Post
Topic
Board Bitcoin Discussion
Re: What does Bitpay do to avoid the fluctuation risk of exchange rate?
by
abbyd
on 29/05/2013, 23:51:15 UTC

It's the other way around. Not placing a sales order at the price that they gave to the customer. They give the customer price calculated basing on current bid prices available at the exchanges and they simply put ask orders to match available bid offers - placing that ask order at the exchange at the same time as displaying the price to the customer (for some percentage of the transaction amount, basing on probability of the deal to go through). The whole process should work more in real time than I described in my previous post, but I wanted to simplify the example to be easier understandable, hence the 10-second periods.


Well, if they're market players, they'll only put in a BTC buy order when the BTC price is dropping. If BTC value is rising, they can pocket the BTC, and happily pay less cash than the coins will be worth in the future... As long as they have some bankroll (which they appear to), they should be fine.