A user sent us a question about crypto prices this morning:
“Why are the prices for buying and selling crypto never exactly the same as the prices listed on your price pages?”
This is one of the most regularly asked questions on our Support channel, so we have decided to formally and comprehensively deconstruct the concept of the price difference.
As you know, cryptocurrency prices aren’t set by governments or cryptocurrency exchanges. They are set by buyers and sellers on the open market. Every minute, thousands of Buy and Sell offers are posted to order books at cryptocurrency exchanges. It is those offers that set the prices at Kriptomat and other platforms.
When you purchase cryptocurrencies on Kriptomat, you are offered the cryptocurrency you are purchasing at the current buying price, as reflected by transactions listed in order books all around the world.
This is because, on any market, including the cryptocurrency market, the Buy price of a currency is determined by the demand on the market, meaning how many people want to buy the currency.
The Sell price, on the other hand, is determined by the supply on the market, meaning how many people want to give away this same currency.
The key takeaway here is that, on any exchange platform, the Buy price will always be higher, while the Sell price will always be lower, simply because these are the prices dictated by the market and the above-described supply and demand law.
The price shown on our price charts is the average of the buy and sell price.
In a more fancy industry term: the spread. The spread is the difference between the prices asked by sellers and offered by buyers. The average is usually pretty close to what you’ll find when you buy or sell cryptocurrencies. But it will never be exactly the same.
Why are we displaying the average price then?
On certain pages such as the Home page, Wallets, Portfolio, Gainers & Losers etc, we display the average price simply because we do not know if you are planning to Buy or Sell your cryptocurrencies.
How can you see the actual price of a cryptocurrency?
This depends on what kind of transaction you are trying to initiate - do you want to Buy or Sell?
If you are purchasing a cryptocurrency on Kriptomat, the actual price will be indicated when you open a Buy transaction window, as seen in the below image.
The same is applied to the Sell price. All you need to do is initiate a Sell transaction window to see the exact amount you are parting with your cryptocurrencies for.
Remember, these prices change minute by minute as order books are updated around the world!
Keeping Up With the Values in Your Wallets
Our recommendation when purchasing, selling or exchanging is to pay attention to the value of the cryptocurrency rather than the price, as this is the most accurate way to tell if you are receiving or giving away the exact amount you specified.
For example, if you are purchasing 0.0095 BTC, once you complete the transaction, don’t be shy, check that the amount you received in your Wallets section is in fact 0.0095 BTC.
We hope this breakdown has given you valuable insight into how pricing on exchanges is determined and provided you with the reassurance to continue to freely and confidently trade on our platform!
We appreciate your feedback and would like to hear what Hot Topics you would like us to explore!
Don’t be shy! Drop us a line at [email protected]. Your question may be the headline of our next Hot Topic. 🚀 🧑🚀