Since the start of 2021, Bitcoin (BTC) price has been chasing new highs on a weekly and daily basis. Vào tháng 2. 21, BTC reached a new all-time high at $58,300. Tuy nhiên, an interesting phenomenon is that even with many global cryptocurrency exchanges in existence, BTC’s price can still vary greatly depending on geography.
This raises an intriguing question. How can Bitcoin price simultaneously trade at $53,047 in Malaysia, $49,727 in Singapore, $51,133 in India, and over $86,000 in Nigeria? Is the reason simply a temporary imbalance between buyers and sellers, taxes, quy định? Or is there something else at play?
Như trong biểu đồ bên dưới, there really isn’t a set price for BTC as nearly every country has its own digital asset valuation.
At any given time, cryptocurrency prices will differ between countries, even after adjusting the currency rate. Thật, some additional buying or selling pressure could create discrepancies, but that should not be continuous and steady.
What’s causing the huge BTC price discrepancies?
This phenomenon isn’t something new or exclusive to cryptocurrencies, Tuy nhiên. Exxon Mobil stocks, ví dụ, are traded in the United States, Nga, Argentina, nước Đức, Mexico, and Switzerland markets.
While there may be different reasons for the friction including bureaucracy and nation-specific laws, they’re basically the same asset. Tuy nhiên, their prices usually differ after adjusting for currency exchange rates.
Unlike stocks, Tuy nhiên, transferring cryptocurrencies usually takes less than an hour, and it doesn’t depend on custodians and depositary receipt administrators. vì thế, bureaucracy can not be the reason for the big price differences for Bitcoin, which is borderless.
Mặt khác, suppose one just bought BTC in the U.S. or Europe and is willing to sell it in Argentina to profit from the 6.5% difference. Even if there were no trading fees involved, the result would be the local currency, Argentine Pesos ARS.
Things get more complicated though, as one will need to convert this fiat money back to USD or EUR. There might be domestic restrictions, taxes, or even worse, a different currency rate for foreigners. hơn thế nữa, traditional currency remittances don’t take place on weekends and usually take one or two business days.
Not surprisingly, the countries with the highest BTC valuations consistently score low on investment and financial freedom global rankings. Barriers and taxes created by strict government controls translate into additional risks and costs for the fiat conversion and remittance. This all contributes to the premium seen versus the remaining countries.
Government action might create extreme situations
Extreme capital control situations such as the Nigeria Central Bank recently shutting down all cryptocurrency-related bank accounts could be behind the current 70% premium versus global BTC markets. But Nigeria likely has the highest premium in the world because this country, đặc biệt, is also the leader when it comes to Bitcoin adoption, based on the latest data.
#Bitcoin Price is now $80,000 in Nigeria – a 60% phí bảo hiểm.
That’s what happens when you try to ban something people want.
— Bitcoin Archive (@BTC_Archive) Tháng hai 18, 2021
Cuối cùng, arbitrage traders will find a solution to bypass sanctions, and the price gap should tighten. But right now, there is no effective way to “lợi nhuận” from the arbitrage.
For those wondering what would cause Bitcoin to trade below most liquid markets such as the U.S., there is no definitive answer. It is most likely some regulatory hurdle for depositing fiat money on local exchanges, thus creating an imbalance favoring the sell-side.
The negative premium is less common, Tuy nhiên, and stablecoins could be used to mitigate this effect. Trong khi đó, when a hefty premium is seen in local fiat currency, it does not justify a similar price gap for dollar-denominated stablecoin trading.
Như vậy, such differences in pricing across various countries represent the risks, red tape, taxes, and inefficiencies of converting fiat between currencies and sending fiat money across borders.
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