Bitcoin Forum

If every exchange has a different price for bitcoin, how comes bitcoin has the same price all over the world?

I'm trying to get my head around that.

Can someone explain it?

JH

If you are following coinmarketcap, the price is calculated from averaging the price of all exchanges. Different price in different exchanges is likely to be happened because not all the traders are trading in one exchanges, nor all the exchanges have the same traders. CMC takes all the prices of Bitcoin and average the price which is the worldwide price you are talking about.

Arbitrage, especially by bots.

It doesn't have the same price all over the world. For sure there are different supply and demand to BTC. Mainly, the cryptocurrency markets surrounded by trading bots, like what I use, Gunbot (https://gunbot.ph), and it's traded 24/7. I doubt it could have the same price overall.

What you could do to wrap your head around it is that there's a specific range of BTC prices. $6500~$6600. Maybe that's better in representing the "price" for different exchanges.

Not all exchanges have the same liquidity, and since the price is based on supply and demand, it will differ from one exchange to another (insignificant difference).

The only case where you can find bitcoin price much higher (compared to the rest of the world) is in countries like Iran for instance, and that's because of the sanctions applied to them by the U.S.

Also, withdrawal fees have historically accounted for some difference.

Not only Bitcoin doesn't have the same price across the world, it might not have the same price in one country or one location. When people deal with Bitcoin and negotiate the price, they usually use agree on one source of price, like some exchange or coinmarketcap or bitcoinaverage. This helps them avoid potential disputes caused by big price differences between exchanges. So, if you will be doing some transactions when you have to agree on the USD value of Bitcoin, always make sure to agree on the price tracker first.

ok, it makes sense.

So I've heard of Arbitrage where you can profit from different prices on different exchanges.

How do you take advantage of this and make money?

JH

First of all you have to know that bitcoin price depends on traders not on exchanges. Exchanges are only media for traders. Different people trade on different exchanges. So price may differ.


You may find answer from above discussion already.

As an individual, you can't beat the bots.

To put it simply, you can make a profit by buying at a lower price and by selling at a higher price. Of course, you need to have multiple crypto exchange accounts open for this, and take into account any other costs incurred in deposits and withdrawals with exchange. As with everything else, I don't think success in this way of trading can be achieved overnight, and it takes some time to gain experience.

Read the most important information at the following link : https://cryptonews.com/guides/how-to-crypto-arbitrage.htm

Unless you trade on news.
There are bots scraping news articles to check the coins mentioned in (as you surely know) but so far it's not an efficient point since the bots can hardly say if the news is either positive or negative.
It's a weak point for the majority of them but surely less the day we see corporations with their 'algorithms' on the market

you need to check every exchange price differenve always if you want to make money from arbitrage.

This arbitrage thing will not work only in btc you can also do this in unpopular coins as long a you see that they have high price difference and calculate it with the fees you need to pay for widrawal also make sure that wallet is online and can easily deposit from exchange to another exchange.

Very interesting thank you and largely agree. I was so categorically negative with the op because I always try to put newbs off trading until they are really ready. But you have a great point.

This is not necessarily true. The South Korean market went through long periods of having a higher price than the rest of the world. The reason for this was that foreign money couldn't get in or out. Because it was a sealed market it did its own thing and was often over $1000 higher than elsewhere.

There were a ton of threads here asking how this could be exploited and why there wasn't arbitrage. If it was possible the difference would've been squashed flat in seconds, but it wasn't. No one leaves free money on the table.

If there is a consistent price difference between one exchange or area vs everywhere else it means there is always a problem of some sort moving money that distorts the price difference.

Sorry to interfere but this line makes me wonder. When is the right time for a noob to start trading? When it will be "really ready"?
If they don't start from "somewhere", there will be always newbies... ;D

There's newbieness in different forms, crypto newbieness and trading newbieness.

If you don't have a grounding in how fucking gross crypto can be then your trading will be even more disastrous than it was going to be anyway.

Think of all the things you need to be aware of - plagarised white paper piece of shit projects, fake volume exchanges, exchanges springing KYC on you, exchanges flat out stealing from you, malware wallets. The list is a very long one. If you're not immersed in some of the basics then you may well head straight into disaster.

Be careful trying to arbitrage large price gaps. If an exchange's prices differ greatly from the rest of the market, it's usually for a good reason. The exchange may have disabled withdrawals or gone insolvent, for instance.

When Wex.nz shut down withdrawals (they collapsed months later) big price gaps developed, and some people made the grave mistake of depositing coins to arbitrage the difference. They lost everything.


That's not beating arbitrage bots. It's just trading on news, which is really risky.

Arbitrage is supposed to be extremely low risk. There is no guessing or interpreting involved. You buy for $0.99 and sell for $1, rinse and repeat.

I don't argue what you are saying, in fact, I agree to all. :)

Still though "my" question remains unanswered, for both newbieness forms that you mention (crypto-trading).
When does a newcomer know the right time to get on a wagon and start trading? Which wagon he will choose is another thing. Besides almost all exchangers have the major coins and are more than enough to take a pick.