Why Are Coinbase Prices Different? -

If you’ve been into crypto for any amount of time, you’ve probably come across advice telling you to “shop around” different exchanges to find the best price possible before you buy or sell. But why are Coinbase prices any different than the prices on any other exchange?

It’s because there’s no such thing as a “standard pricing” for bitcoin or any other crypto, but instead a general average estimate of what that price looks like from one exchange to the next. Coinbase prices are sometimes higher or lower than what you’d find on other exchange.

Is this a huge problem for those that are just getting into crypto?

We answer all that and more below!

How Coinbase Works

First of all, you should know that Coinbase plays a big role in setting the price for more than 100+ cryptocurrencies around the world just because of how big a platform it is.

One of the largest (some say the largest) crypto exchanges in the industry right now, more than 90 million people handle all of their crypto business on Coinbase – many of them exclusively.

Not just a crypto trade platform but also a crypto wallet (and with new tools to help people stake their crypto, too), Coinbase has a tremendous amount of information and data to pull from to figure out what the “true price” of bitcoin is at any one particular point in time.

On top of that, just the very nature of more than 90 million people using this platform to trade crypto helps to sort of “set the market”, too.

Sure, crypto prices on Coinbase may differ from other exchanges – but they usually won’t differ by much, that’s for sure.

Why Are Coinbase Prices Different?

Now that we have gotten that out of the way, let’s dig a little bit deeper into the ins and outs of why crypto prices are different on Coinbase compared to other exchanges.

Non-Standard Currency

For starters (and the point that we’ve really been hammering home so far) is that the major discrepancies in bitcoin prices across different exchanges has to do with the decentralized nature of this digital currency.

The very essence of crypto – it’s decentralization – means that there is no standard, no “global value, and no way to really peg bitcoin at a certain number universally and across the board.

Instead, supply and demand (and what the market dictates bitcoin and other cryptocurrencies are valued at) have a much bigger impact.

When you’re dealing with a large exchange like Coinbase, one with millions and millions of transactions every day, you’re able to get a much more accurate picture of what the market values bitcoin at compared to smaller exchanges that may see only a fraction of that activity.

The decentralized nature of crypto, though, is why the value fluctuates so heavily.

Average Estimated Prices

It’s also important to remember that crypto is a 24/7 market, and that means that there’s no opportunity for the market to sort of “set itself” before trading opens up again.

The overwhelming majority of prices you see on bitcoin exchanges – including exchanges like Coinbase – are doing their level best to take into account a variety of different factors that include:

Order activity
Order flow
Sentiment of the crypto market
Other market sources

… And more to try and come up with an “average estimate price”.

Yes, this means that there is a little bit less finality and concreteness to cryptos like bitcoin than there is with fiat money.

But at the end of the day platforms like Coinbase are always going to do their best to get as close to the true value of a crypto as possible. Their reputation, customer base, and entire business model depends on it!

Coinbase Fees

Coinbase fees also have a bit of an impact on the price of cryptos with this platform, something you’re probably not going to run into a ton on other exchanges.

It’s not that you aren’t going to find other exchanges that charge fees on crypto transactions like you do at Coinbase. It’s just that Coinbase fees are some of the highest in the industry.

That’s going to markup the product a little bit!

Market Liquidity

The market liquidity of different crypto assets can also have an impact on what Coinbase shows their value as

For example, bitcoin trading volume on the big exchanges like Coinbase is always going to be significantly higher than it is on smaller exchanges – and that means trading levels have a huge impact on what the going rate for a crypto is at any one particular point in time.

That’s something to remember, too.

Closing Thoughts

While we wouldn’t say that the current price of any given crypto is a wild guess at any one particular point in time, the truth is this is a lot closer to the reality of crypto pricing today than it is a joke.

Yes, crypto exchanges like Coinbase are doing their level best to figure out what the “true” value of a decentralized currency is on a 24/7 basis. But they are doing so by pulling from multiple data points – including trading volume on their own platform – and then giving the market the best idea of that value they can.

This is why you’re going to see prices on different cryptos bounce around a ton, but also why the exact same crypto could be one price on one exchange and a completely different price on another (sometimes with no real rhyme or reason behind the discrepancy, at least on the surface).

As a general rule of thumb, though, you can depend on exchanges like Coinbase to be the most accurate in their estimates of a crypto’s value.

These are where the majority of trading action takes place, they have the most data points to pull from, and they have the most influence in the crypto markets, too.

Why Are Coinbase Prices Different?