To learn more about how orders are executed on Bitso Alpha, click here.
In order to understand how buying and selling take place, it is important to know that Bitso is a platform in which people who buy and sell exchange cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC) among others, as well as fiat currencies, through a ledger where all ask and bid offers are recorded.
Bitso does not directly buy or sell digital assets.
In order to understand the difference between limit orders and market orders, it’s important to know where to buy/sell at Bitso:
- In order to buy/sell cryptocurrencies in your Bitso platform, go to MORE PRODUCTS and select Alpha Classic:
It is important to pay attention to which market you are selecting, that is to say, which crypto you want to buy/sell, and select the correct market as indicated in the following image:
Now that you know where to buy/sell at Bitso, let’s go over the difference between a market order and a limit order:
A market order is an order to buy or sell executed at market price, a way to quickly buy/sell an asset. In a quick buy/sell, the requests at the top of the queue in the ledger are executed first, so you don’t have to wait for someone to accept your ask/bid to obtain fiat currencies or crypto, since the best market price is considered.
It is important to mention that during the quick buy/sell, requests will be executed taking different prices in the ledger, until the amount to be bought/sold is met.
For example, if you’d like to buy 1 bitcoin through a quick buy/sell, according to the ledger shown below (ask), you’d be buying 0.04111261 BTC (bitcoin) from the first seller (another Bitso user) and 0.05123918 BTC from the second seller (another Bitso user). You would also buy the remaining amount from the third seller (ask), so:
0.04111261 + 0.05123918 = 0.09235179 (to get to 1 BTC what is missing is 1 - 0.09235179 = 0.90764821)
It is also possible to buy/sell at market price through the option “Convert” in your wallet. You can find more info about conversions here.
On the other hand, when you purchase through a limit order, you place your ask/bid offer in the ledger with a price set by you, and it will only be executed at that price. This could be immediate, but it could also take some time for the bid/ask price you set to be accepted by another user.
For example, let's suppose you want to buy 1 BTC (bitcoin) for 115.000,00 BRL. This is just hypothetical since according to the table above, someone is selling it for 122.899,99 BRL. We could use the latter amount, but we’ll use a round number for practicality.
If you input 1 BTC as the amount you want to buy, 115.000,00 as the price and then click “buy”, you will be generating a buy order, which could follow two courses:
- It will be placed in the bid queue of the ledger until someone on the ask section of the same ledger “matches” your offer, and the BTC will be bought.
- If this doesn’t happen, the order will stay there indefinitely or until you cancel it manually by clicking on the X in the list of active limit orders.
It is worth mentioning that your offer may be “automatically” accepted if there’s any Bitso user that has placed a matching ask price. Once this happens, you will see 1 BTC in your balance.