Any service that connects buyers and sellers of bitcoin is considered a bitcoin exchange. Bitcoin is a liquid asset for large-scale trading because of exchanges. Generally, when people refer to bitcoin exchanges, they are referring to centralized 'custodial' services such as Coinbase, Kraken, and Binance. It is possible to exchange bitcoin and a variety of other cryptocurrencies on these platforms. Just like stock trading services such as Robinhood and Charles Schwab, bitcoin exchanges connect buyers and sellers.

A Bitcoin exchange is an online platform that facilitates the buying, selling, and trading of Bitcoin and other cryptocurrencies. These exchanges serve as intermediaries, connecting buyers and sellers in the digital currency market. Users can create accounts on these platforms to exchange their traditional fiat currencies, such as dollars or euros, for Bitcoin, or vice versa. Additionally, Bitcoin exchanges provide a marketplace for cryptocurrency trading, allowing users to buy and sell Bitcoin based on market prices. Some exchanges also offer advanced features like margin trading and derivatives.

Security is a paramount concern for Bitcoin exchanges, and reputable ones implement robust measures such as encryption and two-factor authentication to protect users' funds. Notable examples of Bitcoin exchanges include Coinbase, Binance, and Kraken, each with its unique features and user interfaces catering to a diverse range of cryptocurrency traders and investors.