It is normal for Bitcoin (or other digital currencies) prices to differ across Exchanges due to the following factors:
- Unlike the currency market, the prices of Bitcoin are not fixed.
- Each market liquidity is unique.
- The user demand and supply vary (Bitkub vs International) in each Exchange's market.
- You can check the coin prices at https://coinmarketcap.com/
rankings/exchanges/
*** Bitcoin prices are determined by market liquidity as well as current demand and supply. For example, at the beginning of January, the price of Bitcoin in Iran became overpriced when compared to the global market price of 7,350 USD as a result of Donald Trump's Baghdad international airport strike, which caused Bitcoin trading to surge to nearly 24,000 USD (with Iranian rial).”
Arbitrage: Making profits from 2 marketplaces
- Arbitrage is the practice of making profits from the margin by buying something at a lower price and selling it at a higher price between the Bitkub Exchange market and other markets or vice versa.
- People will make arbitrage trades "only when they make profits," causing the prices on the other exchanges to be comparable.
- For example, suppose the global price of Bitcoin is 10,000 USD (~ 317,000 THB), and the price on Bitkub Exchange is 300,000 THB. We can buy Bitcoin from Bitkub Exchange which costs 300,000 THB and then sell it at 10,000 USD (~ 317,000 THB) on another market where the price is higher. From this example, if we buy Bitcoin from application A and sell it on application B, we can make a profit of 17,000 THB.
*** The USD price or an exchange rate must also be considered when trading on many Exchanges.
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