Why the Bitcoin price differs in different countries
As the price of Bitcoin continues to rise and more people start using cryptocurrencies, we’ve had a lot of questions like this:
“Why is the Bitcoin price so high/low on Luno compared to the price shown on Google and other exchanges?”
There’s no standard or global Bitcoin price. Unlike many local currencies, Bitcoin isn’t pegged to anything (meaning it’s fixed to another currency or asset like gold.)
It’s like asking: “Why does a bag of rice cost more in one supermarket, city or country compared to another?”
It’s all down to supply and demand. Without a currency peg, Bitcoin prices shift depending on how many people want to buy and sell them, at what price, and in what quantity.
Let’s dive in a little deeper for a more detailed look.
The exchange rate on Google
When you type in “1 BTC to USD” in Google, you might get a result like the one below.
The rate provided by Google and other Bitcoin price trackers is usually an estimate or a recently traded price on an international exchange. Google uses the Coinbase API, which gives an estimate (excluding fees.)
Even if you had US dollar in a Coinbase account, the price you’d pay would be different to the one Google shows, due to fees and other factors.
Customers from our countries of operation sometimes search for the price of Bitcoin in their home currency: the Indonesian rupiah (IDR), South African Rand (ZAR), Nigerian naira (NGN) or Malaysian ringgit (MYR).
When you search for “1 BTC to MYR”, for instance, Google shows you the estimated exchange rate of 1 BTC in US dollar, as on Coinbase at that moment, and that dollar amount converted into Malaysian ringgit.
Not every platform that allows you to buy and sell Bitcoin with Malaysian ringgit will trade at that exchange rate.
The price displayed on Luno is unique. The supply and demand — set by buyers and sellers- are unique and therefore different from other exchanges.
Price at time of writing on https://www.luno.com/price
👉 To be clear: Luno does not set the price of Bitcoin. We’re a platform that allows people to buy and sell it.
On supply and demand
Exchanges are places where people who have Bitcoin can sell to those who want it.
If you have two exchanges — Exchange A and Exchange B — that both support USD and BTC, the price on each will be whatever supply and demand dictates.
If an exchange sees more people selling than they are buying, the price will drop. The same goes for more people buying than selling.
So, if Bitcoin trades at different prices on different exchanges, is there money to be made?
If I can sell 1 BTC for 10,999 MYR on Luno, but 1 BTC only costs 9,699 MYR, do I make an instant 1,300 MYR profit?
Common in Bitcoin and other markets, this process is known as arbitrage.
If you have identical items — say avocados or Bitcoin — and they fetch a higher price in one place than another; people will buy and at the same time, to profit from the difference.
It seems simple: just buy all the avocados (or Bitcoin) in the supermarket, city or country where they are cheap. Then sell them where they are expensive. Soon, the novice trader will realise that it is a little trickier than expected.
In the same way that it isn’t free to send avocados from one place to another, it’s not “free” to transfer currencies between countries and platforms.
That doesn’t mean that it doesn’t occur. It just doesn’t happen everywhere, all the time.
But we’ve also seen the opposite happen: Bitcoin trading for less than it does on international exchanges. It all depends on the market conditions.