Financial Insights That Matter
Ripple CTO David Schwartz recently weighed in on a discussion on X sparked by a post by a user who pointed out a disparity in Bitcoin prices on Coinbase. The cryptocurrency market experienced volatility in the early Monday session, with Bitcoin falling to a low of $102,105 after reaching a high of $107,137 earlier.
The X user pointed out the gap in the Bitcoin price on Coinbase, saying, “Bitcoin is currently $103,500. If you want to buy on Coinbase, they charge $104,500. If you want to sell, it’s $101,950.”
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The post drew the attention of the Ripple CTO, who responded by offering insights into the mechanics behind Coinbase’s pricing model. Schwartz inquired, “Are you placing offers on their order book, or are you using them as a broker to buy and sell? The pricing for these two services is very different.”
Schwartz’s response highlights the difference between placing offers on the Coinbase order book and using the platform as a broker to buy and sell, with each having its attendant costs.
Spread explained
The discussion between the Ripple CTO and the X user highlights the concept of spread when buying or selling cryptocurrencies, which is the difference between the asset’s current market price and the price at which it is purchased or sold.
Crypto exchanges, such as Coinbase, frequently include a spread in the price at which users buy and sell cryptocurrencies and an exchange rate when users convert.
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Following Sunday’s gain, the crypto market reversed direction in the early Monday trading session, with nearly all major cryptocurrencies trading lower. XRP fell 3.91% in the last 24 hours to $2.31. Bitcoin climbed to an all-time high of $107,137 early Monday before reversing course and falling to an intraday low of $102,105.
According to CoinGlass data, more than $669 million in crypto holdings were liquidated during the recent market volatility, with bullish positions accounting for $465 million and short positions accounting for $203 million.
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