A market is a platform for individuals and groups to exchange goods and services between multiple parties.
hile two parties, buyer and seller, compose a market, an infinite number of parties may be part of one trade. The idea is to have many buyers and sellers to enhance competition in markets.
Types of Markets in Crypto
Traditionally markets have been physical. Yet, recent advancements bring online classifications of markets that work more effectively. When it comes to the crypto space, most of the markets are virtual. Here are the top markets available in the crypto world;
- Auction markets. These auction markets work in a bid system, where the person with the highest bid purchases the asset. They were pretty common for bitcoin. For instance, the US government has held auctions for bitcoin. Gemini exchange also started an auction program in 2016.
- Financial markets. Financial markets are where the crypto assets are exchanged between two parties. In crypto, we have centralized and decentralized markets. Popular exchanges like Binance, Coinbase, and Bittrex are mostly centralized financial markets. But, others like Uniswap and Sushiswap are DEX.
- P2P markets. Peer-to-peer markets involve exchanges between two parties without middle parties. It’s also becoming popular in crypto, with markets like Localbitcoin and Localcryptos performing well. In this case, the platforms provide escrow services to protect the trading parties.
- Black market. These are illegal types of markets where people sell goods illegally. They may be common in countries where crypto is banned.
- Over-the-Counter markets. In over-the-counter markets, you need to involve a broker to help the exchange of assets. OTC markets also help in keeping the privacy of the trade participants.