What Determines Bid-Ask Spread?

As a primer, read more about the spread.

Every cryptocurrency exchange will always charge a spread to generate revenue. This could be on top of deposit and withdrawal fees. Some also include trading commissions and, in some cases, hidden charges.

Customer-facing and modern crypto trading platforms like CryptoAltum don't charge commissions, and there are no hidden fees. All fees are transparent. The good news is that CryptoAltum also maintains industry-low spreads. All this bodes well with traders and is positive for those scalpers and day-traders.

The question a trader might want to know is what determines spread? A sensitive topic, the spread is a factor of many things: one, the type of pair traded. Admittedly, different crypto pairs vary in liquidity, and this also affects spread rates. Pairs like BTC/USDT always have ultra-low spreads. It is traded by most traders, commanding relatively high daily trading volumes.

At the same time, crypto volatility can have an impact on the spread. The calmer the market, the lower the spread—and this is something a trader should watch out for. During high periods of volatility, a broker might hike spreads, especially in floating type arrangements.

It should be noted that in some cases, high spreads might cause a margin call, more so during periods of high volatility. The only way of protection is to timely manage leverage levels.