I'm looking for some pointers to learn more about how the crypto market works.

Specifically, I'd like to know more about why the latest price listed against the graph UI on coinbase doesn't correspond to the price when I actually click on buy/sell.

For example, if the price of eth is x and you want to buy 10 eth, the price per eth is usally x + <spread> , contradicting the latest price shown against the graph (disregarding transaction fees).

Per this post, I understand that it's because the graph price just displays the cheapest asking price across all amounts of eth. When buying a specific quantity, the price charged is bound to be different since the quantity isn't going to correspond to that of the cheapest ask price.

I have two questions:

  • Where can I learn more about this process of setting ask prices? How are these ask prices set, and who decides them? Can I propose a price myself?

  • I'm aware that people use coinbase pro to circumvent this issue. What are the key things I need to know to use this platform?

  • Ask prices are how much you ask for when you sell coins. Bid prices are how much you want to pay when you buy coins. There's nobody who sets them. If someone is selling 100 coins for $1 each, and you want to buy 120 coins, you'll need to buy (at least) 20 of them from someone else who has a different price. – user253751 Nov 16 '20 at 20:07

the latest price listed against the graph

That is almost certainly the last sale price

(If it's not, they are idiots.) All market price graphs show "the last price that happened."

For example, if the price is ...

Market instruments do not have a "price". eth has no "price". An Apple share has no "price". This is a very common misconception.

Consider the house you own. Does it have "a price"? No. You may guess what you can get for it. You may offer it at a certain figure. Someone may offer you something for it. You may sell it at auction. But is has no "price" - it is a market instrument.

Can I propose a price myself?

Precisely. Every single day when someone of millions of people sets an order to buy (or sell) a share of Apple at a certain price, that's the price of the bid or ask.

(Note that if you buy (or sell) at "market", it simply means "gives me the next bid or ask in line, I don't care exactly how much it is".)

It sounds like with "CoinbasePro" indeed that precisely allows you to make bid/asks. Enjoy!

  • With Coinbase, you don't really pay a spread but you pay a brokerage fee. Coinbase is a broker and they charge much higher fees than exchanges do. If you use Coinbase Pro, you pay a spread and an exchange fee, but the exchange fee is tiny and there is no broker. So Coinbase Pro not only lets you make offers that other people can accept, the fees are much lower than with a brokerage service like Coinbase. – David Schwartz Nov 17 '20 at 0:15

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