Topic: Why is the price of BTC (and any other crypto) always higher in Asian countries? - page 2. (Read 721 times)

Imagine having paid 30000$ each for a few bitcoins just before the crash in 2017 ! Man that would suck so bad !

I'm sure some bitcoiners with the right relations are living off meeting the demand with supply. Right relations to be able to get the money out of the countries where this is difficult.

Often this has to do with liquidity and demand. Now in china the difference is still very small when compared to the international aggregated price, however when you look at other Asian, south american, African the premiums can often be as high as 20% for purchases.

These differences are largely owing to a number of factors with most being linked to liquidity. For instance low liquidity in the that country or maybe just on that particular exchange. Also demand for crypto currencies would also be higher in certain countries that impose heavy capital controls and regulations on cross border transfers Iran for instance. While in some cases price differences could be due to weakness/ high inflation/volatility in the local currencies being used Venezuela here.

 Further all these  premiums are also heavily impacted by bull and bear trends. If i recall the Price of BTC in South Africa had reached nearly 30k USD at the height of the bull run in 2017.

I haven't seen anyone mentioning currency controls. In China, Venezuela, Zimbabwe, and basically all non democratic countries (and a few democratic ones too, developing ones) you have currency controls. You can't just send or receive money to/from these countries easily. That's precisely why BTC is popular there, because BTC isn't in a country, it's in a blockchain. That's also why the price is higher, because there is that demand, but no arbitrage opportunities : if I sell my BTC to someone in China, I will have trouble getting that fiat back to me in Europe. Too much hassle, too much bank fees, everything could even be blocked with no recourse for me.

Are you sure that arbitrage exists like after calculating the trading fees etc may not be much and withdrawal time etc needs to be consider? This is where the chances start to get slim though at times it may be possible, but that risk factor still exists if market rises or fall during the same time.

Maybe it's because of the double conversion? You're using USD (naturally) to assess the value of BTC in CNY. Perhaps this leads to this difference? I think Yogee suggested a similar thought. I'd also like to see some proof that there's indeed a consistently visible difference. And if we're talking about local exchanges, their price of Bitcoin can include an additional fee, that accounts for making profit when someone buys or sells there. Then again, you were talking about a different type of exchanges, I believe... So there might be a real tendency due to the local market being somewhat isolated and Bitcoin being very actively used in Asia, but I think there's a bigger chance that this tendency is not real, but arises from some assessment mistakes.

never think that its based per country but before i think its differ from company to company  . now i know that this issue also happens to other asian countries . high value prices is not new here and not just on cryptos but this applies to all items  compare to u.s and richer country that they sold all items cheaper  .

 on the crypto wallet that i used , the rates are high but some users said that other local wallets have a cheaper rate but im not familiar to it so i didnt switch out  .

In Exchanges there won't be big difference in the price between countries, but on p2p trading platforms user will get to have a difference in price between traders as well as with exchanges. This is all because of different users having different profit margin.

With exchanges that operate within specific country, there won't be much of price difference. Arbitrage trading is possible between exchanges, and majority of the exchanges located in Asia. That might also be the reason why Asian Countries have higher price always.

There are big gaps in buy and sell orders of Bitcoin to fiat and fiat to USDT. When bitcoin is dumped, sell orders don't fall at the same rate as of price of BTC on exchanges.
At the same time, price of USDT tends to go higher and higher.

What does it mean? Together, BTC price to fiat and price of USDT in fiat put traders and investors at loss at start.

If they buy Bitcoin with their fiat, they must accept higher rate than on crypto exchanges.
If they buy USDT with their fiat, they must also accept much higher rate than 1 USDT = 1 USD (convert the rate to fiat)

How to avoid the loss? Buy USDT when rate of USDT / fiat is low and keep it to wait for chances when Bitcoin is dumped to buy bitcoin.

That happens every single time! Even in my local currency, I have seen this trend and I believe it is because the buyer is willing to pay higher price or bullish about it. Usually in p2p platforms like Localbitcoins or Paxful, a higher buy price usually get more visibility among other buyers, so that can be another reason for keeping such higher price. But it's not only in Asian countries, even in Latin American countries, I have seen similar trend. USD is just a single currency to calculate bitcoin's price, it doesn't necessarily have any control over the decision process of bitcoin price. It's just an identifier!

There is no fixed prices for cryptos,it only depends on the demand and supply of exchange where you are going to trade.Probably while fiat conversion there will be high fee so traders will include it to cover the fee while making trade orders that is the simple reason why prices are higher.But no need to worry because you are going to get better price while selling as well.

This is because the price of converting a currency i.e, buying and selling is never equal. When one looks up the conversion rate for a currency to another, they usually get the official mid-market rate, in reality; this is just the mid way point between buying and selling.
So, if you're buying BTC from a exchange and paying them in your local currency, there is a high chance they would sell that to buy and hold a hard currency like the U.S dollar in their reserves, hence the increase of +4% to cover expenses.
Exchanges are businesses and put in measures to ensure they make profits.

This! Conversion rates of currencies, especially weaker ones to hard currencies are usually very ambiguous and one would get different wide values depending on what meter they are looking at. The black market rate can vary by up to +10-30% from the inter bank rate (as it does in my country).

In our country, if you want to buy BTC from some of our local exchanges, the rates depends on what local exchanges you choose. like for example you will use coins.ph:



The price varies whether you gonna buy BTC or Sell, when you buy from them. you gonna add +4% and when you sell it they deducted 4%.

In some other local exchanges, the price are not this high cause the competition is always the case here.

Note that the price of all crypto exchange site cant be the same because each exchange dealings are not the same and the Asian exchange site are expected to have more demand than supply.

This is the case of p2p local exchange site which I believe you referring to cause they particularly offer peer to peer exchange service which the price of BTC on such exchange site is determined by the seller actual price not the price of BTC in the market..
You try should to use exchange like bigone or bibox if youre offers from Asia.

It is business. Here in our place exchanges had been put to regulation and that will be subject for tax collection that will be passed on to the consumers. Aside from that another thing to consider is that bitcoin became a business and investmet to other users. The exchange does not earn in investing rather in selling and buying bitcoin. So, they are always winning and never loss money in this process. They just the one to process your oder (Selling and Buying) and they do not involve in holding btc.

before jumping into a conclusion you must consider a bunch of things first:

1. depending on where you are getting the bitcoin price from, it can different significantly. for example on a highly liquid centralized exchange like Coinbase price can be $11000 (all numbers are examples to make the point) while on a less liquid CEX it could be $11200 or $10800 and over the counter and P2P trades could be a lot different for example $11800 or $10200.
as a real example you can check localbitcoin price in a country that has no CEX and compare that price with a country that has a CEX and with the price from a CEX.

2. the spread is also important. in previous case if you paid attention i included 2 prices, one is to buy and another to sell to. that is the spread. sometimes when there isn't that much competition the seller can place a sell offer at a much higher price while at the same time buy at a much lower price and make a profit this way. so when you are comparing prices you have first figure out the type of the place then whether you are looking at buy or sell and how much spread there is.

3. it may not look it but the USD/XYZ exchange rate should be accurate, sometimes if you use the wrong value you'll end up with unrealistic results. and do the conversion yourself instead of using a website like CMC!

with all that said, in China (which you are using in your example) the government shut down all CEXes which were also very shady and were laundering money. anybody who wants to buy bitcoin has to either use offshore exchanges or buy it P2P. in both cases the price is always higher because the profit margin shrinks so they have to charge more to make profit when selling bitcoin to people.

Apart from the fact that there are more demand of cryptocurrency in Asia (most especially Bitcoin) than any other part of the world which obviously will lead to the price of coins in that area been more costly to afford than countries with less demand of bitcoin. Like there was when countries like venezuela and Zimbabwe which aren't located in Asia also recorded a high spike in the prices of bitcoin in their respective regions. The price of bitcoin is just determined by the demand naturally excluding the fact that manipulation are carried out by the exchange providers as some point to favor themselves.

On the other hand, countries not using USD as their fiat currency has a disadvantage as the exchange rate for their local currency could affect what the price of bitcoin is trading at, in a particularly exchange in the country. Example, the official exchange rate of Naira (Nigerian's local currency) per dollars is ~N382 but that's not the case on exchanges like Luno or even Binance. Luno is trading Bitcoin at N470.9 per dollars while Binance is trading at N472.5

Now using the official exchange rate to calculate what the price of bitcoin should be and that of the exchange rate for each exchange, you'll find out it'll be more costly buying on those platforms as,
Luno trades at N4,929,999
Binance trades at N4,946,501 meanwhile (using official exchange rate), the price of bitcoin should be N3,999,158. Calculation was done when bitcoin was trading at $10,469

In my opinion these exchange are calculating the price of Bitcoin based on USD value of local currency. Then there is monopoly, in your country there might be less exchange providing local fiat to Bitcoin and Bitcoin to local fiat service. This is why regulation are needed to control such exchanges.

It may have something to do with the spread of the exchange, the fluctuations of the local currency's value versus USD, premium on BTC, price adjustments not in real time, less liquidity, manipulation on the exchange, and so forth or a combination of all or some of these factors.

As of this posting, for example, the price of BTC is $10,470 which should only be ₱507,585.60, that's Philippine Peso, at 1$ = ₱48.48. However, if you look at the exchange price in the local coins.ph where people could convert their fiat to BTC, it is at ₱524,170.12.

But I remember doing a few trades with the local exchange coinspro where the spread could narrow down significantly, it was a different scenario, if my memory serves me right. I don't know if it was the delay or lack of liquidity or even manipulation but if, for example, I would place a sell order at $10,500's value in PHP, the price outside may already hit $10,600 but my sell order hasn't been filled yet. The price would then rise at $10,700, for example, and my order gets filled. Also, if I place a buy order at $10,000, for example, and the price outside is already at $9,900, it may happen that my order will not be filled as well. The price would then fall to $9,800, for example, and the order gets filled.

Concept of law and demand. There are different scale to which bitcoin and cryptocurrency volume in some countries. If the demands can keep up then it will be averaged. Maybe some Asian countries have low demand and the price cant caught with the pace of global and huge market like US and europe.

In our country, the order book also of those buy and sell have a different rate.

In summary: It's safe to assume that less people are interested in bitcoin/crypto in Asia(compared to countries like the US), hence lower exchange liquidity and lower trading volume, which leads to higher price fluctuations due to the lack of liquidity, which could lead to price premiums on Asian exchanges due to the difficulty to arbitrage between Asian and US exchanges.