Bid, ask and spread: the cost built into every crypto trade

By the Blockhorizon Editorial Team · Updated 2 October 2026 · How we check facts

Every price screen hides two prices, not one. This lesson explains the bid, the ask and the spread using the definitions published by US regulators, then shows — with simple, illustrative arithmetic — how much the spread takes from a trade before any other fee is added.

What do “bid” and “ask” mean?

The US Securities and Exchange Commission’s investor site, Investor.gov, defines the two prices like this:

• Bid: “The highest price a buyer will pay to buy a specified number of shares of a stock at any given time.”
• Ask: “The lowest price at which a seller will sell the stock.” The ask is also called the offer.

These definitions were written for shares, but the idea carries over to crypto. If you want to buy a coin right now, you have to meet the lowest price a seller is asking. If you want to sell right now, you have to accept the highest price a buyer is bidding.

Depending on the platform, you may see these two prices in an order book, or simply as a separate “buy” price and “sell” price for the same coin. Either way, the buy price you are shown is normally higher than the sell price shown at the same moment.

What is the spread?

Investor.gov defines the spread as “The difference between the bid price and the ask price.” The SEC adds that the ask price “will almost always be higher than the bid price”.

On a stock market, the SEC explains, market makers — firms that stand ready to buy and sell — earn their profit from this difference. Whoever is on the other side of your crypto trade, the effect for you is the same: you buy at the higher price and sell at the lower one, so the spread is a cost you carry from the moment you open a position.

The spread is not a fixed number. Because the bid and ask are prices “at any given time”, the gap can widen or narrow from one moment to the next.

How do you calculate the spread?

Three simple formulas cover most situations:

• Spread = ask − bid
• Mid-price = (ask + bid) ÷ 2
• Spread as a % = (ask − bid) ÷ mid-price × 100

Illustrative example (the prices are made up for the arithmetic, not real quotes): a platform shows Bitcoin (BTC) with a bid of $60,000 and an ask of $60,300.

• Spread = 60,300 − 60,000 = $300
• Mid-price = (60,300 + 60,000) ÷ 2 = $60,150
• Spread as a % = 300 ÷ 60,150 × 100 ≈ 0.50%

Expressing the spread as a percentage lets you compare it across coins with very different prices.

How much does the spread cost you on a round trip?

A round trip means buying and then selling. Using the same illustrative prices:

1. You spend $1,000 buying at the ask: 1,000 ÷ 60,300 = 0.016584 BTC.
2. If you sold straight away at the bid: 0.016584 × 60,000 = $995.02.
3. Cost of the round trip from the spread alone: 1,000 − 995.02 = $4.98, about 0.5%.

Put the other way round: before you are back to $1,000, the bid has to rise from $60,000 to $60,300 — a 0.5% move — and that is before any trading fee.

Now imagine a wider spread, again illustrative: bid $59,400 and ask $60,600, a 2% spread. The same $1,000 buys 0.016502 BTC, which would sell immediately for $980.20 — a cost of $19.80. The bid would need to rise about 2.02% just to break even.

Our crypto profit calculator lets you add costs like these to your own figures.

Why can a “zero-fee” trade still cost you money?

Because the spread is a cost even when nobody calls it a fee. In a November 2022 complaint bulletin, the US Consumer Financial Protection Bureau (CFPB) reported that it had received more than 8,300 virtual currency complaints between October 2018 and September 2022. Among them, it wrote, “Some consumers complained about undisclosed or unexpected costs on crypto-asset platforms, or claims there were no fees when, in reality, the consumer noticed a large cost in the form of a large spread.”

So when a platform advertises “no fees” or “free” conversions, the useful question is: what are the buy and sell prices right now, and how far apart are they? Our guide to crypto trading fees covers the other charges that can sit on top of the spread.

Does the spread matter more if you trade often?

Yes. You pay the spread on every round trip, so frequent trading multiplies it. FINRA, the US broker-dealer regulator, requires firms to warn customers that day trading generates substantial commissions even when the cost of each trade is low — and the same logic applies to spreads. Australia’s securities regulator ASIC puts it simply on its Moneysmart site: “Fees and costs can add up.”

Illustrative arithmetic: if each round trip cost you 1% of your balance in spread and fees, then after 20 round trips $1,000 would shrink to 1,000 × 0.99²⁰ = $817.91 — even if the price itself never moved.

How can you check the spread before you trade?

• Look at the buy price and the sell price for the same coin at the same moment, and work out the gap as a percentage using the formula above.
• Check again just before you confirm. The spread can change, and the price on a confirmation screen may differ from the one you first saw.
• Read the platform’s fee schedule as well. FINRA’s advice for any account is to “Review and understand all costs associated with opening and maintaining an account, as well as trading and other fees.”
• Remember how different order types behave: a market order fills at whatever price is available, while a limit order sets the worst price you will accept.

What are the risks to keep in mind?

• The price you see is not guaranteed. Investor.gov warns that the price at which a market order is executed “is not guaranteed”.
• Busy markets. The CFPB said consumer complaints suggest that “many consumers have trouble executing transactions, especially during times of increasing crypto-asset prices”.
• Volatility on top of costs. The UK Financial Conduct Authority (FCA) says crypto-assets “are all high risk and speculative as an investment”, and that if you invest you “should be prepared to lose all your money”. See crypto volatility explained.

Blockhorizon is an education site. Nothing here recommends buying, selling or holding any crypto-asset, or using any particular platform.