What is the Bitcoin Price?

In a previous post I talked about the Bitcoin charts website where it is possible to get price information for specific platforms. The Bitcoin is an interesting phenomenon as it is a new specific digital currency. The past year the price of the Bitcoin has gone remarkably up and down according to newspaper reports but which price are journalists usually talking about? Some articles use the website of the Japanese company MtGox Co.Ltd. as it is one of the older platforms where Bitcoins are used/traded a often. When the exchange rate of the Bitcoin reached the 1000 US Dollar mark this was the platform the journalists were referring to.

There are, however, several platforms on which Bitcoins are traded or exchanged and also at different rates. The actual prices or exchange rates are therefore not straitforward in my view. CoinDesk has launched a proprietary price index in September 2013 that is currently based on a combination of sources to establish an average price. The exchange rate sources that are included in the formula to calculate the price need to conform to the following criteria: (a) The exchange must serve an international customer base (b) The minimum trade size must be less than 1,500 USD or equivalent (c) Banking transfers in or out of the exchange must be completed within seven days without special fees.

The Bitcoin Price Index in my view looks to be a better source to find out what an accurate average price is. More background information is available on the CoinDesk website.

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