“Why there is a difference between buying & selling price on CoinSwitch Kuber?”
This message and hundreds of more such messages we get every day from our amazing CoinSwitch Kuber users highlighting their concern about the difference between buying and selling prices of different cryptocurrencies.
Hundreds of messages or even more because more than 4,00,000 users have trusted this new asset class of cryptocurrencies through CoinnSwitch Kuber.
But a little apology for the delay, we genuinely wanted to give a detailed and simple answer to your question through this post to help you continue to succeed in your crypto investing journey with us.
First Things First
There is no universal agreed-upon mechanism to derive the price of any cryptocurrency, including Bitcoin, on any exchange or trading app in the world.
So it might sound weird when I say Bitcoin’s price is actually what someone is willing to pay while engaging in a trade with another party at this moment.
On top of that, crypto markets are small relative to traditional markets. They are segregated country-wise as well as fiat currency wise as different small liquidity pools across the world.
India, too, has its different exchanges, including CoinSwitch Kuber- which fairly does its utmost to fetch you the most from the scattered pool of liquidity spread across exchanges and hence provide you the best price at any given point in time.
Table of Content
Why There Is a Difference In Buy & Sell Price?
Coming back to the difference between the buying and selling price of a cryptocurrency, you decide to trade on CoinSwitch Kuber.
For starters, the difference is called the bid-ask spread.
This spread exists in all markets irrespective of whether you trade cryptocurrencies, stocks, bonds, or forex, so it is not something that CoinSwitch Kuber decides, but the market decides.
To simplify it even more, this gap or difference between the lowest asking price (sell order) and the highest bid price (buy order) is called the spread.
To make your user experience seamless, CoinSwicth doesn’t show you complicated order books or behind the scenes activities but simply presents the best possible buy and sell prices to you at any moment.
Why Buy Price More Than Sell Price?
As I just said, any trading markets work on spreads, i.e., the difference between the buy and sell prices; it is natural that one of these prices will be high and one lower.
But for all practical purposes, Buy price is more than Sell, and we don’t decide that, but the amount of liquidity in the market decides that.
And when I say liquidity, I simply imply how much demand and supply is there for the cryptocurrency in question that one is trading.
To give you a perspective, don’t you think if Sell price was more than Buy of any cryptocurrency, you could have simply bought that coin in huge amount and sold it for an instant profit??? 🙂
Sure, it might sound like a good deal for you or anyone else, but that wouldn’t be a market then, so these spreads or gaps in prices ensure that the market works properly.
Similarly, when you see, let say, the price of Bitcoin on CoinSwitch Kuber under the ticker, ‘current BTC Buy Price,’ what in fact, it is showing you is the latest price someone bought BTC in the latest trade that happened on CoinSwitch Kuber.
In technical terms, it is called the last traded price of a commodity, and in this case, it shows you the last traded price of Bitcoin.
Let say the price is now 10,62,335 INR as per this latest screenshot shows below:
And now, when you go and open the SELL tab on CoinSwitch Kuber and try to Sell Bitcoin, for example, you will definitely see the price lower than 10,47,001 INR because of the above-explained reasons.
Even other markets work the same, have a look:
CoinDCX’s Price Counter
Ashok Leyland Ltd
Why Was My Actually Order Executed At A different price than it was shown?
This is a very tough question that many CoinSwitch Kuber users ask as it not possible for anyone else to tell at what price you decided to execute the order because this only you know.
But I will attempt to clarify by giving a sneak peek of how CoinSwitch works behind the scenes but for now, let’s understand that when you access CoinSwitch Kuber, you are accessing pooled liquidity through a simple interface where you are just required to enter your INR value that you wish to exchange for the cryptocurrency you choose.
So CoinSwitch keeps on auto-refreshing the best prices from this pooled liquidity. Hence, users who might not have paid attention to auto refreshed price might, in all likelihood, have seen a difference in price after their order execution was complete.
Remember that CoinSwitch Kuber promises you a fixed price on something that is constantly changing in actual price every 30 seconds.
For example, the ETH price is nothing more than its last traded price on CoinSwitch Kuber, so by promising you a fixed price we are taking a liquidity risk because there could be a chance there is no liquidity to fulfill your order. Hence, prices are also reflective of this conservatism factor, which comes from taking a risk on your behalf and having no cover…
How CoinSwitch Kuber Works Behind The Scenes To Give You Best Rates?
CoinSwitch Kuber has a unique operating model that no cryptocurrency trading app in India is doing.
CoinSwitch Kuber ensures that the best rates for INR to cryptocurrencies and cryptocurrencies to INR are available for all its users by working closely with pooled liquidity providers within and outside India. This ensures that Indian consumers have sufficient access to liquidity anytime they decide to buy or sell a cryptocurrency.
Why Bitcoin & other cryptocurrency’s price is different on CoinSwitch Kuber than other exchanges?
This is another most asked question by our users. Some even go so far as comparing our prices with international exchanges (why our prices are different from international exchanges 🙂 ), thanks to their love and zeal for cryptocurrencies.
As I shared at the start of this article, there is no universal agreed-upon mechanics to decide the price of a particular currency, so put simply, If you may ask what the price of Ethereum (ETH) is?
I would say it is nothing more than its agreed price someone paid in his/her last trade on that particular exchange in question.
The crypto market is still tiny compared to traditional markets like Forex, etc. There are different exchanges in each country offering cryptocurrencies, which makes the small market even more fragmented.
The buy and sell prices you see varies across exchanges is based on the bids those exchanges receive on the cryptocurrency. The buy-sell prices you see are updated directly from the markets we are using to provide liquidity to you, and the difference you are seeing is the current spread in the market.
So buy and sell prices differ on all exchanges in cryptocurrencies especially.
Summary: Your Best Interest Is Our Best Interest
CoinSwitch Kuber is a product of CoinSwitch- a globally renowned cryptocurrency aggregator based out of Bangalore since 2017.
We aim to provide the best experience to Indian retail users to get the most out of this new asset class of cryptocurrencies.
That’s why we are aggressively innovating to provide you a simplified experience in the crypto world, and so far, 400,000+ users have trusted us with this mission of ours.
Your interest is in our best interest, and we will continue to get stronger and better in all the areas as we continue to get support from our users.