How do exchanges work? | Bitcointalksearch.org

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

I think this is because the difference in buying momentum that occurs on one exchange does not immediately change the price of all exchanges. If large purchases occur in an exchange, the price on the exchange will rise significantly locally and it will take some time for the data to update globally. But this price difference does not last long, but there will still be a slight price difference. This is what is utilized by a certain group of traders called Arbitrage. They use this price difference to make a profit.

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

I think this is something that usually happens if we look at several exchanges. This is because the price displayed on an exchange is based on the most recent orders. The number of transactions that occur on each exchange is definitely not the same at one time, thereby increasing the price on one exchange, even though there is still no price change on the other exchange. But this will not last long because there will be another correction after a few minutes so that the price is closer to the same.

But you have to be careful in looking at price differences on exchanges that are not well known. It's possible that an exchange that looks cheaper is a fake exchange that attracts prey. Be aware of it and always use verified and reputed exchanges.

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Quote from: lixer on March 14, 2024, 10:00:32 AM

Crypto supply will always be higher than the demand because they are usually millions or more than that. Price change can also be termed as volatility. The volatility is higher when more people are selling apart from buying a coin. Price can go low if there are less demand and it happens due to several reasons like people are in crises but if not, maybe the exchange or the coin have only gone bad.

OP is talking about rates, and by that I think the services fee of an exchange is also covered with it. This is the same to what you said about how an exchange operates, this is why it is important to analyse them if which exchange will suit us according to our needs.

I do agree that volatility is important for an exchange because it means there are a lot of people trading in that situation and if people are trading then they are doing a good job. I know that trading fee is the way to make money for these places, so when there is volatility that means they make the most money.

If we are talking about just the fee, then the fee depends on the power of the exchange that can ask it, one that asks higher means that they know you won't leave with higher, and the one asking lower means they are trying to get you to use them. The prices however are a different topic, these days I do not think that there are many places with different prices, I do not believe that many like that stayed until this day.

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Quote from: $weetne$$ on March 13, 2024, 11:43:39 PM

Quote from: Patrol69 on March 13, 2024, 10:54:24 PM

A crypto exchange is like a market, where all the products are arranged and buyers and sellers buy and sell their products in the market as well as an exchange where users buy and sell their coins. What we observe in the market is that if there is a high demand for a product, then the price of that product increases, on the other hand, if there is a large quantity of a product in the market, but the demand for that product is low, then the price of that product is very low.

This would had been my word too, exchange are just a platform that connects the buyer and seller and the price difference on the different exchange is based on the traders on the different exchanges. Some exchange have more active traders and they'll be willing to buy more at a higher price because they believe the price of the coin is about to rise because of a news about the coin that'll make the demand of the coin to increase. Without exchange it would had been very inconveniencing to be buying and selling cryptocurrency because of the scammers that would had been scamming new Investors that don't know how to make use of P2P sites very well. Newbies are still getting scam but the numbers aren't many unlike how it would had been if we didn't have exchanges operating.

Newbies are most likely to get scammed by fraudsters. You know about a subject surely you don't do wrong knowing about that subject but when newbies don't know about a subject and when they are not aware of such deception but they fall into the trap of such deception. However, even though fraudsters' cheating strategies have changed compared to earlier, people have become more aware, so fraudsters can't cheat users much now. P2P trading is definitely one of the best features for various exchanges as it allows you to buy and sell your own dollars or other currencies without third party transactions.

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The variation in price is influenced by many things which could range from 5he exchange personal reasons. Sometimes various exchanges apply price variation probably to help them pull traffic to their platform or even help them get a certain number of users on their platform so as to increase the volume of transactions probably daily or weekly, monthly and annually depending on their preference a d what they aim to achieve with the price variation, sometimes the could actually manipulate Price for awhile and later return it to normal.

If the exchange suits you then you could work with them based on their price or their preferences which suits you too depending on what you aim to achieve using the platform.

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In my experience, exchange prices can vary due to factors like demand, supply, and transaction fees. The volume of trading on an exchange can also influence its price. Since exchanges update prices independently, they may differ from one another based on the latest orders. It's something I've noticed while navigating the crypto market, as mentioned by others here.

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Quote from: adpinbr on March 13, 2024, 09:29:07 PM

Yes, it is just simple. It is just an analysis of demand and supply when the demand is more higher than the supply the price changes a lot and it gets higher and at that point, the rate is pumping higher it also the same thing to different exchange. The price can also go low. The supply is higher than the demand. It also affect so different exchange has the different value and how the operates. you can actually check different exchange and compare and see how the Peace is sometimes exchange with his different from the orders and you asked why that is because of the operating system of the exchange traffic is on the exchange maybe the supplier any of this is between the two demand supplier, we have different exchange. If you take your time and compare how they operate and go to the trading side if they have, you will understand what I am talking about changing values and what causes it.

Crypto supply will always be higher than the demand because they are usually millions or more than that. Price change can also be termed as volatility. The volatility is higher when more people are selling apart from buying a coin. Price can go low if there are less demand and it happens due to several reasons like people are in crises but if not, maybe the exchange or the coin have only gone bad.

OP is talking about rates, and by that I think the services fee of an exchange is also covered with it. This is the same to what you said about how an exchange operates, this is why it is important to analyse them if which exchange will suit us according to our needs.

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Quote from: Patrol69 on March 13, 2024, 10:54:24 PM

A crypto exchange is like a market, where all the products are arranged and buyers and sellers buy and sell their products in the market as well as an exchange where users buy and sell their coins. What we observe in the market is that if there is a high demand for a product, then the price of that product increases, on the other hand, if there is a large quantity of a product in the market, but the demand for that product is low, then the price of that product is very low.

This would had been my word too, exchange are just a platform that connects the buyer and seller and the price difference on the different exchange is based on the traders on the different exchanges. Some exchange have more active traders and they'll be willing to buy more at a higher price because they believe the price of the coin is about to rise because of a news about the coin that'll make the demand of the coin to increase. Without exchange it would had been very inconveniencing to be buying and selling cryptocurrency because of the scammers that would had been scamming new Investors that don't know how to make use of P2P sites very well. Newbies are still getting scam but the numbers aren't many unlike how it would had been if we didn't have exchanges operating.

Patrol69

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A crypto exchange is like a market, where all the products are arranged and buyers and sellers buy and sell their products in the market as well as an exchange where users buy and sell their coins. What we observe in the market is that if there is a high demand for a product, then the price of that product increases, on the other hand, if there is a large quantity of a product in the market, but the demand for that product is low, then the price of that product is very low. Among all the listed coins, the coin which is in high demand tends to increase in price and if a big investor sells all his coins at a relatively low price, it has some bad effect on the market i.e. the market does some dumping. One person buys and the other sells. This is how exchanges usually work.

adpinbr

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Yes, it is just simple. It is just an analysis of demand and supply when the demand is more higher than the supply the price changes a lot and it gets higher and at that point, the rate is pumping higher it also the same thing to different exchange. The price can also go low. The supply is higher than the demand. It also affect so different exchange has the different value and how the operates. you can actually check different exchange and compare and see how the Peace is sometimes exchange with his different from the orders and you asked why that is because of the operating system of the exchange traffic is on the exchange maybe the supplier any of this is between the two demand supplier, we have different exchange. If you take your time and compare how they operate and go to the trading side if they have, you will understand what I am talking about changing values and what causes it.

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Quote from: Kakmakr on March 04, 2024, 07:32:29 AM

So guys... be safe out there and protect your coins. It's crazy season and the scammers are very active.

Besides the reasons you have talked about there are many others and one of them which I think is the most prominent is, when bull run or new ATH is going to make, many newbies in the hype of making money joins the crypto market and in that hype they want to avail every opportunity and they started to give importance to each and every offer they see. Either they are seeing it on Twitter, or on TG or even on their emails. They don't think for another second as most of them don't have the knowledge of how scam happens in crypto.

So, these newbies are basically the main targets of the scammers, and once 2 or 5 out of 100 fall prey to these scams, the hackers, or scammers make enough money. I suggest to these newbies, that they should get some knowledge before getting into BTC, as knowledge will make you more competitive, otherwise, you will lose your funds in the market. But I have to admit that High price = more scams But in bear market, many new comers also joins as they think this is the right time, and that time many scammers are active in the market. I think the level of scams is a little confusing to predict by considering the hype of the market. We should use indicators to calculate this fact.

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Quote from: Bushdark on January 26, 2024, 01:38:32 PM

Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

We need to be very careful on how e trade without stop lose. This can become a big problem to us.

I will like you to emphasize more on the stop loss of a thing. Do you believe the exchange see when you are trading with a stop loss and when you are trading without it? I have always had this believe that there is definitely something watching where you placed your stop loss and will go trigger it and it it will reverse immediately it is triggered.

Arbitrage traders make and regulate the difference between prices in exchanges and earn a living from there. I think that exchange owners has little or nothing behind it.

adpinbr

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The exchange rate is been controlled by the buyer and sellers in the particular exchange. All depends on the both parties, but I just wanted to know that, even if the rate is different from from order exchangers it will not be much difference, but I will be a slight difference, but the difference it won’t be much the particular exchanger, I just want to explain this to you, so you see how it works in an exchange for example, someone want to sell the person My decided to look at all of which people are selling then person may decide to sell lower or little higher from what others are selling or we decide to sell if another person comes the person will look at the last person that is higher than the rest and top is all her own rates. It’s going high when did demand how much the rates will be going high gradual process when the demand happens to be higher than than the supply. and this process usually happen in different exchanges and that is why the rate are not the same and you cannot control the rates, and then simply means rates have been controlled from the P2P trading in different exchange, for it cannot really , be determined

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

Exchanges function under the same principles than any other business or market, lets suppose that you want to buy a smartphone, if you take the time to do a small research you will notice that almost all stores will have a different price for the very same model.

But why is that? After all we are talking about the very same product, and while there are many reasons for this, transportation costs and profit margins are two of the most important factors that make the price of the same good to be different on each store and it is your job as a consumer to find the best offer, and while exchanges do not work exactly in this way, the principles which dictate the price of an asset are the same, as each exchange has its own supply and demand and this makes the price of the same asset to be slightly different.

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Quote from: el kaka22 on January 25, 2024, 01:58:21 PM

The fact is that everyone said basically the same thing but also different things basically shows that people do not really read. Most exchanges do not show different prices, sure maybe for an instance, but usually they don't. If one exchange had such a different price than the other then we would probably see someone arbitrage it away anyway.

So, the question itself is moot, I would love to see OP provide proof that there are 2 exchanges who have more than 1% difference between prices. In fact, better yet, OP should just use this information to do arbitrage, because if one has different price than the other, you could very well make money off that. The question is wrong, there isn't any price differences between exchanges.

I agree with you for cryptos having a deep liquidity, there are too many trading bots tracking orders above or below the price of other exchanges, buying and selling those opportunities instantly, to keep different prices for a long time. Exchanges use such bots themselves to make extra money. But on small cap coins, markets have higher spreads and less liquidity and you can find good opportunities sometimes. Anyway differences on large cap cryptos are mainly due to fees(trading fees and withdrawal fees).

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

Sometimes exchange want to make there own money in the best way known to them. Sometimes they would not want to reduce liquidity because there are way they can keep traders in fear of loising there own funds. This can also be a reason to lure more investors and traders to there exchange to depositing there coins. Exchanges makes more money from us in case we don't understand how that works.
We need to be very careful on how e trade without stop lose. This can become a big problem to us.

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

The price basically depends on the buy and sell amount of a particular coin. If you know basic economics, then it depends on the policy of supply and demand. If the supply is sufficient to fulfil the demand, then the price doesn’t fluctuate a lot, but if it’s not possible, then the price really goes up and down. On the other hand I have seen the price of coin in popular exchanges always remain same. So price fluctuations aren’t a big deal at all.

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The difference in prices for each exchange is due to the demand and supply on each exchange being different, but generally the price differences on each exchange are not too different.
as an example
on the exchange A has a demand of $1000
on exchange B there is a demand of $100, so it is quite natural that it is different, I think the price difference will not be too big between exchanges A and B

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

That's because they are two different exchange and due to low or average demand going on that trade. It is the same thing when there is a demand on a coin, one tend to go up faster than the other especially on the one that has the highest volume but the price difference are just slightly different. If the price difference is very high, that's when you see traders doing arbitrage trading. Traders will start buying from an exchange that is lower in price to sell in the one that has high price and the demand on the lower will adjust itself to meet the other one.

It's a common thing you see on centralized exchanges, you hardly see it on decentralized exchanges and that's because they use chainlink data feed so as to get the accurate price for a coin and because it's a decentralized data, it's hard for people to temper with it or even manipulate it.

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The fact is that everyone said basically the same thing but also different things basically shows that people do not really read. Most exchanges do not show different prices, sure maybe for an instance, but usually they don't. If one exchange had such a different price than the other then we would probably see someone arbitrage it away anyway.

So, the question itself is moot, I would love to see OP provide proof that there are 2 exchanges who have more than 1% difference between prices. In fact, better yet, OP should just use this information to do arbitrage, because if one has different price than the other, you could very well make money off that. The question is wrong, there isn't any price differences between exchanges.

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

Crypto trading operates on decentralized platforms, allowing users to buy or sell digital assets like Bitcoin and Ethereum. Traders use exchanges to execute transactions, leveraging market analysis tools for decision-making. Prices are determined by supply and demand dynamics, with trades recorded on a blockchain for transparency. Various strategies, including day trading and long-term investing, are employed. The market's 24/7 nature, high volatility, and technological innovations create a dynamic landscape, attracting a diverse range of participants. sorry I saw how exchange works.

Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

Exchanges can have varying rates for the same currency due to factors like liquidity, demand, and platform-specific dynamics. Differences arise from disparities in supply and demand across exchanges, resulting in varying prices. Additionally, factors such as transaction fees, trading volumes, and regional market conditions contribute to rate distinctions. Traders exploit these variations through arbitrage strategies, taking advantage of price differentials between exchanges to maximize profits.

Do not take more than 10x leverage, may lost maximum trades.

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

The reason why coin prices vary on different exchanges is that the entire trading depends on the traders. Investors arrange orders in different ways and many buy more or less coins when BUY. Not everyone buys the same amount of coins, which can lead to different prices on different exchanges depending on the order. But too high price is not too low, it is normal to be slightly too low.

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

This is because of the instant buy sell pressure of that exchange. Sometimes a exchange can have a big buy and sell order with low liquidity, which drives the price ups and downs more than other exchanges. Actually this price difference doesn't last for long, as any arbitrage trader may find it and take the opportunity. They also sometimes exchange themselves to fill the gap to match the price of the global market. But this is normal to have a little spread in price compared to the other exchanges.

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

When it comes to cryptocurrency exchanges, we know that there are two types of exchanges: centralized and decentralized platforms. Because the mechanics of these two, although different, can provide earnings to traders, in Cex it is the order book, while in Dex it is usually liquidity pools that, when depositing, often put money into crypto pairs.

When it comes to fees, both exchanges benefit from withdrawal fees, deposit fees, and trading fees, whether on centralized or decentralized platforms.

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

When it comes to price then it would really be that different on which it would be considering about the activity in between sellers and buyers on that particular platform on which this is the reason on why those numbers would be different but we do know that numbers couldnt really be just that too far off when it comes to that because it would really be that a arbitrage opportunity with those traders who would really be able to snipe out with those price differences on which it would really be just that right that you should really that know on what to do or just common sense but platform wouldnt really be allowing for it to last because arbitrage could really happen.This is why its better not to bother yourself with this.

Some points to remember at least- a bit off topic.
1. Dont make exchange as your main wallet of your assets, its not something a wallet that you could possess its private keys.

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I would like to add here too something I learnt about that's different in crypto than when I did forex.

All the explanations above are very good, reasons why prices are different everywhere despite selling the same asset, true to the market forms of demand supply pricing etc.

However, I would say that a lot of "exchanges" actually don't even fall to that. There are no orderbooks, meaning, no sellers/buyers/makers/takers, but just a price based on a fixed spread between quoted buy and sell.

To illustrate, Luno calls itself the biggest crypto exchange in Philippines at one point but there is no orderbook. You simple sell crypto to them, or buy from them. There is no market making/taking. Luno doesn't even have a supply. It just takes your BTC and sells it for better price. Or other way around.

hugeblack

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

Your definition of the word higher may give you a more accurate answer, as the price that appears on sites such as CMC^[1] is an average price, each platform has a specific price for Bitcoin that varies every second with trading volumes, but most of these CEXs are around this average price, and the difference is usually between 1% and 2% in The best conditions are especially for Bitcoin due to its high liquidity, but you may get different prices in:

- Buying Bitcoin from auctions: After Bitcoin is confiscated by governments, it is usually sold at a public auction. Prices are often slightly different from the price of Bitcoin according to the auction.
- Buying from OTC: These are highly regulated markets and deals in them are worth millions or even billions of dollars.
- Buying from P2P: Due to weak supply and demand, you may buy Bitcoin from a person or a P2P platform at a price that is different from the average price.

So, inside CEXs, the price may be different, but it is usually in the range of 1% and 2%, and liquidity may create some higher rates for some time, and outside CEXs, it may be different for above reasons.

[1] https://coinmarketcap.com/

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

The trading volume on each exchange is different. and it is also influenced by demand and supply in a particular exchange.
Maybe you have heard of traders using arbitrage. they take advantage of the price difference from certain exchanges to make a profit.
This arbitrage trading situation makes it possible that there will be the same price adjustment in a short time on each exchange. I don't think the price difference that occurs on each exchange is too big. the moment may happen very quickly when pump and dump.

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Quote from: Sim_card on January 19, 2024, 02:41:29 AM

The demand and supply on exchanges make the exchange price rate differs, also they transaction fee that the exchange charge is also another factor. The market volume of the exchange, because some investors favor an exchange by keeping their assets in the exchange. It is impossible for exchanges to update their price at the same time and the price, therefore will be from the latest order on that exchange. Just as mentioned by the posters above.

If the exchange is in-demand, transaction fees might also be high. But maybe some exchange lower it because they still can earn sufficient income from the number of customers they had. And they think it attracts more people if they will lower their fees. I think that the market volume is already related to the demand and supply that you said earlier, so it may be fine if you won't say it.

But, what can I do? You already said it anyway lol. As an investor, it would be safe to keep our assets on the non-custodial wallet and not on a exchange. I don't think it's impossible for the exchange to update their pricing immediately. We are not in the 1980's anymore Cheesy

. There must be a reason for it that they only knew on why they prefer not to update it.

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

Because different exchanges have different users and different capital from their users who are buyers and sellers. Those users will have different buying and selling orders and order sizes. Price change on each exchange will be decided by trading volume, buying and selling walls and you will not see all the same across many exchanges.

If you notice, Coinmarketcap and Coingecko will have their baskets of some exchanges and use their formulas to calculate average trading price of Bitcoin and other cryptocurrencies.

How are prices calculated on Coinmarketcap
Coingecko's Price methodology

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Quote from: tyz on January 18, 2024, 05:02:11 PM

Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

The price is made by supply and demand. If demand on an exchange is greater than supply in the short term, prices can rise more sharply there than on other exchanges and vice versa. However, this is usually only the case in the short term because there are many so-called arbitrage traders who use price differences between exchanges to buy cheaper on one and sell more expensively on the other. As a result, the price usually adjusts quickly across exchanges.

He should understand that exchanges operate independently and the supply and demand in each ones determines their prices of crypto coins, and the law of basic economics applies in them, so if demand is much and supply is less in an exchange price will slightly increase and if supply is greater than demand in the same exchange price will slightly reduce. Although among exchanges price differences are not much, as you nareted, traders can buy cheaper in one exchange and sale higher in another exchange, thereby creating a near price balance.

Sim_card

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The demand and supply on exchanges make the exchange price rate differs, also they transaction fee that the exchange charge is also another factor. The market volume of the exchange, because some investors favor an exchange by keeping their assets in the exchange. It is impossible for exchanges to update their price at the same time and the price, therefore will be from the latest order on that exchange. Just as mentioned by the posters above.

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Quote from: mk4 on January 18, 2024, 11:34:21 PM

[...]
Note: an exchange having more "expensive" price doesn't automatically mean it's better to sell on that exchange. It will heavily depend on liquidity and market depth.

I would like to add something here, as this has already happened to me.

Even if an exchange has a better price, you should inform yourself in advance about the following points, otherwise the better price can quickly turn into the opposite:

Are there deposit fees for certain coins on the exchange?
What are the trading fees for the respective coin (e.g. it makes a difference whether you use a broker like Bitpanda or an exchange like Kraken Pro, here the difference in fees can be in the percentage range.
What are the withdrawal fees of the target coin (or FIAT) and is the withdrawal possible at all without further ado

Exchanges like to work with hidden costs, so higher prices for certain assets could also be "bait offers" for customers.

Negotiation

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

It mostly depends on how many people trade on which exchange, if the volume of transactions is high then it depends on how many orders are there. When many people trade together, the price is slightly lower. Again, in the case of low or high prices, sometimes there is a role of some experienced traders.

mk4

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It totally depends on the buyers and sellers on the exchange. Bitcoin or a certain coin/token is more expensive on exchange A than on exchange B because:

1. One exchange might have better liquidity(hence better, more accurate pricing) than the other
2. Someone recently made a huge market buy(or sell) on the exchange, hence suddenly prices are more expensive(or cheaper)

Note: an exchange having more "expensive" price doesn't automatically mean it's better to sell on that exchange. It will heavily depend on liquidity and market depth.

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hi Jonnytrader1988 welcome to trading, by the way you already have what crypto exchange? maybe you can mention it, your interest seems to be in trading even when you first appeared at this time, or you are used to one exchange to build your portfolio? I don't understand and if you explain maybe you can discuss, the fact is not all exchanges are honest. It could be that a coin is higher priced than other exchanges but there is a minimum withdrawal, higher withdrawal fees and less ntwork, so fair isn't it? Cheesy

or more extreme that if a new exchange that is not very well known will make a price impact and suspend withdrawals at will, for me the coin price is more expensive on that exchange can be said to be useless.

For me, choosing an exchange that has many visitors (look at the history and agenda on Twitter in organizing events, how enthusiastic) and has feedback that does not tarnish its name is very important. It is better that the price is reasonable the difference with other favorite exchanges and not too big, even though the new exchange will certainly be more appreciated and visited, if you want arbitrage choose some of the highest 5-10 rating cex on CMC or Coingecko and for local exchanges know your risk and maybe the local council around you.

batang_bitcoin

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That is normal and dynamic on this business. The rates are being done and adjusted by the demand of their traders and that's why it might be cheap on the other side and expensive on the known ones. That's because the exchange are just like the middlemen of this market.
Although for some market trades that they can do, they're the one that sets the price but still along and in line with the market price. I thought that you're going to ask on how they profit and if that's the next question on your mind then they earn from commissions each trade and as well as with the listings.

I also want to you give you some warning that if you've seen some exchange that has higher rates than the usual for selling or lower rates for buying. DYOR first, because it could be a scam exchange that will just trap your deposits. That's the reason why it's still best to rely on good and reputable exchanges, dex or cex.

decodx

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

I've seen those ads on YouTube too claiming they'll pay like 10% over market rate or whatever. Definitely makes you go hmmm.

I mean if it sounds too good to be true, it always is right? My guess would be either straight up scam trying to lure folks in or just super low liquidity so good luck trying to actually sell at that inflated rate they claim. Either way, probably best to just steer clear and

stick with the reputable mainstream exchanges that have been around a while. May not be quite as flashy but least you know they're legit and you can cash out your coins if you need to. Gets too dicey playing around with these fly-by-night operations just trying to make a quick buck. Better safe than sorry when your hard-earned moneys on the line.

logfiles

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

This is quite simple logic. It is because there are different buy and sell orders in different exchanges' order books and different traders taking orders at the same time. You don't expect them to have the same orders being executed at the same time.

Dr.Bitcoin_Strange

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

If you look at the price difference on those exchanges, it's usually not much of a difference. What I mean is that you cannot see Bitcoin trading at $40k in the "A" exchange while it's trading at $43k in the "B" exchange. The difference is not just too far, and the reason has already been mentioned in the first comment.

There are different exchanges, and a lot of people around the world are using most of those exchanges, and they are setting their different buy and sell orders, so it depends on the last executed order. That's when you will see a little price difference in one exchange compared to another.

For example, if someone places an order to sell Bitcoin at $42,800 on the Binance exchange and another person places a sell order of $42,200 on MEXC, if the second order first gets excused, the price of Bitcoin on that exchange will drop to $42,200 until another order is executed too.

tyz

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Quote from: Jonnytrader1988 on January 18, 2024, 03:23:33 PM

My question is why is the rate higher on one exchange than on another?

The price is made by supply and demand. If demand on an exchange is greater than supply in the short term, prices can rise more sharply there than on other exchanges and vice versa. However, this is usually only the case in the short term because there are many so-called arbitrage traders who use price differences between exchanges to buy cheaper on one and sell more expensively on the other. As a result, the price usually adjusts quickly across exchanges.

Oshosondy

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The price is displayed based on latest traded trading orders. People are trading on different exchanges and they can not all buy and once and sell at once in a way the prices will be the same access all exchanges.

You can read these to know better:

https://zipmex.com/learn/why-crypto-prices-different-each-exchange/
https://learn.bybit.com/crypto/why-bitcoin-prices-differ-across-exchanges/

Jonnytrader1988

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My question is why is the rate higher on one exchange than on another?

Topic: How do exchanges work? (Read 568 times)