How does peer to peer exchange work? Unlike an exchange office, where the operator provides exchange to customers from his own stock, Coinmate as a peer to peer exchange only provides a matching engine. Peer to peer exchange clients place bids and asks to buy and sell and the operator does not enter the trade. When bids and asks match at a certain price, the trades take place. We at Coinmate peer to peer exchange do not influence the price on the market, the price is simply created based on supply and demand.
If the price deviates from other markets, traders are incentivized to take advantage of it, for example by simply selling high on one market and buying low on another market. Anyone can do this and take the profit in such a free peer to peer market.
After last week’s significant crypto price drop, the demand on Coinmate CZK pairs has greatly exceeded supply (more people wanting to buy than sell) resulting in increased price on CZK pairs. Speculators were not quick enough to take advantage of the possible profit because FIAT transfers take some time. And for such reason, the price on crypto/CZK pairs remained above the Euro equivalent throughout most of today.
The almost 50% drop from last week was extraordinary but we are already taking measures to supply more liquidity to the CZK market so that such a situation will not happen again in the future.
We sincerely apologize if you found the CZK price on Coinmate too high today but as explained above, we do not influence the price in any way and it may take some time for the price to reach equilibrium if demand or supply greatly exceeds the other. The CZK price on Coinmate crypto pairs is returning back to normal as of now.
