▼ mtgoxUSD     95.0000  108.452     -12.404%    2428892
▼ btc24EUR     67.5047  89.036      -24.183%    348160
▼ btceUSD      82.9900  106.794     -22.289%    277286
▼ bitstampUSD  75.9900  109.320     -30.489%    249563
▼ mtgoxEUR     74.2244  88.579      -16.205%    248525

So at mtgox it's $95 USD. At btceUSD it's 82. Why the spread is so high?

  • 5
    I see arbitrage opportunity! :)
    – Volomike
    Apr 12 '13 at 14:34
  • 2
    Or, to put the question another way, why is a dollar at MtGox worth less than a dollar at btce? Jun 15 '17 at 7:17

There are a variety of variables that affect Bitcoin pricing on the exchanges. Some are:

  • Market size
  • Exchange volume
  • Price of entry

Market size: Relatively speaking, the market for Bitcoins is small. In April of 2013 it was about 1.2 billion USD, and a few days later dropped to below 750 million USD. That's a small market cap, which means, among other things, that there's less consensus on the price to the BTC. This is the capitalization for all mined bitcoins and includes coins that have been lost, so the real value is something smaller. Each exchange is a subset of the total market, so those markets are even smaller, which allows for greater variation.

Exchange Volume: For all the coins that have been mined, the quotes are only from online exchanges, which are a small set of the total coins that have been mined. If only a quarter or less are in play, then the swings can be pretty dramatic. Since the volume is limited, and people don't take full advantage or arbitrage, different prices can and will exist on the different exchanges.

This happens with foreign currency exchanges too. However, with professional traders, billions of dollars, and serious automated trading the differences are in fractions of a percent.

Price of entry: It's relatively cheap to enter the BTC market and cheap to trade. Furthermore, if you mined BTC when it was trading for fractions of a dollar, or even $30/BTC, there's no issue unloading it. With a low price of entry people are less serious about how the trade their BTC.

Fundamentally, BTC is a small, highly speculative, irrational market. Each exchange is a small, highly speculative, irrational market. That's why the spread is so great.

As a crude example: Consider two towns in the medieval period separated by twenty miles. They both have markets and people sell apples in both markets. In one market people really like apples. They pay 2 coins for the apples. In another market they aren't as enthusiastic, they only pay 1.5 coins for the apples. The economic thing to do would be to buy the apples in the second market and sell them at the first. But it's hard. It's a twenty mile walk, and all your friends are at the other market. Plus, the price could change by time you get there. It's just easier to stick with your current market, even if you're not maximizing your return.


In a market exchange, price is determined as being where buy and sell orders meet.

Buyers not needing bitcoins immediately are then most interested in obtaining bitcoins at the lowest price possible. Sellers not needing cash immediately are then most interested in obtaining the highest price as possible.

Because of differences in deposit and withdrawal methods in addition to transaction fee costs and other factors even, exchanges might not be considered equal. Therefore prices between exchanges could vary, significantly. For instance, a seller wanting to unload a large amount of bitcoins would not want to sell on a smaller exchange as that would likely mean dropping the price to meet lower and lower bids. That works against the goal of obtaining a high price.

So the price differences between exchanges are due to these exchange-specific attributes working in either the buyer's or seller's favor.

For instance, because BTC-E provides domestic cash out methods with banks that Mt. Gox doesn't support, sellers in that country (Russia) may be willing to sell at a lower price than at Mt. Gox. If it was trivially easy to transfer funds to BTC-E the price would not vary much from Mt. Gox's price but since there are differences, the lower price at BTC-E is the result.

The prices will generally travel in the same direction and to the same degree, however, they will generally remain different in price between the two pretty much consistently by about the same amount.


I think, at the moment you took those numbers, MtGox halted trading for several hours, freezing it's price.

Other markets continued trading and their prices went down. That's why MtGox seems to be so high.

The only real difference then is btceUSD and bitstampUSD, with a difference of 7 USD. I'd guess this was due to the fact that those markets are less stable than MtGox. Usually their prices tend to follow MtGox's because people will not be likely to trade at much different prices. But when MtGox went on hold, prices on other exchanges kind of crashed. Probably they just did not crash at the same speed, causing the price of the market with the least volume to decrease faster.

Currently MtGox is trading again and prices stabilized a little. However, it will always be so that (as long as it stays the largest market) MtGox's price will run ahead of the price of the others. The others mostly follow within minutes or hours, but at this time of chaos and wild fluctuations, smaller markets catch up less fast.


Part of the reason for the recent crash in price is the inability of the markets to deal with the increased number of trades.

When markets aren't working properly it's more difficult to trade to reduce the spread between them.


Front-running. It used to be rife on the mainstream stock exchanges until they made it illegal.

Front-running is where you know what your client will do next and you trade before him, knowing that his later trade will change the price in your favour.

The exchanges know how much cash their clients hold. They also have power over how long it takes before they credit you with the dollars you just sent to the exchange. They say it takes one to eight days. It should be the same value day. They can credit all clients on a Sunday night, knowing the wave of buying will start on Monday morning.

Once your coins are on the way or arrived its not worth the time or trouble to move them to another exchange.


I check some exchanges where price differs a lot and after login I found out, that these exchanges have serious technical (and probably non technical as well) problems and deposits and withdrawal are disabled. This is shifting price.

On another exchanges, some advertised prices are not what you get. For example cex.io bitcoin price is higher because it includes 7% fees if you buy it by FIAT money. The fee is included in Bitcoin price.


lets take hypothetically 2 countries / currency A and B and bitcoin

exchange A is in country A so someone exchange A currency for bitcoin. the bitcoin is mined by a miner in A - created from 'thin air'

this bitcoin is sold in exchange B in country B this same person sells the bitcoin to exchange currency B assuming that C buys the bitcoin from B

the trouble is that C is literally holding a bitcoin with no value as C would not be able to demand that A (or that miner in A) pays C in currency B for that same bitcoin

  • -1 I don't understand what argument this answer is trying to make. Please clarify how your answer is addressing the question. I'm also confused by the statement that bitcoins are created from thin air – that's not accurate, mining has real costs. Also, it's not clear why the bitcoin by C is supposed to have no value.
    – Murch
    Feb 10 '17 at 17:50
