In his 2008 letter to Berkshire Hathaway’s shareholders, Warren Buffett recalled a lesson from his mentor, investor Benjamin Graham: “Price is what you pay; value is what you get.”
Graham’s observation was coined in the mid-20th century, but it’s an insight that crypto investors would be wise to remember. Right now, the global price of bitcoin is around $8,700. On individual exchanges, though, the cryptocurrency can trade for more than $1,000 above or below that price. Wherever you decide to buy, you’re getting the same digital currency: the only difference is how much it will cost you.
Although you’ll frequently read stories about bitcoin’s price rising and falling, the reality is more nuanced than that. The global bitcoin price is a weighted average, compiled and calculated across a wide range of exchanges. It reflects whether the cryptocurrency’s price is generally going up or down, but it doesn’t tell you how much bitcoin costs on a specific exchange, at a specific time. Granular data matter, because those are the prices that you’ll see (and pay) when you visit an exchange.