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Title: Premium on Prices? Post by: amicrypto on November 18, 2018, 07:39:06 AM I have been trading/buying cryptocurrency for the past 5-6 months. In my newbie days, I would have used Zebpay for all my transactions. Only later did I came to realize that the transaction costs to and from the Zebpay platform to other systems is way too expensive. Then I started looking for other exchanges in India. I have used exchanges like Koinex, LocalBitcoins, WazirX etc in the past 2-3 months.
What I fail to understand is why do all the cryptocurrency exchanges (be it the earlier model or P2P model) in India command a premium over the prevalent prices in the International market. If Ethereum is trading at $200 then in India you can buy it at $215 or more. While I understand that Zebpay was a broker, what is it that raises the price of cryptocurrencies in P2P exchanges. WaxirX gives a premium of close to Rs.6-7/TUSD. Koinex gives a premium of $15-20/ETH. This creates a massive arbitrage opportunity in the market and I know people who have friends around the globe taking advantage of this situation. I would like to understand what is causing this inefficiency in the market. No BS on this thread. Only to the point answers and write only if you know about it. Title: Re: Premium on Prices? Post by: krishnapramod on November 19, 2018, 11:15:59 AM It's simply because of supply and demand, speculation.
India has a thin crypto market, globally around 1.2% compared to the US 23% or more, and the demand is purely speculative so be it buying through an exchange (broker) or P2P, the premium isn't going anywhere soon. Buyers are willing to pay whatever the sellers are asking and now you also have to put the banking restrictions into the mix. Higher demand, limited options, definitely premium. Yeah, things might change as adoption increases (more supply) and more options (regulations). Edit: Then I guess these developers and hunters are bringing a lot of liquidity to the Indian crypto market. Title: Re: Premium on Prices? Post by: amicrypto on November 21, 2018, 06:39:46 AM It's simply because of supply and demand, speculation. Buyers are willing to pay whatever the sellers are asking and now you also have to put the banking restrictions into the mix. Higher demand, limited options, definitely premium. Yeah, things might change as adoption increases (more supply) and more options (regulations). The premium was there even when there were no banking restrictions. While the demand for digital assets in quite robust in India, I refuse to accept that the supply is low. India has the second highest Blockchain developer base. We have so many bounty hunters and all of these (Developers and Hunters) are paid in Cryptocurrency. I guess that India has a fair share of cryptocurrency holding with its population. |