Price Differential Across Bitcoin Markets

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Price Differential Across Bitcoin Markets

Bitcoin as a revolutionary concept continues to grow with each passing day. Each week, the digital currency achieves a major fundamental breakthrough, such as the last week’s announcement of the UK government to regulate the cryptocurrency in the wake of growing popularity and amid increasing demands of a cheap, reliable financial system which does not feature a third party.

As the ecosystem grows, it is expected that more investors will enter the Bitcoin markets and the number of Bitcoin trading exchanges will rise. Therefore, it becomes imperative that we discuss the differential pricing of Bitcoin across different exchanges.

In some instances, market participants have lost their investments because they placed their orders by mistakenly confusing the price of Bitcoin on a foreign exchange with their domestic prices. Sometimes, readers argue that a price in our analysis hasn’t been reached yet, but they fail to recognize the price differential that is maintained across exchanges.

To understand this completely, readers must check out OKCoin’s Market List here. This page features the latest quotes of Bitcoin across various exchanges. A snapshot of the latest prices has been presented below:

bitcoin prices

As can be seen, the BTC-e lists the lowest price at $267.59, while the Chinese exchange BTCC is quoting the highest price at $270.11. Another observation is that the price difference between BTC-e and other US exchanges such as, BitStamp, BitFinex, and Coinbase ranges from 1 to 3 dollars. However, the Chinese exchanges such as BTC China (BTCC), HuoBi, and, all maintain a lead over their US counterparts in terms of pricing. This consideration is with regards to the spot pricings.

In order to consider the futures market, let us take OKCoin’s futures. OKCoin has an index for the futures market, which includes the prices of all major Bitcoin exchanges. Acknowledging that Chinese Bitcoin market is much bigger than US, the index gives more weightage to the Chinese exchanges. Hence, the price gravitates more towards the Bitcoin prices in China. The current index value is $269.02.

Conclusively, it is advised that investors and traders must pay strong attention to the prices on the exchange. Additionally, it must be stated that readers may benefit immensely from the aforementioned links.