps directly between users’ wallets.
• This offers greater security and privacy since you never relinquish control of your crypto.
• DEX swaps can be more complex to use and may have lower liquidity (fewer users buying and selling), which can affect the exchange rate you get.

Here’s a simplified breakdown of the swapping process:

1. Choose your platform: Centralized Exchange (CEX) or Decentralized Exchange (DEX).
2. Select your crypto pair: Specify the crypto you’re giving up and the one you want to receive.
3. Initiate the swap: Confirm the amount and agree to any fees.
4. Exchange happens: The platform facilitates the exchange based on its mechanism (matching orders on CEX or using smart contracts on DEX).
5. Receive your new crypto: The swapped crypto gets deposited into your wallet (on CEX) or stays in your own wallet (on DEX).

Remember: Crypto swapping carries some inherent risks, like price volatility (the value of your crypto can fluctuate during the swap) and potential scams (be cautious about unfamiliar platforms).

Why should I swap from one crypto to another?

There are many reasons why you might want to swap from one crypto asset to another. swap crypto

swap crypto to smart contract enabled chain

Some blockchains like Bitcoin have a primary focus as a financial instrument, while smart contract enabled chains such as Ethereum enable decentralized apps (DApps). Using DApps opens up the wide world of DeFi. Swap on DEXs, earn yield or take out a loan on crypto lending platforms, purchase NFTs on NFT exchanges, and much more. Read about the many DeFi use cases below.

swap crypto to a lower transaction fee chain

Ethereum is the most popular chain, but can have high transaction fees compared to other low-fee EVM compatible chains such as Avalanche and Polygon. Transaction fees become important when using DeFi applications, since each transaction can easily cost tens of dollars.

Diversify your portfolio

Many users simply want to have a well diversified portfolio. Investing in both digital gold and digital cash while keeping some reserves in stablecoins allows users to feel like they don’t have all of their eggs in one basket.

swap cryptoto a stablecoin

Other users might simply want to escape the volatility of cryptocurrency. BTC, ETH, and other cryptoassets prices change every minute of every day. There is no market-open or market-close like in traditional stocks, as trading taking places 24h per day, 7 days per week.

If the price recently went up a considerable amount, some users may want to lock in those gains by swapping from BTC into USDT or USDC. Stablecoins such as USDT and USDC are pegged to the US dollar, allowing users to escape the volatility of crypto in place of the wider perceived stability of the US dollar.

If the price is going down, some users may also worry the price will continue to go down further. Stablecoins provide the fastest way to make your personal choice whether to escape volatility or not.

Key points to consider when swapping between cryptocurrencies

There are two main points to consider when swap crypto

1. Platforms/venues
2. Where your crypto goes

Platforms/venues for swapping crypto include digital wallet providers, centralized spot exchanges, decentralized exchanges, OTC desks (private ‘Over-The-Counter’ exchange services used primarily by high-net-worth individuals), peer-to-peer marketplaces, and even payment apps like PayPal.

As for where your crypto goes after you swap it, the options are:

Into a crypto wallet you control (ie. a ‘self-custodial’ wallet like the multi-chain Bitcoin.com Wallet app)

Into a crypto wallet someone else controls (eg. a centralized crypto exchange or a payment app like PayPal).

Not your keys, not your coins!

When you hold crypto in a wallet you control (known as a ‘self-custodial’ or ‘non-custodial’ wallet), you never have to ask for permission to use it. This means you can receive your crypto without waiting for a third party like a centralized exchange to approve the transaction. It also means you can send your cryptoassets wherever you want, whenever you want. swap crypto

By contrast, many custodial crypto wallets impose severe restrictions on what you can do with your crypto. For example, you may be asked to register an address before sending crypto to it, and you may be required to wait several days before being allowed to make a withdrawal. In some cases, withdrawals of any kind are simply not permitted. It’s also not uncommon to have your account frozen altogether. If you’ve been deemed a security or fraud risk, for example, you may be locked out of your account with no recourse to action.

The best self-custodial crypto wallets also enable you to customize the ‘network fee’ each time you send. This means you can save money on transaction fees when you’re not in a rush, or pay more to send faster when you are.

Perhaps most importantly, self-custodial crypto are more secure. As long as you maintain key management best practices, you’ll never have to worry about getting hacked, nor will you be exposed to counter-party risks like a centralized exchange getting hacked or going bankrupt.

If you don’t have a crypto wallet yet, we encourage you to consider the multi-chain Bitcoin.com Wallet app. It’s the easy-to-use, self-custodial crypto wallet trusted by millions. swap crypto

What are the fees for swapping cryptocurrency?

Fees for swapping crypto depend on the payment method and platform/venue used. For example, if you’re swapping on a decentralized exchange, you’ll need to consider the ‘network fee’ for transacting on the blockchain plus the fee for using the exchange. Decentralized exchanges tend to have the lowest fees for using their services.

Beyond that, exchange services charge additional fees for facilitating trades. In general, you’ll pay lower overall fees for larger trades, so it often makes sense to avoid making many small trades.

Ways to swap cryptocurrency

Having gone through the basics of swapping crypto, let’s look in more detail at the methods and processes.

Swap crypto:

There are two main avenues for swapping cryptocurrency:

1. Centralized Exchanges (CEXs):

• Pros:
  • Faster and easier to use, particularly for beginners.
  • Generally higher liquidity, meaning you’re more likely to find a counterparty for your swap crypto quickly.
• Cons:
  • Often have higher fees compared to DEXs.
  • You relinquish control of your crypto while it’s on the exchange, introducing security risks if the exchange is hacked.
  • May require Know Your Customer (KYC) verification to use their services.

2. Decentralized Exchanges (DEXs):

• Pros:
  • More secure and private since you retain control of your crypto throughout the swap crypto process.
  • No KYC verification typically required.
  • Potentially lower fees than CEXs.
• Cons:
  • Can be more complex to use compared to CEXs.
  • Lower liquidity can sometimes lead to less favorable exchange rates.
  • More susceptible to scams due to the unregulated nature of some DEXs.

Here’s a table summarizing the key differences:

• With the multi-chain Bitcoin.com Wallet app
• From the Bitcoin.com website
• From a centralized crypto exchange
• Use a decentralized exchange

Swapping cryptocurrency with the multi-chain Bitcoin.com Wallet app

Cryptocurrency wallets allow you to swap crypto assets conveniently from within the wallet app, and the Bitcoin.com Wallet app is no exception. Importantly, the Bitcoin.com Wallet app is fully self-custodial. This means you’re always in complete control of your crypto. Here’s the process for swapping crypto using the Bitcoin.com Wallet app app: swap crypto

1. Open the Bitcoin.com Wallet app app on your device.
2. From the app’s home screen, tap the “Swap” button (it’s at the top right and the bottom left of the home screen).
3. Select the assets you want to swap. For example, swap from Bitcoin (BTC) → Ethereum (ETH).
4. Input the amount you’d like to swap. You can enter the amount in the “swap from” or “swap to” asset.
5. Select the wallet for the asset you’d like to swap into. For example, if you’re swapping into Ethereum, you may want to receive it in your “My Ethereum Savings” wallet.
6. Tap on, “GET QUOTE” button. swap crypto
7. Check the details and slide the “Slide to Swap” button to confirm.

A push notification and alert in app will let you know when the swap is confirmed. The time it takes to complete a swap depends on the assets being swapped. For example:

BTC → ETH takes approximately 10 minutes.

ETH → USDT takes less than a minute.

These times are estimations and may vary significantly if the public blockchains are experiencing congestion.

Swapping cryptocurrency via the Bitcoin.com website

You can swap crypto from the Bitcoin.com website.

Here’s the process for swapping from our website:

1. Login to your Bitcoin.com account on the main webpage.
2. On the left hand side menu click on “Swap.”
3. Select the assets you want to swap. For example, swap from Bitcoin (BTC) → Ethereum (ETH).
4. Input the amount you’d like to swap. You can enter the amount in the “swap from” or “swap to” asset.
5. Change the “swap from” or “swap to” wallets by clicking on “Change.” For example, if you’re swapping into Ethereum, you may want to receive it in your “My Ethereum Savings” wallet.
6. Click the “Swap Preview” button. A popup will reveal a QR code, and below that a crypto address with a copy icon.
7. If on mobile:

Tap the copy icon to save the address to your clipboard. Open the Bitcoin.com Wallet app app and tap “Send.” Tap the asset you are swapping from, for example Bitcoin. Paste the address from your clipboard.

If on your desktop or laptop:

Open the Bitcoin.com Wallet app app and tap the QR code scanner icon in the top right corner.

1. Input the amount you chose in step 4, then press continue.
2. Check the details and slide the button to confirm.

A push notification and alert in app will let you know when the swap is confirmed. The time it takes to complete a swap depends on the assets being swapped. For example:

BTC → ETH takes approximately 10 minutes.

ETH → USDT takes less than a minute.

These times are estimations and may vary significantly if the public blockchains are experiencing congestion.

Swapping cryptocurrency via a centralized cryptocurrency exchange

With this method, the crypto you swap will at first be held by the cryptocurrency exchange on your behalf. If you’d like to take full control of your cryptoassets, you’ll need to withdraw it from the exchange to a self-custodial wallet like the Bitcoin.com Wallet app. When you withdraw crypto from an exchange, you’ll be subject to the exchange’s withdrawal policy and fees. In some cases, you may not be able to withdraw for days or weeks, and the withdrawal fee could be much higher than a transaction fee would normally be.

Here’s the typical flow for swapping crypto from a centralized exchange.

1. Visit a cryptocurrency exchange website.
2. Create an account and verify your identity as required.
3. Follow the website’s instructions to send an accepted cryptoasset to your account.
4. Your crypto will appear in your exchange account.
5. Follow the website’s instructions to swap your cryptoasset for another asset.
6. If you’d like to take full control of your crypto, send it from the exchange to an appropriate self-custody wallet (like the Bitcoin.com Wallet app). It’s important to note that self-custody wallets do not support every cryptoasset. Please check to make sure your self-custody wallet is compatible with the cryptoasset you wish to send.

Swapping cryptocurrency using a decentralized exchange

Decentralized exchanges, or DEXs, are an increasingly popular alternative to centralized exchanges (CEXs). DEXs specialize in peer-to-peer transactions of cryptocurrencies and digital assets. Unlike centralized exchanges (CEXs), DEXs do not require a trusted third party (intermediary) to facilitate the exchange of cryptoassets. In addition, DEX fees tend to be considerably lower than CEXs.

Bitcoin.com has built a full-featured DEX called the Verse DEX, available at verse.bitcoin.com. Here’s the process for swapping crypto using the Verse DEX. All DEXs will use a similar process.

Trading on a DEX consists of two phases. Phase 1 is connecting your crypto wallet to the DEX. Phase 2 is swapping on the DEX.

Phase 1 – Connect your wallet to Verse DEX

Connect to your favorite Web3 wallet, including the Bitcoin.com Wallet app (via WalletConnect). Here’s how:

On mobile

1. Go to Verse.bitcoin.com and select “Connect Wallet.”
2. Choose WalletConnect as the connection method, and select Bitcoin.com Wallet app.
3. In the Bitcoin.com Wallet app, approve the connection request.

On desktop

1. Go to verse.bitcoin.com and select “Connect Wallet.”
2. Choose WalletConnect as the connection method. This will display a QR code.
3. Open the Bitcoin.com Wallet app app, select the scanner icon, and scan the QR code that’s displayed on your desktop.
4. Tap “CONNECT” in your Bitcoin.com Wallet app app to confirm the connection.

Phase 2 – Swap

Verse DEX enables permissionless trading on multiple chains. Let’s look at swapping on Ethereum, the most popular smart contract enabled chain. Here’s how it works:

On mobile

1. Make sure your wallet is connected to the Verse DEX (verse.bitcoin.com) (see above for how to connect).
2. On Verse.bitcoin.com, create your swap transaction and select “Swap Preview”.
3. Approve the swap on your wallet.
4. You’re done! You’ll receive the swapped asset in your Bitcoin.com Wallet app when the transaction has been processed on the Ethereum blockchain.

On desktop

1. Make sure your wallet is connected to the Verse DEX (verse.bitcoin.com) (see above for how to connect).
2. On Verse.bitcoin.com, create your swap transaction and select “Swap Preview”.
3. Confirm the transaction in your Bitcoin.com Wallet app app.
4. You’re done! You’ll receive the swapped asset in your Bitcoin.com Wallet app when the transaction has been processed on the Ethereum blockchain.

Summary of swap crypto

Crypto swapping is a way to directly exchange one cryptocurrency for another, skipping the need to convert it to fiat currency first. It offers a convenient alternative to traditional trading.

Here’s a quick summary of crypto swapping:

• Two main ways to swap:
  • Centralized Exchanges (CEXs): Easier to use, faster, but higher fees and require surrendering control of your crypto.
  • Decentralized Exchanges (DEXs): More secure and private (you hold your own keys), potentially lower fees, but can be complex and have lower liquidity.

Swapping process (general):

1. Choose your platform (CEX or DEX).
2. Select the crypto pair (what you’re giving up and what you want to receive).
3. Initiate the swap (specify amount and confirm fees).
4. The platform facilitates the exchange.
5. You receive your new crypto.

Remember:

• Crypto prices can fluctuate during a swap.
• Be cautious of unfamiliar platforms to avoid scams.

Disclaimer ||
The Information provided on this website article does not constitute investment advice ,financial advice,trading advice,or any other sort of advice and you should not treat any of the website’s content as such.

Always do your own research! DYOR NFA

Coin Data Cap does not recommend that any cryptocurrency Stocks Bonds should be bought, sold or held by you, Do Conduct your own due diligence and consult your financial adviser before making any investment decisions!