If you’ve traded Bitcoin or any other coin across different crypto exchanges, you’ve probably noticed different prices for the same coin. Another currency like Ethereum can be ₦500,000 on one exchange and ₦507,000 on another at the same time. This can be frustrating especially when you think you’re not getting the best deal or you’re being cheated. But when it comes to cryptocurrency this is normal because the rates are determined by demand and supply.
Cryptocurrencies like Bitcoin are not controlled by any organisation. So their value comes from how many people are buying or selling them.
You can compare this situation to a lake that has Catfish in it. Let’s say that different people come from all over the world to catch the fish and sell it. Even though it’s from the same source, the price of the catfish in Lagos is different from that of Benin. This is because the demand and supply of Catfish is different in each place.
How You Can Benefit from the Price Difference on Crypto Exchanges ?
Here’s a pro-tip: The awesome thing about having different prices for the same coin on several cryptocurrency exchanges is that you can arbitrage. This means that you can buy a currency like Bitcoin where it’s cheaper, transfer it to your wallet on another exchange where the price is higher and sell it for profit. This is the method some people use to cash out when they don’t want to hear stories that touch with charts.
Too Long, Didn’t Read (TL:DR)
Short story is that the demand and supply of the platform/crypto exchange determines the crypto prices. And the price difference is sometimes a sweet opportunity to make money.
