What is a Spread?
The spread is the difference between the bid price (the price at which you can sell) and the ask price (the price at which you can buy) of a financial instrument. It represents the primary cost of trading and is how brokers and market makers earn revenue on each transaction.
For example, if BTC/USD has a bid price of $60,000 and an ask price of $60,018, the spread is $18. This means that when you open a position, you start with a small unrealised loss equal to the spread — your trade needs to move in your favour by at least the spread amount before you break even.
In cryptocurrency markets, spreads are typically wider than in major forex pairs due to the unique characteristics of crypto markets: higher volatility, fragmented liquidity across multiple exchanges, and fewer institutional market makers compared to the traditional foreign exchange market.
Understanding how spreads work, why they vary, and when they are tightest is essential for minimising your trading costs and maximising the profitability of your crypto trading strategy.
Spread Quick Facts
- What It IsBid - Ask price difference
- Who Pays ItAll traders, on every trade
- When ChargedAt position open
- Crypto vs ForexCrypto spreads 5-10x wider
- Tightest HoursUS-EU overlap (14:00-17:00 GMT)
- Widest HoursWeekends & overnight
Why Crypto Spreads are Wider Than Forex
If you are accustomed to trading forex where EUR/USD spreads can be as low as 0.0 pips, crypto spreads may seem expensive. Here is why the difference exists and why it is justified.
Lower Overall Liquidity
The entire crypto market has roughly $100-200 billion in daily trading volume, compared to $7.5 trillion for forex. Less liquidity means wider spreads because market makers need a larger buffer to manage risk.
Higher Volatility
Bitcoin's average daily range is 3-5%, compared to 0.5-1% for EUR/USD. Market makers widen spreads to compensate for the higher risk of adverse price movement while they hold inventory between trades.
Fragmented Liquidity
Forex liquidity is concentrated on a few major interbank platforms. Crypto liquidity is spread across 50+ exchanges globally, making it harder (and more expensive) for CFD providers to aggregate pricing efficiently.
Fewer Market Makers
The forex market has been served by institutional market makers for decades. Crypto market making is a newer industry with fewer participants, meaning less competition to drive spreads lower.
Settlement Risk
Crypto exchange counterparty risk (as demonstrated by FTX's collapse) creates additional costs for liquidity providers who must manage their exposure across multiple potentially unreliable venues.
Regulatory Uncertainty
The evolving regulatory landscape adds operational costs and risk premiums for market makers and brokers offering crypto products, costs that are partially reflected in wider spreads.
Perspective Matters
While crypto spreads are wider than forex in absolute terms, they are actually quite competitive when expressed as a percentage of the instrument price. An $18 spread on a $60,000 Bitcoin is just 0.03% — comparable to institutional equity trading costs. The high dollar value of the spread is a function of the high dollar price of the underlying asset, not necessarily poor pricing.
Factors Affecting Crypto Spreads
Crypto spreads are variable and fluctuate throughout the day based on multiple factors. Understanding these factors helps you time your trades for the best possible execution.
Market Liquidity
Impact: HighLiquidity is the single most important factor determining spread width. Bitcoin and Ethereum, as the two most liquid cryptocurrencies, consistently offer the tightest spreads. Smaller altcoins with lower trading volumes inherently have wider spreads because there are fewer buyers and sellers at each price level, making it harder for market makers to match orders efficiently.
Volatility
Impact: HighDuring periods of elevated volatility (price swings, liquidation cascades, or major news events), spreads widen significantly. This is because market makers increase the bid-ask gap to compensate for the increased risk of holding inventory in a rapidly moving market. Spread widening during crypto crashes can be dramatic — BTC/USD spreads can double or triple during flash crashes.
Time of Day
Impact: MediumCrypto markets trade 24/7, but liquidity is not evenly distributed throughout the day. During US and European business hours (13:00-22:00 GMT), when institutional traders and major exchanges are most active, spreads tend to be tightest. During the Asian session overnight, spreads may widen by 20-50% for most pairs.
Market Maker Competition
Impact: MediumQuantaraEX aggregates pricing from multiple liquidity providers and market makers. Higher competition among these providers results in tighter spreads as each provider tries to offer the most competitive bid and ask prices. This multi-provider model consistently delivers better pricing than relying on a single source.
Exchange Fragmentation
Impact: MediumUnlike forex (where most liquidity flows through a handful of interbank platforms), crypto liquidity is fragmented across dozens of exchanges globally — Binance, Coinbase, Kraken, OKX, Bybit, and more. This fragmentation can create temporary price discrepancies and affects the efficiency with which CFD providers can hedge, indirectly impacting spread costs.
Weekend & Holiday Trading
Impact: Medium-HighWhile crypto trades 24/7, including weekends and holidays, liquidity drops significantly during these periods. Weekend spreads can be 50-100% wider than weekday spreads because many institutional participants and market makers reduce their activity. Major holidays (Christmas, New Year, Chinese New Year) can further reduce liquidity.
QuantaraEX Crypto Spread Table
Typical spreads for major cryptocurrency pairs on QuantaraEX under different market conditions.
| Pair | Typical Spread | Peak Hours (Tight) | Off-Peak (Wide) |
|---|---|---|---|
| BTC/USD | 15-25 | 12-18 | 30-60 |
| ETH/USD | 1.5-3.0 | 1.2-2.0 | 4.0-8.0 |
| XRP/USD | 0.003-0.005 | 0.002-0.003 | 0.008-0.015 |
| SOL/USD | 0.15-0.30 | 0.10-0.20 | 0.40-0.80 |
| DOGE/USD | 0.001-0.002 | 0.0008-0.001 | 0.003-0.006 |
| ADA/USD | 0.004-0.006 | 0.003-0.004 | 0.008-0.015 |
| DOT/USD | 0.04-0.06 | 0.03-0.04 | 0.08-0.15 |
| AVAX/USD | 0.08-0.12 | 0.06-0.08 | 0.15-0.30 |
* Spreads are variable and shown in USD for USD-denominated pairs. Actual spreads may vary based on market conditions, liquidity, and volatility.
Crypto vs Other Asset Classes
How crypto trading costs compare to forex, commodities, and indices when expressed as a percentage of the instrument price.
| Instrument | Typical Spread | Cost as % of Price |
|---|---|---|
| EUR/USD | 0.6 pips | ~0.005% |
| GBP/USD | 0.9 pips | ~0.007% |
| BTC/USD | $18 | ~0.03% |
| ETH/USD | $2.0 | ~0.06% |
| XAU/USD | $0.25 | ~0.01% |
| US500 | 0.4 pts | ~0.008% |
QuantaraEX Spread Advantages
QuantaraEX is engineered to deliver the most competitive crypto spreads possible through technology, liquidity aggregation, and transparent pricing.
Multi-Source Liquidity Aggregation
QuantaraEX aggregates pricing from multiple tier-1 liquidity providers and major cryptocurrency exchanges. Our smart order routing technology selects the best available bid and ask prices across all sources, ensuring you consistently receive tight spreads regardless of market conditions.
No Hidden Markups
What you see is what you get. QuantaraEX applies a transparent, fixed markup to the raw spread from liquidity providers. There are no hidden commissions, no variable markups during volatile periods, and no artificial spread widening during news events beyond what the underlying market dictates.
Real-Time Spread Monitoring
The QuantaraEX platform displays real-time bid and ask prices along with the current spread for every instrument. You can see exactly what your trading cost will be before you open a position, allowing you to time entries for optimal pricing.
Competitive Pricing on Majors
BTC/USD and ETH/USD are our most competitive crypto offerings, with typical spreads that consistently rank among the tightest in the industry. For active traders who focus on major crypto pairs, the cost savings over time are significant.
No Commissions on Standard Accounts
Standard accounts at QuantaraEX include all trading costs within the spread — there are no additional per-trade commissions. This simplifies cost calculation and makes it easy to understand your exact breakeven point on every trade.
ECN Pricing Available
For high-volume traders, QuantaraEX ECN accounts offer raw spreads with a small per-lot commission. This pricing model delivers the tightest possible spreads for traders who prefer to see the true market price and pay a separate, transparent commission.
Best Times for Tight Crypto Spreads
Timing your trades to coincide with peak liquidity periods can significantly reduce your trading costs. Here is when to expect the best and worst crypto spreads.
US Market Hours
14:00 - 21:00 GMTPeak institutional activity. US-based exchanges (Coinbase, Kraken) contribute maximum liquidity. Overlap with European afternoon creates the deepest order books.
Spreads: Tightest spreads of the day
European Morning
08:00 - 14:00 GMTEuropean institutional desks are active. Good liquidity on both European and Asian exchanges. Strong overlap with late Asian session provides solid depth.
Spreads: Near-best spreads
US-Europe Overlap
14:00 - 17:00 GMTBoth US and European markets are fully active simultaneously. This 3-hour window typically offers the tightest crypto spreads, highest volume, and best execution quality of any period.
Spreads: Tightest possible spreads
Asian Session
00:00 - 08:00 GMTAsian exchanges (Binance, OKX, Bybit) provide liquidity. Slightly wider spreads than US/EU hours but still acceptable for most trading strategies.
Spreads: Moderately wider
Late US / Pre-Asia
21:00 - 00:00 GMTTransitional period as US activity winds down and Asian markets are not yet fully active. Reduced liquidity leads to wider spreads.
Spreads: Wider than average
Weekends
Saturday & SundayMost institutional participants and market makers are inactive. Retail-dominated flow with thin order books. Major price moves can happen on minimal volume.
Spreads: 50-100% wider than weekdays
Tips to Minimise Spread Costs
Practical strategies to reduce the impact of spreads on your trading performance.
Trade During Peak Hours
Focus your crypto trading activity during the US-European overlap (14:00-17:00 GMT) when spreads are tightest. Avoid placing large orders during weekend low-liquidity periods unless the opportunity justifies the wider spread cost.
Stick to Major Pairs
BTC/USD and ETH/USD consistently offer the tightest crypto spreads. The more exotic the cryptocurrency, the wider the spread. Unless you have a strong conviction on an altcoin trade, the cost savings on majors are significant over many trades.
Use Limit Orders
Instead of market orders that execute at the current ask/bid (paying the full spread), use limit orders to specify your entry price. This can sometimes achieve a fill within the spread, reducing your effective trading cost.
Avoid Trading During News Events
Spreads spike dramatically during major crypto-specific events (exchange outages, regulatory announcements, major hack reports). Unless you are specifically trading the news event, wait for spreads to normalise before entering positions.
Consider Position Timeframe
Spreads matter most for short-term traders. A $18 spread on BTC/USD is significant for a scalper targeting $50 moves, but barely relevant for a swing trader targeting $2,000 moves. Match your spread sensitivity to your trade duration.
Monitor Spread in Real-Time
The QuantaraEX platform shows live spreads for all instruments. Make it a habit to check the current spread before opening any position, especially during non-standard hours or volatile conditions.
Experience Competitive Crypto Spreads
Open a free QuantaraEX account and trade crypto with tight spreads, multi-source liquidity aggregation, and transparent pricing.