Spread — The Highest Risk To Lose Your Crypto Gains In Seconds And How Everyone Can Avoid It
To really understand spread you have to understand how the price of an asset is formed. Therefore we will have a short digression into economics more accurate microeconomics the supply and demand curve.
The price of an asset is formed by supply and demand. Thus the price of an asset is where the supply and demand meet. As we know in the crypto space this can change rapidly every second. In the graph above the demand for $CRO is rising. Therefore the Demand-Curve moves to the right.
As a consequence, if the supply stays the same, the price of $CRO goes up.
Every crypto exchange is its own market with its own supply and demand. Therefore on different exchanges the price of $CRO can be different because of differences in supply and demand.
There is always one party that wants to sell $CRO for a specific price and there is always a party that wants to buy $CRO for a specific price. As long as those two prices are not the same no trade occurs. The difference between those prices is called the spread. This spread can be visualized with a depth graph:
The green line cumulates the amount (y-axis) of $CRO which will be bought at a given price (x-axis) and the red line cumulates the amount (y-axis) of $CRO which will be sold at a given price (x-axis) on the Crypto.com exchange. The spread is the empty space between the green and red lines and represents the price difference. Therefore if you would buy $CRO at the market price, the price of $CROs would be the lowest price point of the red line. If you would sell $CRO at the market price, the price of $CROs would be the lowest price point of the red line.
The Crypto.com Wallet App works like this. Your sell and buy order will be executed at these market prices and there will always have the worst rate possible. This also applies to other cryptocurrencies. As a rule of thumb, you can say the more trading volume a token has the lower the spread, and the lower the trading volume is the higher the spread.
If you want to buy or sell your $CRO at a given price, use the Crypto.com Exchange with the limit order!
If you want to stay up to date on the essential Crypto.com and Crypto.org metrics subscribe to Crypto.com Stats Twitter Bot and make sure to tick the bell icon. 🔔 Also check out the Crypto.com Stats Telegram Bot. 🥳
Do you want to keep the Crypto.com Stats project alive? Donate by signing up with my referral links:
😇 Use my referral link https://crypto.com/app/nppyfer8jq to sign up for Crypto.com and we both get $25 USD.
💳 Ready to rule your money? Sign up to Curve using my link to get a £5 welcome gift. 🤝 https://www.curve.com/join#N78M9WVE
😎 You can also use my referral link for the Crypto.com Exchange https://crypto.com/exch/nppyfer8jq, just have a try.
🙃 Do you need a fully functional crypto tax tool? Try CoinTracking
https://cointracking.info?ref=Y171016 with 10 % off.
🚨 Disclaimer:All information without guarantee - my content is not investment advice and should not be used as a basis for your investment decisions.I only share my opinion on current topics and price developments of various cryptocurrencies. I don't know the future either and therefore recommend that you take every statement with caution.Do your own research and get a comprehensive picture before investing in cryptocurrencies. Only use money that you can actually manage to lose and always be aware of the high risks of cryptocurrencies. A total loss is possible at any time.
