bitcoin

Who sets the Bitcoin price? | Bitcoin price differences explained

how's it going guys I hope everyone is

having a great day today today I'm going

to do a video explaining to you guys who

sets the Bitcoin price a lot of you

often ask why's the Bitcoin price

different in South Africa on our

exchange Lu know compared to another

exchange in the US for instance but

Phoenix or Y when I google the price of

Bitcoin does Google give me a different

answer too you know so today I'm going

to hopefully explain to you guys why the

price of Bitcoin is different and give

you an idea of what the actual price of

Bitcoin is so first you guys we need to

discuss a little bit about how markets

work and I want to clear up some

misconceptions around what Bitcoin

actually is so one misconception that I

often hear is that Bitcoin is managed by

a company and the owners hold all of the

Bitcoin and they are selling them into

the market that is not the case cars

bitcoin is not centralized like that

is decentralized different people hold

small amounts of Bitcoin all over the

world and there is no company that runs

Bitcoin Bitcoin is a commodity and the

market sets the price so it's a

commodity like oil like sugar like any

other commodity and the market

determines the price based on supply and

demand in each market so if you have a

particular market for Bitcoin where

there is a huge supply of Bitcoin and

not much demand for Bitcoin the price

will be much lower then a market where

there is a larger demand for Bitcoin and

not that much supply so in South Africa

we only have three or four exchanges

where you can buy a Bitcoin and the

demand for Bitcoin in South Africa is a

lot higher if you look at the Google

Trends which I'll pull up a screenshot

of right now you can see that South

Africa is leading the world in Google

searches and this is percentage based by

the amount of people in each country but

South Africa is leading the world for

Google searches of Bitcoin which means

in our markets with not that many

exchanges so not that much supply and a

lot of people googling Bitcoin and

searching for Bitcoin are wanting to get

into Bitcoin in South Africa so there's

a lot of demand the price of Bitcoin is

a lot higher in South Africa than it is

in other places like in the East in Asia

there's a lot more exchanges so there's

a lot more liquidity a lot more supply

the same as in the US and there are big

mining operations in both of these

countries so there's a lot more supply

that is added to these markets

whereas in the South African market and

a lot of smaller markets is

that much supply to go around okay so

then what is the official price of

Bitcoin well there is no actual single

official price of Bitcoin like I said

each market determines its own price

based on supply and demand within that

particular market so you can see that

from country to country and this is a

screenshot I've pulled up from coin

market cap I'll link it down below you

can see all of the markets at Bitcoin

trades on and you can see how much those

markets are trading Bitcoin for

converted into dollars so you can see on

BitFenix which is an exchange based in

Hong Kong which services mainly

customers obviously with US dollars you

can see that when at the time of the

screenshot Hong Kong this exchange was

trading around nineteen thousand four

hundred dollars now over in Korea but

coin was trading against the Korean Won

at twenty thousand dollars so six

hundred dollars higher that just simply

means that at this time when the

screenshot was taken there was more

sellers on the market above which means

the price was lower or there was more

buyers and more demand for Bitcoin on

this Korean exchange which is why the

price is higher now as I mentioned even

if you google the price of Bitcoin lock

for instance if you google the price of

Bitcoin in South African Rand Google

will give you a completely different

number to the actual price of South

African Rand now why is this well

because Google is taking the South

African Rand it is seeing how many South

African ran to the dollar and then it is

multiplying that by how much Bitcoin is

trading for in dollar terms on an

American exchange so it takes an

American exchange price takes those

dollars and converts it to how many Rand

that would be so this is basically an

estimate of the rand equivalent of

bitcoin over in the US

whereas on Luna this is the actual price

of Bitcoin because Luna shows you the

price that the lost Bitcoin or the lost

price that some Bitcoin was traded for

in South Africa so at the time of these

screenshots which were taken about two

minutes apart you can see that Google

was telling us bitcoins are two hundred

and fifty seven thousand because it's

multiplying the dollar value of Bitcoin

by how many dollars to around or how

many rounds to a dollar and then you

know the South African exchange is

giving us the actual price of Bitcoin in

South Africa so when you google it

you're not going to get the exact price

of Bitcoin unless you are looking at you

know specific price or the exchange

where you are

Trading so again what is the real price

of Bitcoin well the real price of

Bitcoin gas is what you can actually buy

and sell it for in the previous screen

shot you saw that if you were looking to

buy Bitcoin and you googled what is the

price of Bitcoin in south-africa Google

would tell you that the price of Bitcoin

was two hundred and fifty seven thousand

rand and then you go over onto a south

african exchange like luna and you see

the prices over three hundred thousand

rand and you think is this exchange

ripping me off or luneau manipulating

the price is the bitcoin company

charging anymore for bitcoin than it's

actually worth no that is not the case

guys number one Luna is in exchange they

don't do any of the trading they just

allow a platform they creates a platform

for SS traders to come and exchange

Bitcoin and rands with one another now

the - like I said bitcoin is not a

company so there's no CEOs or

shareholders that are manipulating the

price it can only be buyers and sellers

of people who are actually holding

Bitcoin so when you look at Google and

you see the price of two hundred and

fifty seven thousand Rand and you go to

Luna in the process three hundred

thousand Rand Luna is not ripping you

off the Google price is incorrect

because it's taking the price or for US

market and Luna is giving you the price

of what Bitcoin actually is based on

what the last trade of Bitcoin in South

Africa was so like I said guys you must

take the price of Bitcoin from the

exchange you use not from Google and

like I said in the previous screen shot

you saw that in South Africa the price

of Bitcoin is actually three hundred

thousand rand at the time of that

screenshot and not two hundred and fifty

thousand rand because you Google is not

selling you the Bitcoin Luna is where

you're going to be selling you selling

or buying the Bitcoin so that's where

you're going to be trading your Bitcoin

that's where you must get your price

from now gas lunar is just one exchange

and even on this particular exchange

there is different prices between the

different currencies so I'm now taking a

screenshot of all of the different

markets that lunar offers you can see

that trade against the South African

Rand I think the Malaysian Ringgit the

Nigerian naira and the Indian rupee and

they all do different volumes South

Africa obviously leading the volume by a

long shot there and you can see that

because South Africa's leading the

volume in other words a lot more Bitcoin

is being traded in South Africa you know

like 30 times more Bitcoin is being

traded in South Africa than in Nigeria

and as a result the price was almost 4

dollars higher at this time in South

Africa so Luna is just one exchange and

the price varied between the markets on

that one exchange and even in one

country in South Africa we have three or

four different Bitcoin markets and the

price can sometimes vary between those

markets as well and this is all because

of the supply and the demand on a

particular market if there's a big

seller on the one market and it keeps

suppressing the market that market is

going to trade below other markets where

there might be a lot more buyers okay

guys so to conclude this video bitcoin

is like every other market it is a

commodity and the price is determined by

supply and demand the exchanges are not

manipulating the price there are no

shareholders or CEOs that I'm going to

place in the price the price varies from

country to country and exchange to

exchange and this is purely because of

the supply and demand in each and we're

looking at the price of Bitcoin don't

Google it don't look on the US market or

whatever you can to get a reference but

if you're looking to buy a sold Bitcoin

look at the exchange and get the price

from the exchange were you actually

going to be buying and selling that

Bitcoin so yeah that's gonna be it guys

thank you so much for watching if you

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the next video Cheers