The bid-ask spread is the gap between the highest price a buyer will pay and the lowest price a seller will accept. It is the first cost of any trade, charged before any exchange fee, and it is the cleanest single indicator of how liquid a market is. On deep Bitcoin markets the gap runs a fraction of a basis point. On small-cap tokens it can exceed several percent.
The two sides
Bid is the buy side. At the top of that queue sits the highest bid, because whoever offers most gets filled first.
Ask, sometimes called the offer, is the sell side. At its top sits the lowest ask, for the mirror reason.
Between them sits the spread. Nothing trades there. Not a single unit.
A simplified book for a token quoted around $100:
| Side | Price | Size |
|---|---|---|
| Ask | $100.04 | 1,800 |
| Ask | $100.02 | 900 |
| Spread: $0.03 | ||
| Bid | $99.99 | 1,100 |
| Bid | $99.97 | 2,400 |
Buy at market, and you pay $100.02. Sell at market, and you receive $99.99. Do both instantly, and you are down three cents per unit having made no directional call at all.
Why the spread exists
Market makers put it there. They are running a business rather than providing a courtesy, and that single fact explains most of what the spread does under different conditions. Nobody is doing you a favour.
Quoting both a buy and a sell price continuously, a market maker earns the difference. That difference compensates for real risk, since a resting order can be filled by someone trading on information the maker lacks. Wider spreads price that risk higher.
Competition compresses spreads. With many makers quoting the same asset, each undercuts the last until the gap approaches the cost of providing the service. Thin competition leaves it wide.
How to read a spread
Read it in percentage terms rather than absolute, since a three-cent gap on a $100 token means something entirely different from the same gap on a token trading at three dollars. Percentages travel. Absolutes do not.
Divide the gap by the midpoint price, and you have the spread percentage. Three cents on a $100 midpoint gives 0.03%.
| Spread | What it indicates |
|---|---|
| Under 0.05% | Deep, competitive market |
| 0.05% to 0.5% | Reasonable liquidity |
| 0.5% to 2% | Thin. Round-trip costs become material |
| Above 2% | Very thin. Entry and exit together cost several percent |
What makes a spread widen
- Falling liquidity. Fewer market makers, wider quotes.
- Volatility. Risk of adverse selection rises, so makers demand more compensation.
- Off-hours trading. Spreads widen outside the dominant regions' active periods.
- Market stress. During the crash of 10 October 2025, market makers withdrew quotes across venues and books went effectively one-sided.
- Small-cap assets. Less competition, less depth, wider gaps as a structural feature.
- Uncommon trading pairs. The same token can quote tightly against USDT and terribly against a less common quote currency.
Spread, slippage, and fees are three different costs
Frequently conflated, and worth separating properly.
Crossing from bid to ask on any size costs you the spread.
Slippage is the additional cost when your order is larger than the volume available at the best price, forcing it to climb through worse levels.
Charged by the exchange, usually as a percentage, the fee splits between maker and taker rates.
Of the three costs, only the fee appears in a published schedule. That is why comparing venues on advertised rates alone reaches the wrong conclusion. On thin markets the first two together routinely exceed it by an order of magnitude, which is why comparing exchanges on advertised fees alone misleads.
How traders manage it
Descriptively, since the right approach depends on what you are doing.
Placing a limit order inside the spread avoids crossing it, and risks the order never filling. Some traders quote at the midpoint and wait.
Trading the deepest available pair avoids the worst spreads. So does staying out of thin hours for anything substantial.
For anyone trading frequently, round-trip cost is what matters. Paid on entry and exit, a 0.4% spread becomes 0.8% before fees, which compounds quickly across many trades.
Put this into practice on mb.io
The spread you pay is a property of the venue's liquidity, not something you can negotiate afterwards.
mb.io is a regulated crypto spot exchange backed by MultiBank Group, a financial institution founded in 2005 that serves more than 2 million clients across 100+ countries.
- Regulated by VARA in the UAE and AUSTRAC in Australia
- 40-nanosecond execution speed
- 10/10 security score from Hacken, an independent blockchain security auditor
- Institutional-grade MPC custody powered by Fireblocks, with segregated client funds
- A curated list of assets, so you're not trading into thin books on tokens nobody supports
- 24/7 multilingual client support
Open your account and start trading on mb.io.
Frequently asked questions
What is the bid-ask spread?
The gap between the highest price a buyer will pay and the lowest a seller will accept. It is the first cost of trading, paid before any exchange fee, and it exists on every market.
Why is the spread wider on small tokens?
Fewer market makers compete to quote them, and less depth sits on either side. Both effects raise the compensation makers require, which shows up directly as a wider gap.
Is the spread the same as slippage?
No. The spread is the cost of crossing from bid to ask on any size. Slippage is the additional cost when your order exceeds the volume available at the best price and climbs through worse levels.
How do I avoid paying the spread?
Place a limit order inside it and wait rather than crossing. You avoid the cost and accept that the order may never fill, which is the standard trade-off between price and execution.
What is a good spread in crypto?
Under 0.05% indicates a deep, competitive market. Above 2% means entry and exit together cost several percent before fees, which materially changes what a trade needs to earn.
Why did the spread widen suddenly?
Usually volatility or market stress. Makers widen quotes or withdraw entirely when risk rises, which is why spreads are worst at exactly the moment people most want to trade.
Does the spread count as a fee?
Not formally, and it costs you the same way. No exchange lists it in a fee schedule, and on thin markets it frequently exceeds the advertised fee by a wide margin.
Who earns the spread?
Market makers, who quote both sides continuously and capture the difference. That income compensates them for the risk that a resting order gets filled by better-informed traders.
