What is the spread when buying bitcoin?
Correct answer
Answer B: The gap between buy and sell prices.
Quick explanation
The spread is the difference between the buying price and the selling price. A large spread can make a purchase more expensive even when the stated fee is low.
Detailed explanation
A reference rate is a comparison value, not automatically the price at which a particular purchase executes. Different venues can show different prices simultaneously. The buying price may be above a midpoint or reference rate while the selling price is below it. The difference between buying and selling prices is called the spread.
A provider may include the spread in the displayed price and charge an additional trading or service fee. Payment method, currency conversion or withdrawal to one's own wallet may create further costs. Zero trading fees therefore does not automatically mean a cost-free purchase.
The execution price is the rate actually used for a purchase or sale. Market orders, rapid price moves or low liquidity can make it differ from the initially displayed rate. Larger orders may execute at several price levels; this deviation is often called slippage. An instant purchase may display a fixed final price valid for a short period.
Cost comparisons depend on how many satoshis are actually credited after spread and all fees. On a later sale, what matters is how much fiat money is paid out after execution price and fees. Prices and costs change. A cheap offer also does not automatically prove a provider is safe, solvent or legally suitable.
Example or everyday application
A simplified reference rate is 50,000 euros per bitcoin. Provider A quotes a buying rate of 50,500 with no separate trading fee. Provider B quotes 50,100 plus a trading fee. Only the satoshis actually received after all costs show which offer is effectively cheaper. These are not current market prices.
Common misconception
Misconception: no trading fee automatically means a free purchase. Correction: costs may be included in the spread, execution price, payment method or later withdrawal fee.