Bitcoin buy price vs sell price
Revolut Crypto allows users to effortlessly buy, hold and exchange cryptocurrencies in any of the 25 fiat currencies supported by the app. As soon as we launched, we were bombarded with questions from our community who wanted to know how Revolut Crypto works behind the scenes, learn where our exchange rates come from, and discover how we could provide instant access to crypto.
Traditionally, cryptocurrencies are bought via online exchange websites. You can think of these as the digital equivalent of your local farmer's market, but for virtual currencies. Similar to how farmers and locals meet at the market on the weekend, buyers and sellers get together on virtual exchanges such as Coinbase or Bitstamp to buy and sell their juicy crypto produce.
On the exchange, people indicate how much cryptocurrency they would either like to buy or sell, and how much for. This is known as placing an order. For example, Bob wants to sell his Bitcoin. Hence, the price a seller quotes on the exchange is known as the ask price. Once the order is placed, the exchange will look through its order book trying to find a matching order to complete the transaction. Thus, the price quoted for a buy order is known as a bid price.
As soon as a match is found, the transaction is automatically completed and both orders are filled. Since market participants quote prices on the exchange, there will always be at least 2 different prices - one for buying bid price , the other for selling ask price.
On the right, the orange line shows all the available SELL orders the exchange is constantly trying to match with the green BUY orders, on the left. These lines move in realtime to reflect existing orders being filled and accommodate new orders being placed every second. The vertical line in the middle is called the Mid Market Price , or mid rate, which gives the average value based on all the prices advertised for all the different buy and sell orders for that specific currency pair.
When you search for any crypto live rates on Google, you are usually quoted a mid market rate. Most orders get filled somewhere in between the market rate and the outer limits of the graph, where both order price and size increase.
To provide exposure to cryptocurrencies in a matter of seconds, Revolut has partnered up with a number of market leading exchanges. When you buy crypto via the Revolut app, you are quoted live rates on the exchange screen. These rates are streamed directly from the exchanges we work with and are calculated based on the current ask price. We use the ask price because you are effectively buying from sellers on the exchange who send Sell orders quoting an ask price, or in other words, the minimum amount they're willing to sell their crypto for.
These rates are computed as a Volume Weighted Average Price, before our 1. This means that we provide the average price of a currency pair that is exchanged over a certain period of time. The resulting rate is displayed on screen and, once you commit to the exchange, that rate is locked in. Bitcoin and other cryptocurrencies can be bought on online exchanges such as Coinbase , bitfinex , or Gemini. Bitcoin can also be bought at Bitcoin ATMs , at machines throughout the region, at a slightly higher cost.
People also will sell Bitcoin privately after arranging meetings through Craigslist or Reddit. Kevin Werbach , an expert in financial tech at the Wharton School, offers two explanations. The number of people trading cryptocurrencies on Coinbase has tripled this year to 13 million, according to Bespoke Investment Group. Cryptocurrencies are also widely held in Japan, China and especially South Korea. As Bitcoin has come into the light, some restaurants, real estate companies, and car dealers will accept it.
Cryptocurrencies have been widely embraced overseas, especially where people lack ready access to credit cards, and for international money transfers. Few buyers understand how Bitcoin works , let alone grasp its underlying architecture and that of all the other 1, cryptocurrencies. But off-shore exchanges do not.
In addition, cybercriminals have reportedly been scouring servers for unsecured bitcoin wallets, where private bitcoin accounts are stored, and cleaning them out. If you take the plunge, keep your records secure and in triplicate.