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Bitcoin Cash Questions

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divergence.PNG

 

Why is there such a large divergence between the major exchanges and the IG price?

Also the spread is huge and is literally changing every few minutes

Will we get a lower minimum contract size on the mini?

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Hey - I'm not sure if you've seen the Crypto mega thread, but hopefully it should answer a number of your questions. For convenience I have copy/pasted a couple of points below. We are currently reviewing our minimum bet sizes, and i'll pass your feedback onto the desk, however at the moment minimum values are unlikely to change. 

 

How does IG price Cryptocurrency?

Bitcoin and Ether is priced by taking a number of different price feeds from some of the largest exchanges and liquidity providers, and wrapping the IG spread about the best bid and offer (sell and buy price) in real time.

 

We price cryptocurrencies in a similar way to how we price our FX markets.  There is a video below which is worth watching, especially from the 2 minute mark, which explains our currency pricing model.

 

 

 

What impacts Bitcoin and Ether spread?

At IG we know that spread is an important factor for our clients, and we have worked hard to create some of the narrowest in the industry for FX, commodities, futures and other asset types. We are continuing this with crypto currencies but there are unique factors affecting these digital assets which mean that the difference between the buy and sell price (the spread) is larger than normal.

 

The market is still in its infancy and liquidity is relatively low. The majority of exchanges we deal with (which are some of the largest exchanges in the world) only have a few coins available at the touch price. For example, if you were to deal 1 CFD contract for Bitcoin (USD) your trade would be the equivalent of buying or selling 100 coins on exchange.

 

Cryptocurrency is priced on multiple exchanges, but there isn’t a singular ‘best bid and offer’. Therefore you get a number of different quotes which need to be taken into account. The list below is an example of the divergence in price on Bitcoin/USD at the moment of going to print for some of largest exchanges by volume (for the preceding 24 hours).

 

Exchange

Pair

24hr volume

Last traded price

Exchange 1

BTC/USD

$158,317,000

$4215.40

Exchange 2

BTC/USD

$66,580,500

$4212.43

Exchange 3

BTC/USD

$56,507,600

$4220.00

Exchange 4

BTC/USD

$52,349,100

$4220.10

Exchange 5

BTC/USD

$25,996,400

$4236.93

Exchange 6

BTC/USD

$22,151,800

$4347.95

Exchange 7

BTC/USD

$18,488,400

$4299.81

Exchange 8

BTC/USD

$11,558,100

$4216.61

Exchange 9

BTC/USD

$6,298,700

$4209.35

Exchange 10

BTC/USD

$4,844,130

$4263.70

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I know I keep bring this up, but... The ability to take smaller size positions would really up the number of spreadbets I place.

 

For example, I was looking at Bitcoin Cash, but at £10 per point, even when BCC was in the £350 range, it's was way too much risk for a small investor like me. Obviously, I wish I'd had the **** to buy it then!

 

On the fees side (I'm classing spread as a fee), I'd say IG is good, if you look at the overall cost. All the exchanges I've looked at charge a fee for funding (in fiat) or you have to pay a transaction fee to the network (e.g. BTC). Then on top, exchanges typically charge a percentage fee both when you buy and when you sell. (The only reason I trade Cryptos elsewhere is to buy smaller amounts.)

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Hi  - sorry that it's taken me a while to get back to you - this comment slipped passed me. When you first brought this to my attention and I discussed it with the desk they dropped the minimum bet sizes for CFD accounts only. There must have been miscommunication because I assumed they also dropped spread betting bet size. 

 

I double checked and saw that the minimum bet size was £1/pt, however I've spoken to the desk and they have reduced it to the requested 50p. I hope this is beneficial for yourself and the wider community. All the best. 

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Brilliant, thank-you so much. And I see the minimum size for BitCoin Cash have also come down to much more sensible levels.

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thanks  and nice rundown on thoughts  - I did however have a question TF. What do you see as a scalable and useful 'use case' for Bitcoin Gold?

 

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