not entirely sure if its false advertising; I’ve reached out to support various times to understand their methodology. They’ve given me the same answer each time:
“our rates are derived from our exchange partner. They are calculated as a Volume Weighted Average Price (VWAP) with a mark-up of 1.5% to account for trading volatility and the price you see in the app is locked in at the time of the exchange. Please refer to our FAQs for more info”
My guess is that they have a ‘Fair’ value for the rate based on their VWAP (still no clue how they calculate this - what time window, etc) and add an extra 1.5% on each side for “trading volatility”
For example BTC/USD is currently trading around 16,600. Lets say Revolut’s VWAP price is somewhere around 16,000. Revolut should then give a market of
15,760 at 16,240 (1.5% on each side).
This is $480 spread represents 3%. However according to Revolut’s fees, this spread should never be larger than 3% regardless of the Price or volatility in the market.
I wouldn’t worry about the notional value of Revolut’s rate as other exchanges have their own prices. However this spread shouldn’t be larger than 3% (2 x 1.5%). I have seen this spread be larger numerous times, and it’s even larger for other cryptocurrencies. Also, I wouldn’t be surprised if this spread increased even more in volatile moments.
Currently, Revoluts spreads are the following:
Bid - 16208
Ask - 16778
Spread - 570
Spread as % - 3.5%
Bid - 500.8
Ask - 529.6
Spread - 570
Spread as % - 5.8%
I think we deserve an explanation for the spread