3 Reasons Bitcoin Price on Different Exchanges Varies

Bitcoin price on Exchanges Varies

Bitcoin Price varies depending on the exchanges they are trade.
At Glance - here is why Bitcoin Price on different exchanges differs.
  • Liquidity
  • Inegotiable Bitcoin price
  • Infrastructure issues.{alertInfo}

It's not just Bitcoin. This issues is applicable to almost all Cryptocurrencies on exchanges. So which one is correct? The simple answer is, all of them are correct. You may be wondering how possible is that, here's is it - cryptocurrency price varies between exchanges because of three main reasons.

Why Bitcoin Price Differs Between Exchanges?

  • Liquidity
  • Inegotiable Bitcoin price
  • Infrastructure issues

Liquidity

Liquidity is a business term which means - a market features whereby an individual can quickly or easily purchase or sell an asset without causing without causing any drastic change in the asset price. Therefore, Bitcoin trading volume can be massive on one exchange and much lower on another exchange. This causes cryptocurrency prices to varies on different platforms.

Inegotiable Bitcoin Price

There's no any established methods to price Bitcoin. Therefore, no one knows what its ought to cost and the price is based mainly on trading : no cryptocurrency has a fixed price.

Infrastructure Issues

moving money across exchanges can be messy and inefficient. It also requires lots of collateral to do it efficiently . That means it's hard for traders to arbitrage differences across exchanges, which allows these price differences to persist for longer than they would in a more efficient market.

According to Pisani, there's an "infrastructure issue" wherein buyers can't currently and quickly buy bitcoin across multiple exchanges at once, again, making it hard to arbitrage these price differences. Pisani added that, this will be something that needs to be looked into during the next year as bitcoin increases in popularity.

Morichgan

Hello! My name is Morichgan . I'm a content writer. I write stories about Finance, Businesess and Technology. Contact me via the contact page. Thanks.

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