Why are local bitcoin rates so much higher than preev rates?

[Captimiz]

Talking about the BTC to USD rates.

[unamis76]

Because buying in person always has a premium. This premium is charged on the basis that exchanging Bitcoin locally and in person is normally much more private than doing it on an exchange.

[Pearls Before Swine]

I'm seeing the exact opposite,  actually.   Preev is showing over $1400, while bitstamp is around $1387.  There have always been discrepancies like that, though, because of how small the bitcoin market is and the fact that there are numerous exchanges.   Preev should be a composite of them, though.  Not sure why they're listing the highest price.   That's what I'm seeing,  anyway.

[webtricks]

Talking about the BTC to USD rates.

Bitcoin prices are highly prone to geographical conditions like number of buyers, demand in different countries. So they are ready to pay higher prices than what in international market. Moreover, preev shows rates in USD and you may have ascertain local prices by converting BTC -> LOCAL -> USD which certainly don't work. You can't relate fiat conversion rates with btc conversion rates.

[unamis76]

I'm seeing the exact opposite,  actually.   Preev is showing over $1400, while bitstamp is around $1387.  There have always been discrepancies like that, though, because of how small the bitcoin market is and the fact that there are numerous exchanges.   Preev should be a composite of them, though.  Not sure why they're listing the highest price.   That's what I'm seeing,  anyway.

I guess there's also an explanation for that:

Price data is continually gathered from multiple markets. A weighted average price of these markets is shown by default (based on 24-hour trade volume). Alternatively, you can choose a specific source from the settings menu.

[BrewMaster]

because bitcoin price is on the rise and they all don't want to miss on possible profit so they give even higher prices. on top of that as it was mentioned you are buying in person from individuals and they offer whatever price they like to make a bigger profit from the spread.

edit: to poster above, see it like this for individual accurate price: http://preev.com/btc/usd/source:localbitcoins (currently $1509)

[Reid]

Or are they late on updating the price?
I dont really know much but I keep on monitoring others and it is not that way of the difference.
Everyone is using preev as a basis for exchange. It is a good thing for those who knows a website which exchange it lower than preev but for others it aint good.
There is no perfect rate for every exchange everyone have their own.

[Iranus]

I'm seeing the exact opposite,  actually.   Preev is showing over $1400, while bitstamp is around $1387.  There have always been discrepancies like that, though, because of how small the bitcoin market is and the fact that there are numerous exchanges.   Preev should be a composite of them, though.  Not sure why they're listing the highest price.   That's what I'm seeing,  anyway.

I don't think you know what he's discussing.  He means the rates for the site LocalBitcoins.com, which is a peer-to-peer exchange.

The reason is very simple OP:  it's much harder for people to work with LocalBitcoins than to work on exchanges.  The premium is just the value of going outside to somewhere where another person meets you and manually waiting there for the transfer, along with the difficulty of selling and buying at times which are potentially inconvenient for you because it can take a long time to find a partner and the very high possibility of someone scamming you.

[Yakamoto]

Talking about the BTC to USD rates.

Basically just because you actually have to go and meet the person and the additional premium is essentially paying someone to go and meet you instead of buying it online. So not only do you lose gas money, you also pay a premium on top of a relatively inflated spot value.

The entire system is basically just for people trying to keep out of the eyes of the government or whatever you still be involved with the blockchain, and for most people they don't care or need something like that. They just go and buy online, regardless of who might be watching. It's not like Bitcoin has become a thing that everyone needs to get their hands on. Yet.

[cellard]

Because buying in person always has a premium. This premium is charged on the basis that exchanging Bitcoin locally and in person is normally much more private than doing it on an exchange.

But there's people charging ridiculous premiums even if they do not meet in person, so a regular bank transaction and requiring scan of ID too etc, plus charging a big premium.

There are a lot of scammers in Localbitcoins. The only reason to use Localbitcoins is to meet in person as you said, other than that, just buy in an exchange. You are going to have the same levels of privacy (none).

[danherbias07]

Thanks to Iranus for clearing that out.
So he means localbitcoin website. I think you are on the buying list tab. They will surely make it higher for them to profit.
Same with exchange sites. Sell rates are low and buy rates are high. The good thing is there is ratings there and you can be sure to trust them. Thanks also to the users comments of how the transactions went smoothly. You always have a choice if you prefer the website exchange to buy. But I am pretty sure they are way higher

[gentlemand]

Right now the Preev rate is hard to rely on as the price is being pulled in so many different directions.

And Localbitcoins premiums are very sensitive to FOMO.

In the past when things were in the doldrums you could occasionally obtain BTC for less than the cost on the exchanges. As soon as there's a whiff of excitement the premiums go through the roof because they know people will pay it.

[MingLee]

Right now the Preev rate is hard to rely on as the price is being pulled in so many different directions.

And Localbitcoins premiums are very sensitive to FOMO.

In the past when things were in the doldrums you could occasionally obtain BTC for less than the cost on the exchanges. As soon as there's a whiff of excitement the premiums go through the roof because they know people will pay it.

Preev is terrible right now because it's being inflated by Bitfinex and dragged down by BTC-E, giving it a +$60 to +$70 average compared to what most sites are trading it at. The fact that localbitcoins is so much higher than preev of all things really speaks to the premiums that are involved and the overall inflation of Bitcoin's value on that website.
The entire market right now is a mess. You basically have to have a bunch of exchange websites open to average the value properly because everything is being screwed by Bitfinex.

[JanpriX]

I think its because there's an added value if you're going to buy BTC personally than on an exchange. You'll be meeting up with someone if you're going to buy with LocalBitcoins and the hassle of it being a personal interaction comes with an additional value. The person who will meet you up for the transaction will have to ask for additional payment and this additional payment creates disparity regarding the price of bitcoin against Preev.

Also, I think Preev includes the price of BTC in Bitfinex which is actually way more higher than the average price. This also can create big price difference between localbitcoins and preev.

[Emoclaw]

Right now the Preev rate is hard to rely on as the price is being pulled in so many different directions.

And Localbitcoins premiums are very sensitive to FOMO.

In the past when things were in the doldrums you could occasionally obtain BTC for less than the cost on the exchanges. As soon as there's a whiff of excitement the premiums go through the roof because they know people will pay it.

Preev is terrible right now because it's being inflated by Bitfinex and dragged down by BTC-E, giving it a +$60 to +$70 average compared to what most sites are trading it at. The fact that localbitcoins is so much higher than preev of all things really speaks to the premiums that are involved and the overall inflation of Bitcoin's value on that website.
The entire market right now is a mess. You basically have to have a bunch of exchange websites open to average the value properly because everything is being screwed by Bitfinex.

Isn't that basically what Preev does?
Alternatively you could use bitcoinwisdom, which displays the BTC/USD value of 4 exchanges (BTC-e, Coinbase, Bitfinex, Bitstamp) individually.



Also an extremely good tool for traders overall.

[gentlemand]

Isn't that basically what Preev does?

Preev should be savvy enough to discount exchanges that basically don't work.

You'll find anywhere that aggregates prices where real money is on the line such as Bitmex were very quick to abandon China and Bitfinex. Preev should be doing the same. They're not in any way real prices right now.

[Qartada]

Isn't that basically what Preev does?

Preev should be savvy enough to discount exchanges that basically don't work.

You'll find anywhere that aggregates prices where real money is on the line such as Bitmex were very quick to abandon China and Bitfinex. Preev should be doing the same. They're not in any way real prices right now.

I wouldn't be surprised if they left Bitfinex on there to drag up the price and help to bring traffic to their site.  Personally I'd never trust a Bitcoin price if I can't see the individual exchanges' price as well so that I know where it's actually at for most people.  Bitstamp is at about $1400 and I'd call them the most "functional" exchange right now. 

Just goes to show that LocalBitcoin traders expect people to pay a lot of money if they're charging higher than preev rates.

[gentlemand]

I
 wouldn't be surprised if they left Bitfinex on there to drag up the price and help to bring traffic to their site.  Personally I'd never trust a Bitcoin price if I can't see the individual exchanges' price as well so that I know where it's actually at for most people.  Bitstamp is at about $1400 and I'd call them the most "functional" exchange right now. 

Just goes to show that LocalBitcoin traders expect people to pay a lot of money if they're charging higher than preev rates.

I have the Bitpay price set as a reference in my phone wallet. That seems the realest price to me as they're churning real money around day in, day out.

[AngelSky]

Talking about the BTC to USD rates.

Because localbitcoins traders knows that bitcoin price will increase in future. Therefore, they buy and sell bitcoin which is more than see in the price chart.
This is why localbitcoins trading is always top than the other trading sites. I personally sell the bitcoin whenever I need and price is also higher than Google rate whenever I check.

[youdacapt]

Talking about the BTC to USD rates.

Because localbitcoins traders knows that bitcoin price will increase in future. Therefore, they buy and sell bitcoin which is more than see in the price chart.
This is why localbitcoins trading is always top than the other trading sites. I personally sell the bitcoin whenever I need and price is also higher than Google rate whenever I check.

There are three countries that I read in this forum increase their trading volume in localbitcoin ie, saudi, ukraine and dominika republic. I don't know the exact reason behind them, obviously localbitcoin is also part of global market benchmark so it will indirectly affect their current rate.