Based on the data of the Coinmarketcap resource, as of the second decade of December 2022, there are 532 exchanges on the cryptocurrencies market. And each of them has different cryptocurrency rates. For example, looking at the daily BTC price analytics, you can stumble upon the following phrase, “the price broke the $16,000 level and reached 16,330 dollars per BTC.” However, comparing the cost of one coin on different platforms, you can see that on WhiteBIT, the price is $16,389, and on Binance, it is $16,259.
Many inexperienced users at this moment have a completely reasonable question, why are cryptocurrency rates different on different exchanges, and what do they depend on? In this article, let’s talk more about this topic.
How is the Market Price Formed on Crypto Market Websites?
In fact, the rate of cryptocurrency on different platforms differs and, sometimes, a lot. But what is the rate of cryptocurrency closest to the real price? There is no answer to this question because Bitcoin, like any other cryptocurrency (except stablecoins), does not have a single fixed price.
The genius of Satoshi Nakamoto’s idea lies in the fact that Bitcoin, unlike fiat currencies, does not have central authorities (central banks or issuers) that determine the exchange rate of the national currencies they issue daily. The price of BTC does not depend on fluctuations in the dollar exchange rate, decisions on interest rates of the world central banks and other conventional fundamental factors. Although these factors also certainly influence price formation, they cannot fix it artificially. Simply put, there is no single central authority that would set a single price for Bitcoin or any other decentralized cryptocurrency.
How is the Market Value of BTC Determined?
Crypto coin rate in the market is determined by supply and demand, like the value of any other asset. Its fluctuations are due explained by emotions and the needs of crypto coin market participants, and general market sentiment, which form the global trend of the exchange asset.
How is the price of BTC, indicated in forecasts and analytical articles, formed? In most cases, this is the average price on all or only some exchanges.
Before buying a cryptocurrency, you need to take into account that their price will differ since commissions of the exchange, payment systems and other fees will be added to it.
BTC Price on Crypto Market Sites in Asian Countries
As mentioned above, the main pricing factor for a coin is the balance of supply and demand. However, the country where the cryptocurrency exchange is located also plays an equally important role in price formation.
- South Korea. According to the BBC, this country is in third place, after Japan and the United States, in terms of the size of the BTC market. The very high demand for cryptocurrency in South Korea has led to the fact that there are at least ten digital platforms on its territory, and Bitcoin is, on average, 30% more expensive than on other exchanges. However, this does not mean that everyone will rush to sell Bitcoin exclusively on South Korean exchanges since the main requirements of these sites are to link a phone number, a Korean identification document and a bank account to the exchange account. That is the reason why South Korean exchanges have the ability to set the price of Bitcoin according to their needs.
- Japan. A similar situation can be traced on the Japanese cryptocurrency exchanges. At some points, the volume of Bitcoin trading on digital platforms in Japan reached 64% of the global one, and the cost of BTC was, on average, 5-8% higher.
- China. Before the introduction of a ban on cryptocurrencies there, the situation was reversed. If Japan and South Korea are countries with increased demand, then China, which previously had large mining capacities, used to be a country with increased supply. A huge number of miners made it possible to throw large amounts of cryptocurrency onto the market, so the “Chinese” Bitcoin was cheaper than Bitcoin in South Korea and Japan.
Many analysts question cryptocurrency rates live from Asian exchanges, as high liquidity should push Bitcoin towards a fair price, not an inflated one.
BTC Price in India and Venezuela
In India, on the contrary, there are only a couple of large cryptocurrency exchanges that create a monopoly. A number of restrictions and requirements for customers do not allow buying cryptocurrencies while in another country. This gives Indian exchanges the opportunity to offer buyers a coin at “their” price.
The economic and political crisis in Venezuela depreciated the national currency, which led to a sharp surge in the growth in demand for cryptocurrency. The owners of cryptocurrency exchanges in Venezuela deliberately inflate the cost of digital coins since the demand for them is very high. Therefore, the price on the Venezuelan sites is seriously overstated.
BTC Price in the USA and Europe
In the US and European countries, where capitalism is traditionally developed, there is healthy market competition between trading platforms, which gives the client the opportunity to choose where to buy BTC at a good price and deprives the exchanges of overestimating or underestimating the price at their discretion.
In developed countries, cryptocurrency exchange rates are set in accordance with the laws of the market. There are no artificial local factors that could significantly affect the pricing of BTC and other coins.
We could continue studying exchange cryptocurrency geography for a very long time since there are many more countries that have their own specifics. However, the information provided is enough to understand the pattern and general essence of the pricing of BTC and other digital currencies.
Buying BTC at a Good Price on the WhiteBIT Crypto Exchange
If you want to buy BTC or any other currencies at competitive prices with minimal risk, you need to pay attention to trusted sites. One of these is the WhiteBIT cryptocurrency exchange. It has been operating on the market relatively recently but already has the status of the largest cryptocurrency exchange in Europe.
WhiteBIT is a custodial platform that operates in accordance with all the norms of the legislation of the European Union. It has a high level of security. This is the best crypto exchange online users can carry out transactions 24 hours a day, 7 days a week.
WhiteBIT is suitable for both beginners and experienced users. Its interface, on the one hand, is as simple and clear as possible, and on the other hand, it has all the necessary tools for professional users.
The WhiteBIT platform takes an active pro-Ukrainian stance. Its founder and CEO, Vladimir Nosov, has been helping both military and civilians since the first day of Russia’s full-scale invasion of Ukraine. Users who choose the WhiteBIT crypto exchange also bring Ukraine’s victory and the long-awaited peace on the European continent closer.
As mentioned above, due to the decentralized nature of digital coins, there is no concept of a single market price for cryptocurrencies. If it is written in analytical reports that BTC costs $16,320, this does not mean that this is its fixed price on all sites because it can cost differently, depending on supply and demand on the local market or the exchange.