The same real-time cryptocurrencies can show different values depending on the exchange you check. For a trader, this isn’t a system error, but a common situation: on one platform, the Bitcoin exchange rate may be higher, and on another, lower. Why does this happen? And can you make money from it?
The cryptocurrency exchange rate isn’t a universal amount centrally set by any authority. Each exchange sets its price based on its own internal dynamics: supply, demand, liquidity, and many other factors. Let’s explore what determines the price of cryptocurrencies, why their value can vary across exchanges, and how this can benefit a knowledgeable trader.
Factors That Influence Cryptocurrency Prices: What Causes Prices to Rise and Fall?
Many variables influence the price. First and foremost: supply and demand. The greater the interest in an asset, the more it's bought, and the faster the cryptocurrency price increases.
Another factor is liquidity. On exchanges with high trading volumes, RTF coin or any other asset will trade with a lower spread than on less active platforms. These platforms also tend to form a more accurate exchange rate for the cryptocurrency, closer to the "market average price."
The exchange rate is also influenced by:
- The informational context, both positive and negative;
- The mood of large players: sudden buy/sell actions by "whales" can move the market;
- Geopolitics and regulation: for example, news about crypto legalization in a country or mining bans;
- Fundamental updates: hard forks, mergers, introduction of new technologies, etc.
More broadly, what else determines a cryptocurrency’s price beyond just news? The reputation of the blockchain, level of decentralization, community activity, and real-world use.
Why Does the Value of Cryptocurrencies Differ Across Exchanges?
Now to the core issue: why can the price of the same coin differ on different platforms?
- Regional factor: Exchanges targeting different countries respond to local demand. For example, if there is more interest in altcoins in Asia, crypto values may be higher there.
- Different liquidity levels: On less popular platforms, trading volumes are lower, making price changes less stable and more prone to jumps. This opens up arbitrage opportunities for traders.
- Different trading pairs and volumes: For example, if one exchange sees most volume in the BTC/USDT pair and another in BTC/EUR, this affects how the cryptocurrency exchange rate forms. Volume, spread, and market maker activity all contribute.
- Lack of centralized pricing: No cryptocurrency has an official price. The exchange rate forms within each platform based on its order book and trader activity. Therefore, prices across exchanges are always slightly different—and that’s perfectly normal.
- Exchange authority and reputation: Platforms with fast execution, strong security, and user-friendly interfaces attract more trading activity, creating more stable exchange rates. Exchanges with poor reputations often suffer from low liquidity and imprecise quotes.
- Speculation and manipulation: Large holders ("whales") can influence prices on specific exchanges—for instance, creating the illusion of demand to inflate prices and then selling at a profit.
- Force majeure and unpredictable events: Hacker attacks, technical failures, sudden delistings, or network news (e.g., hard forks) can drastically shift the exchange rate within a single platform.
The factors determining a cryptocurrency's price are a combination of demand, liquidity, informational context, and geographical specifics. That’s why prices can vary from one exchange to another.
For a trader, this isn’t a problem—it’s an opportunity. Price differences create fertile ground for arbitrage: buy low, sell high. The key is to consider transaction fees and potential delays.
