<p>This has been mentioned in other comments, but I thought it would be good to highlight it further: the answer to this question is exactly the same that for any other <a href="https://en.wikipedia.org/wiki/Commodity" rel="nofollow noreferrer">commodity</a>.</p>
<p>Commodity means an asset that is highly <a href="https://en.wikipedia.org/wiki/Fungibility" rel="nofollow noreferrer">fungible</a>, i.e., you can replace two items of that type for one another entirely or almost entirely. Examples of fungible assets besides bitcoins include dollars, stocks of a given company, gold bars, crude oil or rice. Examples of non-fungible assets include houses, works of art and, unsurprisingly NFTs.</p>
<p>And as other answers mentioned, commodities are traded in exchanges, which are basically systems for matching buy bids (each of which sets a maximum buy price) to sell offers (each of which sets a minimum sell price). Exchanges tend to be few and large since the more buyers and sellers in a given system, the faster you are likely to get your sale through.</p>
<p>In any such exchange system, all we can know is what buy/sell offers people have made, and then try to come up with a decent &quot;value&quot; from this continuous stream of bids using some algorithm. A broker might then use such algorithm to set their price for a given commodity so that less specialized/smaller buyers can buy more conveniently, but ultimately the broker will be selling commodities they bought with that ever evolving offer system.</p>
<p>Of course, if someone buys too high, or sells too low, they will lose money so the price tends to be metastable around a given value in the short term, until other external factors alter the value perception. But there can also be a tradeoff, as buying high and selling low also mean you will get the trade faster in case you need the money urgently for something else, or if you've learned before others of some information that implies that the asset value will fall dramatically in the near future. A good example of that can be seen in the movie <a href="https://en.wikipedia.org/wiki/Margin_Call" rel="nofollow noreferrer">Margin Call</a> about the 2007 financial crisis.</p>
<p>I think the only guarantee that traditional exchanges are not rigged by hiding/delaying information for someone's benefit is trust in their reputation and legal repercussions of doing so should they be caught. One thing that people who don't feel that this is enough could do is try to do create more decentralized systems, e.g. Ethereum based. The most notable one appears to be <a href="https://en.wikipedia.org/wiki/Uniswap" rel="nofollow noreferrer">Uniswap</a> (thanks to Boris in the comments). Wikipedia mentions that:</p>
<blockquote>
<p>Uniswap’s average daily trading volume was US$220 million in October 2020</p>
</blockquote>
<p>and their daily volumes are reported at: <a href="https://info.uniswap.org/#/" rel="nofollow noreferrer">https://info.uniswap.org/#/</a></p>

CC BY-SA 4.0
2021-12-13T03:21:32.390Z
useful information thanks, my question is way simpler though, I added a clarification at the end.
pee-yay-2021
CC BY-SA 4.0
2021-12-13T14:31:05.380Z
Well decentralised exchanges definitely exist on smart contract chains, e.g. Uniswap on Ethereum. They utilise a concept called AMMs (automated market makers) to dynamically set the price through a formula, and this can be publicly queried on-chain. However, by definition, they can only be used for assets on that chain (e.g. different tokens on Ethereum); this does include USD by proxy of stablecoins (e.g. DAI) but nothing off-chain, so can't be used for e.g. BTC price, hence probably not useful as an answer.
Boris
CC BY-SA 4.0
2021-12-13T14:32:09.690Z
@Boris thanks for the reference to Uniswap. Would you say such exchanges are widely used? Edit OK 220m month: https://en.wikipedia.org/wiki/Uniswap
Ciro Santilli OurBigBook.com
CC BY-SA 4.0
2021-12-13T14:36:24.413Z
@CiroSantilli新疆再教育营六四事件法轮功郝海东 Definitely; e.g. Uniswap had a $2bn trading volume in the last 24 hours: https://info.uniswap.org/#/ (edit: wikipedia lists last year's volume, the whole DeFi market has grown dramatically since).
In relative terms DeFi (decentralised finance, including decentralised exchanges as well as all kinds of other platforms for financial instruments like lending, options/futures, etc.) is much tinier than the traditional centralised market, but in absolute terms it's definitely quite big already.
Boris
CC BY-SA 4.0
2021-12-12T16:55:49.180Z
2021-12-13T14:38:00.430Z
2021-12-13T14:38:00.430Z
Ciro Santilli OurBigBook.com
<p>The price is the equilibrium between all buying and selling orders. People offer to buy or sell their Bitcoin with a positive or negative premium. When you consolidate all these prices (e.g. market information) you get the price that is currently displayed at coinmarketcap or an exchange of your choice.</p>

CC BY-SA 4.0
2021-12-11T08:53:31.113Z
I understand the reasons behind the price, I just want to understand what makes exchange claims trustworthy.
pee-yay-2021
CC BY-SA 4.0
2021-12-11T08:59:49.537Z
Although the effective price is the one that the buyer is willing to pay, I presume the price displayed by the exchanges has the greatest influence. and so far I understand it's based on third party claims.
pee-yay-2021
CC BY-SA 4.0
2021-12-11T16:51:10.300Z
@pee-yay-2021 Exchanges benefit when deals happen, and the price paid in the last deal is an excellent indicator of a price that the next buyer and seller will agree on as a price, so it benefits the exchange the publish accurate prices. Exchanges also benefit when buyers and sellers trust then enough to close deals on their exchange Since the history of sell prices is available, faking the current price is easily detectable.
Mark Stosberg
CC BY-SA 4.0
2021-12-11T05:49:55.403Z
2021-12-11T05:49:55.403Z
zerotobtc
<p>There is <em>no</em> &quot;the&quot; BTC price.</p>
<p>There are exchanges, where people offer to sell and buy BTC for USD and other currencies, at certain prices. Those exchanges generally report the last price at which some trade happened. Generally, prices will move in tandem across multiple exchanges, but there are always small deviations.</p>
<p>There are indexers which aggregate trade data from multiple exchanges, and compute weighted averages over them.</p>

CC BY-SA 4.0
2021-12-11T01:22:37.157Z
I see. is there an exhaustive list of those exchanges and maybe another list of those indexers ?, I presume there must be A LOT of them otherwise a few orgs get to decide the price isn't it? who gets to decide which reports are trustworthy?
pee-yay-2021
CC BY-SA 4.0
2021-12-11T01:30:50.130Z
fair, what I'm trying to understand is how are the majority not blindly accepting the price established by a few (but louder) "reporters"
pee-yay-2021
CC BY-SA 4.0
2021-12-11T09:49:33.547Z
I finally found that CoinMarketCap weigh exchange claims based on "confidence that the volume reported is legitimate" although it does not explain how to calculate "confidence". 

https://support.coinmarketcap.com/hc/en-us/articles/360052030111-Exchange-Ranking
pee-yay-2021
CC BY-SA 4.0
2021-12-11T10:18:55.737Z
@pee-yay-2021: For background into that: [wash-trading](https://www.investopedia.com/terms/w/washtrading.asp) and [spoofing](https://www.investopedia.com/tech/what-cryptocurrency-spoofing/).
Nat
CC BY-SA 4.0
2021-12-12T01:16:05.373Z
@Nat You indeed understand my questions (very few do), Thanks!.
pee-yay-2021
CC BY-SA 4.0
2021-12-12T21:00:43.577Z
@pee-yay-2021 the majority *are* taking the quoted price on trust, more or less; on the basis that most of the time the exchange will execute trades at that price. Except when it doesn't.
pjc50
CC BY-SA 4.0
2021-12-12T21:03:19.370Z
(prices are statements about the past; quoted orders are promises about the future. You *should* be able to buy an offer or sell into a bid. Don't forget that there are two prices, bid/offer)
pjc50
CC BY-SA 4.0
2021-12-12T22:38:18.793Z
@pjc50 I'd say there are many more prices; there is the "latest" price (price of last trade, a statement about the past), there is a bid and ask price (which are a statement about the orderbook/future), there are weighed prices of historical data, ...
Pieter Wuille
CC BY-SA 4.0
2021-12-31T23:37:27.597Z
then how did the price go from $64k to $8k?
Richard
CC BY-SA 4.0
2022-01-01T20:36:12.467Z
@Richard What are you talking about?
Pieter Wuille
CC BY-SA 4.0
2021-12-11T01:13:16.643Z
2021-12-11T01:13:16.643Z
Pieter Wuille
<p>If I want to know the price of bitcoin, I can go to coinmarketcap, but where do they take it from? Where does the coinmarketcap provider get it from, and what is the ultimate source of this value?</p>
<p>Everyone seems to agree upon roughly the same BTC to USD rate. an ignorant like me can naively think it's taken from a centralized database</p>
<p>Clarification: This is a technical question, coinmarketcap.com is ultimately a web page and regardless of the rules that govern the price, I'm trying to understand if there are some technical people able to edit a number in some databases affecting everyone's perception. &quot;tamper with the price by selling/buying&quot; is a way of playing by the rules imho, not the kind of answer I'm looking for.</p>
<p>Follow up question: What if an exchange reports false information?</p>

CC BY-SA 4.0
2021-12-11T12:30:41.707Z
"everyone seems to agree in roughly the same BTC to USD rate" – That's just how capitalism works. If they *didn't* agree, then you could make money by buying BTC for cheap at one exchange and selling it high at another exchange. This, in turn, will increase demand and reduce supply at the "cheap" exchange, thus increasing the price, and increase supply and reduce demand at the "expensive" exchange, thus decreasing the price, until the two prices meet. Note that this is no different from how money exchanges have worked for hundreds of years.
Jörg W Mittag
CC BY-SA 4.0
2021-12-11T14:30:38.773Z
@JörgWMittag - Actually you can arbitrage bitcoin from one exchange to another. The current price BTC price on Binance is almost 12 dollars lower than the price on Coinbase. If I had the wherewithal and two accounts, I could buy on one, transfer to the other and then sell it.
Valorum
CC BY-SA 4.0
2021-12-12T01:11:38.540Z
@Jörg W Mittag
That is not my point, regardless of the rules that govern the price, coinmamrketcap is a web page with a huge influence on price perception, I'm asking where this value ultimately take it from. (from a technical standpoint maybe). I want to be aware if it is technically possible for a few players to easily tamper with the price.
pee-yay-2021
CC BY-SA 4.0
2021-12-12T13:29:57.497Z
@pee-yay-2021 Yes, even a single player can tamper with the price - that's what buying or selling bitcoin does.  The more you buy or sell the more you affect the price - same as any other commodity.  This is really an economics 101 question.
J...
CC BY-SA 4.0
2021-12-12T18:42:36.090Z
Possible duplicate of https://bitcoin.stackexchange.com/q/2566/5406, https://bitcoin.stackexchange.com/q/55219/5406, https://bitcoin.stackexchange.com/q/20383/5406
Murch
CC BY-SA 4.0
2021-12-13T06:03:45.040Z
@J... first of all that is not the question, secondly, 101 questions are not prohibited.
pee-yay-2021
CC BY-SA 4.0
2021-12-13T15:16:54.770Z
If you want to know how a privately owned company produces a datapoint that it publishes, you'll have to ask them. We don't have insight into the operations of private companies, and they don't seem to offer a detailed explanation in their FAQ.
Murch
<exchange-rate>
Where is the BTC price "stored"?
pee-yay-2021
# Where is the BTC price "stored"?

(Asked by: username_0 on 2021-12-11)

If I want to know the price of bitcoin, I can go to coinmarketcap, but where do they take it from? Where does the coinmarketcap provider get it from, and what is the ultimate source of this value?

Everyone seems to agree upon roughly the same BTC to USD rate. an ignorant like me can naively think it's taken from a centralized database

Clarification: This is a technical question, coinmarketcap.com is ultimately a web page and regardless of the rules that govern the price, I'm trying to understand if there are some technical people able to edit a number in some databases affecting everyone's perception. "tamper with the price by selling/buying" is a way of playing by the rules imho, not the kind of answer I'm looking for.

Follow up question: What if an exchange reports false information?

**Tags:** exchange-rate

> **Comments:**
> **username_1**: "everyone seems to agree in roughly the same BTC to USD rate" – That's just how capitalism works. If they *didn't* agree, then you could make money by buying BTC for cheap at one exchange and selling it high at another exchange. This, in turn, will increase demand and reduce supply at the "cheap" exchange, thus increasing the price, and increase supply and reduce demand at the "expensive" exchange, thus decreasing the price, until the two prices meet. Note that this is no different from how money exchanges have worked for hundreds of years.  
> **username_2**: @username_1 - Actually you can arbitrage bitcoin from one exchange to another. The current price BTC price on Binance is almost 12 dollars lower than the price on Coinbase. If I had the wherewithal and two accounts, I could buy on one, transfer to the other and then sell it.  
> **username_0**: @username_1 That is not my point, regardless of the rules that govern the price, coinmamrketcap is a web page with a huge influence on price perception, I'm asking where this value ultimately take it from. (from a technical standpoint maybe). I want to be aware if it is technically possible for a few players to easily tamper with the price.  
> **username_3**: @username_0 Yes, even a single player can tamper with the price - that's what buying or selling bitcoin does.  The more you buy or sell the more you affect the price - same as any other commodity.  This is really an economics 101 question.  
> **username_4**: Possible duplicate of https://bitcoin.stackexchange.com/q/2566/5406, https://bitcoin.stackexchange.com/q/55219/5406, https://bitcoin.stackexchange.com/q/20383/5406  
> **username_0**: @J... first of all that is not the question, secondly, 101 questions are not prohibited.  
> **username_4**: If you want to know how a privately owned company produces a datapoint that it publishes, you'll have to ask them. We don't have insight into the operations of private companies, and they don't seem to offer a detailed explanation in their FAQ.  

---

## 3 answers

### Answer by username_9 on 2021-12-11. Score: 17 | Accepted answer

There is *no* "the" BTC price.

There are exchanges, where people offer to sell and buy BTC for USD and other currencies, at certain prices. Those exchanges generally report the last price at which some trade happened. Generally, prices will move in tandem across multiple exchanges, but there are always small deviations.

There are indexers which aggregate trade data from multiple exchanges, and compute weighted averages over them.

> **Comments:**
> **username_0**: I see. is there an exhaustive list of those exchanges and maybe another list of those indexers ?, I presume there must be A LOT of them otherwise a few orgs get to decide the price isn't it? who gets to decide which reports are trustworthy?  
> **username_0**: fair, what I'm trying to understand is how are the majority not blindly accepting the price established by a few (but louder) "reporters"  
> **username_0**: I finally found that CoinMarketCap weigh exchange claims based on "confidence that the volume reported is legitimate" although it does not explain how to calculate "confidence".   https://support.coinmarketcap.com/hc/en-us/articles/360052030111-Exchange-Ranking  
> **username_10**: @username_0: For background into that: [wash-trading](https://www.investopedia.com/terms/w/washtrading.asp) and [spoofing](https://www.investopedia.com/tech/what-cryptocurrency-spoofing/).  
> **username_0**: @username_10 You indeed understand my questions (very few do), Thanks!.  
> **username_11**: @username_0 the majority *are* taking the quoted price on trust, more or less; on the basis that most of the time the exchange will execute trades at that price. Except when it doesn't.  
> **username_11**: (prices are statements about the past; quoted orders are promises about the future. You *should* be able to buy an offer or sell into a bid. Don't forget that there are two prices, bid/offer)  
> **username_9**: @username_11 I'd say there are many more prices; there is the "latest" price (price of last trade, a statement about the past), there is a bid and ask price (which are a statement about the orderbook/future), there are weighed prices of historical data, ...  
> **username_12**: then how did the price go from $64k to $8k?  
> **username_9**: @username_12 What are you talking about?  

---

### Answer by username_5 on 2021-12-12. Score: 2

This has been mentioned in other comments, but I thought it would be good to highlight it further: the answer to this question is exactly the same that for any other [commodity](https://en.wikipedia.org/wiki/Commodity).

Commodity means an asset that is highly [fungible](https://en.wikipedia.org/wiki/Fungibility), i.e., you can replace two items of that type for one another entirely or almost entirely. Examples of fungible assets besides bitcoins include dollars, stocks of a given company, gold bars, crude oil or rice. Examples of non-fungible assets include houses, works of art and, unsurprisingly NFTs.

And as other answers mentioned, commodities are traded in exchanges, which are basically systems for matching buy bids (each of which sets a maximum buy price) to sell offers (each of which sets a minimum sell price). Exchanges tend to be few and large since the more buyers and sellers in a given system, the faster you are likely to get your sale through.

In any such exchange system, all we can know is what buy/sell offers people have made, and then try to come up with a decent "value" from this continuous stream of bids using some algorithm. A broker might then use such algorithm to set their price for a given commodity so that less specialized/smaller buyers can buy more conveniently, but ultimately the broker will be selling commodities they bought with that ever evolving offer system.

Of course, if someone buys too high, or sells too low, they will lose money so the price tends to be metastable around a given value in the short term, until other external factors alter the value perception. But there can also be a tradeoff, as buying high and selling low also mean you will get the trade faster in case you need the money urgently for something else, or if you've learned before others of some information that implies that the asset value will fall dramatically in the near future. A good example of that can be seen in the movie [Margin Call](https://en.wikipedia.org/wiki/Margin_Call) about the 2007 financial crisis.

I think the only guarantee that traditional exchanges are not rigged by hiding/delaying information for someone's benefit is trust in their reputation and legal repercussions of doing so should they be caught. One thing that people who don't feel that this is enough could do is try to do create more decentralized systems, e.g. Ethereum based. The most notable one appears to be [Uniswap](https://en.wikipedia.org/wiki/Uniswap) (thanks to username_6 in the comments). Wikipedia mentions that:

> Uniswap’s average daily trading volume was US$220 million in October 2020

and their daily volumes are reported at: <https://info.uniswap.org/#/>

> **Comments:**
> **username_0**: useful information thanks, my question is way simpler though, I added a clarification at the end.  
> **username_6**: Well decentralised exchanges definitely exist on smart contract chains, e.g. Uniswap on Ethereum. They utilise a concept called AMMs (automated market makers) to dynamically set the price through a formula, and this can be publicly queried on-chain. However, by definition, they can only be used for assets on that chain (e.g. different tokens on Ethereum); this does include USD by proxy of stablecoins (e.g. DAI) but nothing off-chain, so can't be used for e.g. BTC price, hence probably not useful as an answer.  
> **username_5**: @username_6 thanks for the reference to Uniswap. Would you say such exchanges are widely used? Edit OK 220m month: https://en.wikipedia.org/wiki/Uniswap  
> **username_6**: @CiroSantilli新疆再教育营六四事件法轮功郝海东 Definitely; e.g. Uniswap had a $2bn trading volume in the last 24 hours: https://info.uniswap.org/#/ (edit: wikipedia lists last year's volume, the whole DeFi market has grown dramatically since). In relative terms DeFi (decentralised finance, including decentralised exchanges as well as all kinds of other platforms for financial instruments like lending, options/futures, etc.) is much tinier than the traditional centralised market, but in absolute terms it's definitely quite big already.  

---

### Answer by username_7 on 2021-12-11. Score: 2

The price is the equilibrium between all buying and selling orders. People offer to buy or sell their Bitcoin with a positive or negative premium. When you consolidate all these prices (e.g. market information) you get the price that is currently displayed at coinmarketcap or an exchange of your choice.

> **Comments:**
> **username_0**: I understand the reasons behind the price, I just want to understand what makes exchange claims trustworthy.  
> **username_0**: Although the effective price is the one that the buyer is willing to pay, I presume the price displayed by the exchanges has the greatest influence. and so far I understand it's based on third party claims.  
> **username_8**: @username_0 Exchanges benefit when deals happen, and the price paid in the last deal is an excellent indicator of a price that the next buyer and seller will agree on as a price, so it benefits the exchange the publish accurate prices. Exchanges also benefit when buyers and sellers trust then enough to close deals on their exchange Since the history of sell prices is available, faking the current price is easily detectable.  

---

