Bitcoin has experienced tremendous growth over the past year, which has caused it to attract a great deal of attention from the financial community.However, the method by which the value is calculated has not been given as much consideration as the process by which it is calculated, particularly the process by which Google (or any other source, for that matter) calculates the value.
In the case of Bitcoin, it is not uncommon for the price of this hugely popular cryptocurrency to vary from one exchange to another across the world if you search for more than one cryptocurrency exchange at the same time. This is one major difference between conventional currency which is centralized and digital currency which is known to be decentralized.
But the question is, why does the price of bitcoin vary from one exchange to another? Let us find them out in this article today.
No Standard Pricing Regulations Are Provided
Due to the decentralized nature of cryptocurrencies, the price of Bitcoin, and all cryptocurrencies generally, is not predictable at any particular time. Compared with fiat currencies such as the USD or Euro, cryptocurrencies have no connection with fiat money, countries, or even exchanges.
As you are considering whether or not to purchase crypto like bitcoin or maybe even sell it, you will find that supply and demand are subject to fluctuations depending on the market and the time you decide to take action.
Liquidity of Bitcoin
There may be a much higher bitcoin trading volume on larger exchanges, such as Binance and BitForex, than on smaller exchanges. The price of cryptocurrency fluctuates across these exchanges due to the difference in supply. At the present time, there is no established pricing procedure for Bitcoin or cryptocurrencies in general. Due to this, no one knows precisely what the price should be at any given time, and the price is determined solely by the trading levels at that time.
There are many sites on the Internet that provide information about the price of bitcoin, but how can you be sure that the results are accurate? You will not be able to achieve this in reality. Cryptocurrency price trackers either calculate an average estimate or use recent bitcoin trades on major exchanges to determine their price. As an example, the value provided for bitcoin comes from the Coinbase API.
Fees for transaction
There is a transaction fee that is charged by most crypto exchanges, which adds yet another layer of inaccuracy to the final trade price. If you choose an exchange to conduct your transactions, you should always read the fine print and do your due diligence. Compared to the value of your trade, the fees charged by most crypto exchanges are relatively low.
It is generally accepted that the more popular exchanges charge between 0.1 percent and 0.2 percent in fees, but you can find some excellent deals with some research. In comparison, Binance charges 0.1 percent in fees for traders who do not use BNB (Binance…