Why Do Bitcoin Exchanges Have Different Buy And Sell Prices Even Before They Add Fees On Top?

If you are planning to invest in Bitcoins, then there are several factors you will nees to know about and inspect carefully. For instance, did you know that Bitcoin exchanges have different buy and sell prices even before you can are the fees on top. Yes! The cryptocurrency space is a complex sector and you will need to understand various aspects which influence the market. You can check Bitcoin Circuit if you want to invest in cryptocurrency in a safe and secured manner.

Bitcoin exchanges operate as a continuous double exchange by filling the order book along with the sellers who provide the ask prices and buyers for submitting the bid prices. Hence, you will be able to see that the order book comes with a series of different asks from the last trade. Based on the order book you own, for any given quantity of Bitcoins you are going to see there is always a huge change in the buy and sell price. The buy price stands for – how much it would cost you per bitcoin to buy that quantity and the sell price indicates – how much you would receive per bitcoin if you sold that quantity.

But, why is this so? This is simply because the more you buy Bitcoins over time, you are moving up the ask orders and the price that you are paying is increasing. The same phenomenon occurs when you are selling your Bitcoins, your order is coming down and that is why the prices are low. When the order is completed, you will also need to pay the fees that is required by the exchange. This phenomenon is often referred to as the Spread and it happens in every bitcoin exchange. Bitcoin brokers around the world, are selling you Bitcoins from their reserves. That is why in order to maintain this reserve they will need to buy and sell Bitcoins and keep it stable.

As a result, based on the behavior ot the exchanges these miners are using, Bitcoin brokers will always set the buy price which is going to replace their Bitcoins available in the reserve for the same price or a higher price they paid to buy them. Another reason that facilitates this phenomenon, is because of the fact that transactions are not immediate and instant. It takes time to transfer the Bitcoins from the reserve of the miner to your wallet and since the Bitcoin marker is up 24 hours of the day, the prices are most likely to fluctuate within the time you get your Bitcoins. The huge volatility in the market tends to change the price of Bitcoins drastically in a second. Hence, the buy and sell prices are very different.

So, now you are aware why Bitcoin exchanges have different buy and sell prices much before the fees are added on the top of the transaction. Make sure to read more about it and use a reliable cryptocurrency exchange platform like Bitcoin Circuit in order to make good amount of profits over time by investing in the best bet. The cryptocurrency sector is unregulated and that is why you will need to maintain proper measures.

Janice
News Reporter
Janice Morgan is the head writer at Gonzagala. She loves writing as much as she loves her seventeen cats! Her articles on nature are well appreciated.