Bid Price Meaning

What is Bid Price in Crypto?

When it comes to buying and selling, buyers want to nab a deal at rock-bottom prices while sellers dream of making a killing by selling high. To seal the deal, the buyer and seller must come to terms on a price that works for both parties.

Bid price is the highest price that a buyer is willing to pay for a particular asset, such as a stock, bond, or commodity, at a given moment. In the content of crypto, it represents the maximum price that someone is willing to pay to buy a specific cryptocurrency.

It is usually displayed in cryptocurrency exchanges as part of the order book. The order book shows the current bids and asks, is the lowest price at which a seller is willing to sell a particular digital asset at a given moment. A collection of bid prices, which represent the offers made by buyers, and asking prices, which reflect the offers made by sellers, comprise a trading order book.

The bid price is usually lower than the ask price, which is the lowest price at which a seller is willing to sell a cryptocurrency. To sell their assets, traders and investors can either choose one of the existing bid prices available on the order book, or set an asking price and wait for a buyer to place a bid that matches or exceeds that price, which will then fulfill the order.

The gap between the bid and ask prices is known as the bid-ask spread. You can calculate the bid-ask spread by subtracting the highest bid price from the lowest selling price.