Swap your Crypto – How and Where
| — Swap refers to exchanging one crypto asset for another, like swapping your BTC into ETH|
— Swapping crypto can be interesting for a number of reasons, including making a profit, or diversifying your portfolio
— The most common method of swapping crypto is using exchanges, though you wouldn’t be in full control of your crypto
— Ledger’s Swap option allows you to exchange crypto while retaining total ownership.
Trading crypto assets is a pretty common practice in the crypto world. Let’s have a look at what swapping means and why it’s useful for crypto owners.
What does swapping crypto mean?
Ever wondered how many cryptocurrencies existed? A few hundred? Maybe a thousand?… Well, try over 7,000 according to CoinMarketCap. With so many choices, you might at some point want to give new cryptocurrencies a try. But how can you go about it?
Well good news! You can easily give another cryptocurrency a try by making a swap. Swapping refers to exchanging a cryptocurrency that you already have into a different one. So how does it work?
Let’s say you have some Ethereum, but you really want to get some Bitcoin instead. There are certain services that can actually help you with this. Thanks to Swap service providers, you can exchange your Ethereum and receive Bitcoin of roughly the same value. To simplify:
You’d send your 10 Ethereum to a Swap service provider, who will change it into Bitcoin for you. You’ll have swapped your 10 ETH for 0.34 BTC.
Why would I want to swap?
Ok, you now understand what swapping cryptocurrencies means. But why would you want to do it? What reasons could someone have for wanting to get rid of their crypto assets for another kind? Well, let’s dive into it.
Ah yes, making money. Who doesn’t like it? Indeed, you could make quite the profit by trading cryptocurrencies, since they can change in price very quickly. If you time the market correctly, and have a bit of luck, you could earn quite a lot by swapping your crypto at the right moment.
Diversifying your portfolio
Not everyone likes those quick price changes though. Diversification is usually seen as a pretty good weapon against risk. Having a bit of many different cryptocurrencies could help reduce the impact of price drops.
How do you like the sound of getting money without doing anything? Certain crypto assets support staking, meaning you can gain more crypto without any further action being required on your side. You could swap your crypto to give this a try.
Trading cryptocurrencies is always a risky business – and we’re not talking about security. Remember we were saying you can profit quite a lot if you time the market correctly? Well, get it wrong and you could see losses of any caliber. Some good rules of thumb: don’t invest or trade what you’re not ready to lose and do your own research beforehand.
On top, swapping cryptocurrencies usually includes a fee. You’re likely to receive a slightly lower value in return.
Different Ways to Swap
Traditional Swapping: Exchanges
Swapping assets is a pretty common practice in the world of crypto, but how does this work? Well most often, you’d use an exchange to swap your crypto assets for your desired ones.
To get started, you’ll need to create an account and provide your personal information. After this, you can send your cryptocurrencies to their platform to start making your swaps. Once you’ve made your swap – let’s say Ethereum to Bitcoin -, your newly received crypto will be received on the exchange’s platform.
The one thing is, when you send your cryptocurrencies to an exchange and swap there, you are not in control of your funds. Instead, you’re leaving your crypto assets in the hands of the exchange. This means that you can be limited in what you can do with your crypto by them.
As you can see here, when you swap cryptocurrencies through an exchange, you’re effectively leaving your funds in their hands. If you don’t take your crypto off of their platform, it remains in their control.
While it sounds pretty fancy, non-custodial basically just means that the exchange you are using is not going to keep your crypto on their platform.
How it works is pretty simple: you send them one cryptocurrency and they’ll send you another of your choice back to the address you’ve given them. This means you won’t need to leave your crypto in their hands.
Swapping with Ledger
You can now swap your cryptocurrencies directly through Ledger’s solution thanks to our partners FTX, Changelly, Paraswap and 1inch. To do this, you need to have one of our hardware wallets and download Ledger Live. Ok, sounds great, but how is that any different?
Unlike with traditional crypto exchanges, the crypto you just swapped will immediately be in full control of it. The crypto you want to exchange is directly sent to the swap service provider, who will send you back your freshly swapped crypto to an address that’s immediately secured by your Ledger device.
As you can see, from the moment your swap is completed, you immediately are in total control of your newly received crypto.