Spread
A spread is the difference between the price at which you can buy and sell crypto. This difference is a cost when you trade.
What is a spread?
In crypto, there are always buyers and sellers. The bid price is the highest price a buyer is willing to pay. The ask price is the lowest price a seller is willing to accept.
The spread is the difference between these two prices. A small spread usually means lower costs when buying and selling. Transaction fees may also apply on top of the spread.
An example of a spread
Suppose the bid price for Bitcoin is €29,950 and the ask price is €30,000. The spread is €50.
If you buy for €30,000 and immediately sell for €29,950, the difference is €50 per Bitcoin. This doesn’t include any other costs.
Why is a spread important in crypto?
A wide spread makes buying more expensive and selling less favorable. This is especially noticeable when someone buys and sells crypto frequently.
A small spread often points to a lot of trading and enough buyers and sellers. A wide spread can occur when trading is low or prices are moving sharply. It doesn’t automatically mean a crypto is good or bad.
News about turmoil in the crypto market, liquidity, or sharp price movements may mention the spread. This helps you understand why an order is sometimes filled at a less favorable price than expected.
