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Cryptocurrencies are known to be traded on various exchanges, platforms, and marketplaces. Over the last few years, cryptocurrencies have caught the interest of many investors, both serious and novice. However, they often encounter difficulties when comparing cryptocurrency prices on different exchanges – some prices are higher, while others are lower. Why does this happen, and what influences it? What’s the magic behind it? In this article, we will explore the main reasons why cryptocurrency prices differ between exchanges and online platforms.
Why do different exchanges have different prices?
The price of crypto-assets, such as Bitcoin, is determined by supply and demand in the market. The price dynamics depend on the turnover and demand of buyers and sellers. Each exchange has its own liquidity level, which affects the cryptocurrency’s value on that particular platform. Hence, different exchanges may offer different prices for the same cryptocurrency based on their liquidity levels.
Furthermore, on a global scale, the price movement of cryptocurrencies can be influenced by economic and political factors, such as fluctuations in the US dollar. Additionally, the demand for digital assets may rise during times of economic instability, leading to an increase in their prices.
Apart from liquidity levels, the price of cryptocurrencies can vary from one exchange to another due to the demands of buyers and sellers. On some platforms, prices may be higher because the demand exceeds the supply. On other exchanges, prices may be lower because the supply surpasses the demand.
Where do cryptocurrency quotes come from?
Quotes represent the process of determining the current price of cryptocurrencies in the market. This can be described as the value at which a seller is willing to sell the cryptocurrency and a buyer is willing to buy it. Quotes are usually expressed in relation to the US dollar, Euro, or other fiat currencies (stablecoins).
Asset quotes typically appear on exchanges, marketplaces, and digital platforms where these assets are traded. Since quotes are decentralized, they can differ across various exchanges and are formed based on the demand and supply of a specific market. In essence, the process is determined by the number of users participating in trading on a given platform.
What influences the price of cryptocurrencies?
The price is determined by several factors that can impact the value of cryptocurrencies. Traders engaging in transactions on exchanges may experience losses or gains depending on which digital coins they buy and sell.
One of the primary factors influencing the price of cryptocurrencies is supply and demand in the market. If a particular cryptocurrency experiences high demand and limited supply, this will result in an increase in its price. Conversely, if an asset has limited demand and an oversupply, it may lead to a decrease in its price.
While the price of cryptocurrencies is influenced by supply and demand, it is not solely limited to these factors. In a world where information is global and accessible to everyone, economic and geopolitical events can significantly affect the average price level of cryptocurrencies. For example, the introduction of restrictions on using digital assets in a specific country is likely to decrease the price of cryptocurrencies on all exchanges. Conversely, a growing interest in cryptocurrencies as a whole can lead to an increase in the average price of these assets.
The liquidity of an exchange also plays a crucial role. If a marketplace or exchange has high liquidity, meaning many active users, this will lead to an increase in the price of assets.
Where is the best place to view cryptocurrency prices?
As cryptocurrency prices can fluctuate depending on the exchange and the overall market situation, there are several aggregators that allow users to view cryptocurrency prices on different exchanges simultaneously. The most popular among them are CoinMarketCap, CryptoCompare, LiveCoinWatch, and others. With the help of these websites, users can obtain up-to-date information about cryptocurrency prices on various exchanges.
Additionally, there is the Obmify service, where you are currently located. It is a platform for comparing the rates of not only cryptocurrencies but also other currencies, including cash (as we all know, the central bank rate in Ukraine is not the same as the real rate). With Obmify, you can keep track of the current rates of all popular currencies, check reviews on online currency exchanges in Ukraine, and leave your feedback – that’s what you can do on our platform. Whether you’re engaged in arbitrage, travel a lot, or need to exchange something for something else for other reasons, Obmify is your reliable assistant in this matter.
