Crypto glossary
Bid-ask spread
The bid-ask spread is the gap between the highest price a buyer will pay and the lowest price a seller will accept for an asset at a given moment.
Every order book has a best bid, the highest buy order, and a best ask, the cheapest sell order. The difference between them is the spread, often expressed as a percentage of the price. A trader who buys at the ask and immediately sells at the bid loses the spread, so it is a hidden cost of trading.
Major pairs such as BTC/USDT on large exchanges often have spreads of a tiny fraction of a percent, while small tokens can show gaps of several percent. Market makers earn the spread by quoting both sides, and exchanges compete on tight spreads to attract volume. On DEXs the equivalent costs come from pool fees and price impact rather than a visible spread.
Spreads widen during sharp moves, news events and quiet hours, when market makers pull back. Using limit orders instead of market orders avoids paying the full spread, and comparing spreads helps judge whether a market is liquid enough for a given trade size.
Example
If a small token has a best bid of 0.95 dollars and a best ask of 1.00, the spread is 0.05 dollars, about 5%, so buying and selling at once would lose roughly that much before fees.
