Bitcoin Forum

Hello,

Glad to be here.

I am looking to day trade BTC/USD and searching for an exchange to use with good charting. So far I like Bitfinex because of there amount of volume.

Why do most exchanges have different prices? I am not sure I understand this to well.

Thank you all.

Different exchanges have their own internal markets, and the price of Bitcoin in the exchanges depend on the buyers and the sellers in the exchange, so the prices fluctuate a lot.  However, users can buy and sell between multiple exchange sites so that they can buy at the lowest and sell at the highest.

Thats why it is an advantage to trade at multiple sites to get these benefits, however, bear in mind the trading fees and the withdrawal fees, so unless you are trading at a large volume, it is still not worth it. :)

Price is not made by exchanges, it is made by users who trade there.
Therefore some exchanges in india or other countries have/had prices +30% or higher, since the demand for btc is higher there.

Of course this means you could buy cheap and sell expensive elsewhere, but usually there is a reason why the price is different. Short and small price differences up to ~0.5% are normal (after paying trading fees to buy and to sell, no profit is left). But bigger and longer lasting price differences are usually a sign that it is not possible/not easy to profit from the difference. One easy example would be if one exchange charges extremly high USD withdrawal fee. Then it would not be good to sell there your btc for a 1% higher price, if withdrawal fee are eg. 2%, cause no profit would be left. -> the price will most likely never be the same on those exchanges.

It is because of the traders people in the exchanges are not the same and the price movement or the current price is made by the traders thats why some people use to transfer funds fron one to another to sell in much higher exchange.

Thank you for the response.

Just to make sure I understand. A person can buy a bitcoin on one exchange for cheap price, then sell on another exchange for higher price?

Why not just buy and sell higher on one exchange? I am not sure I understand?

Thanks

a) the difference may not be enough to outweigh the fees, b) there is a delay to transfer funds between exchanges and you are liable to price changes in that period. c) people do exactly that and make good money from it.

I think this is called arbitrage trading. people wants to search bigger profit and they do this to help them to reach more profit but like above me said, you need to thinking about the time to send the funds from one exchanges you bought bitcoin into other exchanges that you want to sell because I have bad experience for this and I don't think that its a good idea to do arbitrage if there is taking too much time before its landing into other wallet.

You answered yourself in your question description that why the different prices are there. Thats just because of different volumes getting traded at different exchanger for same entity. Thats easy to guess utmost of the time the prices are pretty close to each other and there is no huge difference before they could catch each other. This is one of the thing that decentralisation makes possible due to unregulated investment everywhere.


Apart from this the more popular is the exchanger the more investors drive themselves there so they always have higher chances of getting volume and hence little more prices as compared to others.

Yes you can buy at the cheapest price at one exchange then transfer to other site where the price is higher but it wont worth enough for small amount of btc because the most possible gap would be just small amount in $. It is not recommended thing unless the price difference is so high. Using one exchange to buy and sell is enough for most traders. Just wait patiently till the price goes up to make profit.

I wonder why exchanges don't communicate with each other, instead of leaving arbitraging to users.

Btw I've noticed that price differences seem quite logical. For ex, BTC's price is currently a little higher on Bitstamp than on Kraken, possibly to compensate for the higher fees on Bitstamp, and it's 100eur higher on GDAX, possibly because of Coinbase's high 1.5% fees? Can't be because people are ready to pay more there because they will get their B2X, because price is normal on Bitfinex.

And also on Kraken the prices must be bs & freezing a lot, considering no one can trade at all. (like, RIGHT NOW)

Bitcoin exchange has different price because amount user/trader are different and each of them put their bid and ask price in different than other exchange. Because supply and demand affect to bitcoin price so different bid and ask will make different than other.
Thats my opinion. Correct me if wrong.

Prices are decided by the interaction of the buyers (demand) and sellers (supply) furthermore each exchange has their own market [different buy and sells] thats why prices are not synchronized and will never be. In conclusion to that the exchanges can't just come up with their own prices.

When it comes to the number of buyers and sellers on exchanges, I guess it depends on the exchange's options/features e.g. trading fees, verifications etc.
And yah it might also be possible that they prefer to use this X site for B2X.

All exchange platforms have there own user base, fees on deposits/withdrawals, pairs they support, trading fees these all affects the price or spread between sell and buy order in the exchange.

Like the platform where deposit fee for USD is high, people will be willing to only buy at lower price than market rate to mark up all those deposit fee taken by the exchange.

You should search "arbitrage" term. It will be answer to your question.

It because of the demand and supply ratio created by the users in that exchange. Every exchange has its own trading volume and that decides the price of a crypto.

suply and demand trader can effect about price
if sell order or buy wall order is big move price is slowly, difference with is small move price can easy

It's because each exchange has its own buyers and sellers and depending on them how much the price of a coin will be. That's why there are different trade volumes in exchanges as well. To take advantage of this opportunity, some traders buy in one exchange and sell it higher in another exchange taking into account the trading and withdrawal fees. This is called arbitrage trading but you need to fast in doing it because other traders may have been able to buy or sell the coin at the price you wanted before you will be able to execute a trade. There are some countries that has a higher demand in bitcoin thus a higher price so you can take advantage of this opportunity to buy lower in another exchange and sell it to the exchange of that country.