In this post, I have come with one of the most common experienced things on Cryptocurrency that is Cryptocurrency Shows Different Prices Offer On Different EXCHANGES, Why?
On this there will be many questions that come to the mind like;
- Why Cryptocurrency don't show the same price between different exchanges?
- Is it possible to take this as an advantage of different prices across exchanges?
- Is it possible to buy at one exchange then transfer to another and sell?
What You Think?
The one liner answer for Cryptocurrency Shows Different Prices Offer On Different EXCHANGES, Why? will be because a cryptocurrency has no fixed international price.
This is also because of the Order book, as every platform has its own order book that connects between the buyers and sellers for that particular crypto asset like BTC, Eth, XRP.
Hence, the cost of particular assets can move dramatically between exchanges.
|Cryptocurrencies in general, are decentralized digital currencies, meaning there is no recognized standard price at any particular time. Crypto isn’t pegged to any fiat currency, such as the USD or Euro, and it isn’t linked to a particular nation or even to any specific exchange. Those looking to buy or sell crypto such as BTC, Eth, XRP will find that supply and demand varies depending on the market, and the time you decide to take action.|
In some assets, their price can move greatly depending on how actively investors are trading(buy-sell) and exchanging that coin. As a result, we see much smaller differences between the price of large-cap coins on trading platforms than small-cap coins.
Trading volume can be much higher on the larger exchanges, such as Binance, while smaller exchanges see less volume. This difference in supply affects the price of cryptocurrency across those exchanges. There is also no currently established procedure for pricing cryptocurrency in general.
This means that no one really knows what the cost of it should be, and the price is purely determined by trading levels at any given time.
Most Crypto Exchanges charge in the form of transaction fees to those who use their services in the trading.
This thing getting added as an extra for an inaccuracy to the final trading price. The fee charged by most crypto exchanges is relatively small in comparison to the value of your trade.
The average fee charged by the more popular exchanges usually ranges anywhere from 0.1 percent to 0.2 percent, but we can find good deals out there too.
Like, Binance, for example, charge 0.1 percent for traders who aren’t using BNB (Binance coin) to make their trade.
This means that anyone who adds liquidity to their order book by placing a limit order below the ticker price when buying, or above the ticker price when selling is eligible to pay a “maker” fee, while those who remove liquidity from their order book by placing an order that is executed against an order on the order book will pay a “taker” fee.
Many exchanges provide their own coins into the market, if you have an account on such exchanges and also have their coins then you can use those to pay transaction fees.
Can We Take Advantage Of Exchange Value Differences?
Even small discrepancies in this number could cost you when you look at the big picture.
It is sure that it will not take a long time to find out that it could be a financially viable idea to take advantage of the difference between the value on these exchanges or even between two trading pairs, this is called Arbitrage.
In fact, there are many peoples who do this every day to make money in various markets.
At any given time there can be a price fluctuation of a few cents or possibly even more sometimes on a particular asset on different platforms. This is most notable with lower value assets which tend to have the biggest price swings due to their lower trading volume.
In order to find these deals, there are a number of tools online that can help you do this. If you look at various cryptocurrency aggregator sites, most of the time they will list this data for you in their exchanges section.
In most cases, each coin or token will have the exchanges it's currently traded on listed, and next to each of those entries will be the current trading volume and the price the asset was last reported trading at on these platforms. Using this information you can easily purchase those cryptos for a lower cost on one exchange, and then flip them on a higher priced market for a profit.
In many cases, the profits here will be very small. You’ll only earn perhaps a couple of cents per token, but the idea is to do enough of these trades so that they add up in value.
What You Think?
Is it possible to take this as an advantage of different prices across exchanges?
It is possible if you have or gain that quickest skill. Many peoples are taking this advantage and keep adding that small profit quantity.
Is it possible to buy at one exchange then transfer to another and sell?
Well, I will say quite not worthy because of the reason for the price differences in fees for transferring between the exchanges.
The opportunity for flipping these coins is very small unless you want to hold them for a long term of course. This can be particularly tricky on some exchanges with slow funds transfer times.
As an investor, it’s up to you whether this method is worth your time, but it is a possibility, and if you enjoy watching the market for bargains then it’s a decent way to make yourself a little income.
It can be an exhausting endeavor if you don’t actually like watching exchange information like a hawk, and if that’s the case you may just want to buy and hold some coins and forget about this mess.