Many of us are serious traders in the hive ecosystem, and it is entirely possible for people to generate a good passive income through internal trading. I don't do much trading on the internal market, but every now and again, especially these days, I'm interested in buying and selling hive/hbd to make a profit.
IS THAT SPREAD, THE TRANSACTION FEE?
When it comes to crypto exchanges, I am a regular user of Binance and prefer to trade on this platform due to the cheaper charge commission. I've done several hive trading in Binance, and the fees they chop off are roughly 0.2 to 0.25% for one entire trade. However, if you have BNB in your wallet, the fee is decreased to 0.1%, making the transaction more profitable.
However, when I checked the price of HIVE and HBD on the internal market, I found a fluctuating spread. Let us define spread and explain why it exists in the internal market. The spread is the price difference between the buyer and seller bids. For example, if a buyer sets a buy price of $0.4 and a seller sells at $0.396, there is a $0.04 spread.
The spread value varies depending on the volume and buying and selling demand. Many of us are under the misconception that they are cutting transaction costs, but in reality, no fees are being eliminated. I was initially sure that this was due to transaction costs, but I afterward realised that it was due to the low volume spread and some other reasons which are discussed below.
Another cause for the spread is that the buyer and seller don't agree to sell at the same price and modify their buying and selling, resulting in the spread. One thing to keep in mind is that spread is not a price that other exchanges charge. However, there is no spread in exchanges because there is sufficient volume, allowing the buyer to buy the coin.
EXPLAINED PRICES DIFFERENTIALS
However, if you wish to trade, there is no need to be concerned about spreads in the internal market. You can trade while keeping the spread in mind for effective transactions. Also, as you may have seen, the pricing value in the internal market differs from that of the Binance exchange. If the price of Hive in Binance is $0.41, the price in the internal market is $0.406 due to the price of the HBD.
If the price of HBD falls below $1, the price of the hive will rise, and vice versa if the price of HBD rises over $1, the price of the hive will fall. This is why the price in the internal market and the price in the exchange are not the same. There will always be a pricing differential because the HBD is not fixed at $1.
To summarise the post, there is spread in the internal market due to limited volume; buyers and sellers express their prices in the form of spread, which is the difference between offer and bid. Also, the price of the hive differs in the internal market from that of exchanges due to the price of the HBD.
This is an attempt on my side to provide you with information regarding the hive internal market and the spread. Also highlighted was the pricing gap between the internal market and exchanges. These are my opinions, and it is possible that I am incorrect on certain issues, for which I apologise and want your advice.
I hope you found the post interesting and that you enjoyed it. If you like the post, please leave feedback in the comments section so that the next one will be even better. Thank you for sticking with me until the endd.
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IMAGES AND GIF TAKEN FROM CANVA,BINANCE EDITED IN CANVA
SOURCE
INTERNAL MARKET
