Personal Finance & Money Asked by Money Ninja on August 18, 2021
How do they know the actual price if it’s always changing every second? Is there an algorithm they use to calculate it, or is there an authoritative source that they all go to that tells them what it is?
They use the price that people last bought or sold at themselves, across multiple sources.
Usually a site will tell you where they get their reference prices from.
Bitcoin's price is not algorithmic, it is purely from people buying and selling at an agreed upon price amongst each other, and in many places that gets reported publicly. If a buyers thinks they find a good deal on Bitcoin then they will buy at the low price (pushing the price up slightly in that place) and sell on another exchange at the high price (pushing the price down slightly at that second place) until all the prices are the same, this kind of arbitrage keeps the prices in sync.
Answered by CQM on August 18, 2021
For example, CNBC uses Coin Metrics as their data provider, which sources their data from
Over 30 of the world’s leading spot and derivatives crypto exchanges
The prices are based on the latest transactions, similar to FX quotes or stock prices.
More specifically:
Coin Metrics stores historical quotes snapshots approximately every 10 seconds for the following 19 markets.
- binance.us-btc-usd-spot
- bitfinex-btc-usd-spot
- bitfinex-eth-usd-spot
- bitflyer-btc-usd-spot
- bitstamp-btc-usd-spot
- bitstamp-eth-usd-spot
- bittrex-btc-usd-spot
- bittrex-eth-usd-spot
- cex.io-btc-usd-spot
- coinbase-btc-usd-spot
- coinbase-eth-usd-spot
- gemini-btc-usd-spot
- gemini-eth-usd-spot
- itbit-btc-usd-spot
- itbit-eth-usd-spot
- kraken-btc-usd-spot
- kraken-eth-usd-spot
- liquid-btc-usd-spot
- liquid-eth-usd-spot
Answered by 0xFEE1DEAD on August 18, 2021
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