Why are crypto prices different across exchanges?

Whether you’re looking to invest in Ethereum, Solana or Bitcoin, or any other cryptocurrency for that matter, you’ve probably noticed that prices are different across exchanges — even when you’re comparing on the same day at the same point in time. Sometimes these price changes are dramatic too, fluctuating anywhere from one percent to five percent.

So, what gives? How can a cryptocurrency trade at different prices?

It’s important to remember that, firstly, cryptocurrencies don’t have fixed, standard prices. Crypto isn’t pegged to any currency, like the USD or Euro, and it isn’t linked to a particular country either. Instead, as with commodities of all types, their supply and demand changes depending on the time and the market. If supply decreases or demand increases, the price inevitably goes up.

Secondly, exchanges are not connected. Prices vary depending on the activity on each exchange.

Crypto exchanges sell coins and tokens at different prices based on a few key things:

1. Fees: Most exchanges require transaction fees. Some exchanges offer very low fees which reduces the cost of acquiring coins. Hubkoin, for example, has some of the lowest fees, providing more options for traders.
2. Trade volume and liquidity: Although there are hundreds of exchanges operating around the world, there’s a huge disparity in trading volumes between them. In other words, different exchanges may have different levels of supply and demand. Bigger exchanges have a higher volume of trade than smaller exchanges and therefore have more supply and vice versa. The volume of trade directly impacts the price of a cryptocurrency.

Looking to buy crypto but not sure where to do it? Choose a secure Canadian exchange — like Hubkoin — that offers low fees and useful features, like the ability to easily and cheaply transfer money to and from your bank account.

“We’re not going to drain every cent out of every transaction. We’re going to use the lowest fees that we can use to survive,” says Robert Watterson, Hubkoin’s managing director. “We want to get Ma and Pa in this and not price them out.”