The bid price is the highest amount a buyer is willing to pay for certain goods – in our case, crypto. Multiple buyers’ bid prices and sellers’ asking prices make up a trading order book. The highest bid price is always less than the lowest asking price, and the difference is known as the bid-ask spread.
Traders or investors who want to sell their assets must either accept one of the bid prices on the order book or establish an asking price and wait for a buyer to bid against it before filing an order. Traders in the financial markets have the power to choose the price at which they are willing to purchase or sell an asset, and they do so when they place their order. Their order will be rejected if the set’s price differs too much from the current market price.
A bidding war occurs when numerous buyers compete for the same asset and submit bids one after another. When buyers replace their bids higher and higher to cover the bids of other competing buyers in a bidding war, market values for that item will almost certainly rise swiftly.
