You can find several videos in the Venmo app explaining some of the basics of crypto currency. Go to the Crypto section of the Venmo app to check them out!
What is a price “spread”?
Price spreads are the difference between the highest buy order and the lowest sell order on any exchange. Every purchase or sale of cryptocurrency occurs in a marketplace, and between two entities. The person buying wants the lowest price, and the person selling wants to get the highest price at any point. This creates a gap in their expectations, known as a spread.
That's why the price you can buy at may be higher than the price you can immediately sell at.
How do spreads affect the market?
Depending on the situation spreads can lead to increased price volatility, and price variation amongst crypto exchanges.
Pricing of cryptocurrency seems to vary based on which service I'm using. Why? Am I getting the best price with Venmo?
Crypto price variation is common across crypto exchanges, and happens for a number of reasons:
- Crypto trading volume at a large vs. a smaller exchange with less liquidity can impact price.
- Pricing and fee structure at time of purchase is set by the exchange/service, which can also vary.
- Price 'spreads' might impact the purchase price.
It's important to understand pricing before making any purchases.
Why is there an exchange rate for cryptocurrency?
Since crypto is digital money, you're essentially swapping one currency for another when you buy and sell it. The exchange rate tells you how much crypto or dollars you'll get in the swap and refreshes often because the value of crypto is constantly changing.