Early this morning, Bitstamp, a popular bitcoin exchange, experienced technical issues and halted trading. Bitstamp's order book is a part of the Bitcoin Best Bid (BBB) rate, our global bitcoin exchange rate. The BBB rate is determined by consolidating the order books of all global exchanges which meet our standards, and calculating the best bitcoin exchange rate available worldwide.
Because Bitstamp's exchange rate remained higher than other exchanges, the BBB maintained a price of $276.80 per bitcoin, even as the price on other exchanges dipped. After it became clear that Bitstamp's reported price was no longer reflective of the market, our business team decided to temporarily remove Bitstamp from our BBB exchange rate calculation. Our merchants experienced no interruption in service over this episode, and bitcoin customers continued to receive the most favorable price available globally.
The BitPay BBB rate is based on the order books of bitcoin exchanges that we vet extensively – we adhere to extremely high standards of accounting and regulatory compliance. When considering a relationship with an exchange, we take into account a number of important factors including liquidity, legal and regulatory compliance, AML & KYC standards, banking relationships, a visible order book, counterparty risk, and our internal auditing requirements. We require both proof of reserves and a BitPay-managed review of trading volume. We are constantly evaluating available bitcoin exchanges for the BBB calculation.
The BBB rate is calculated by simulating an auto-routing market sell order, across all exchanges, with zero commission fees. Buyers will always get a better value by spending their bitcoin at a BitPay merchant than by selling them on an exchange. More information on the BBB is available on our Bitcoin Exchange Rates page.