Order Book

A real-time electronic list of buy and sell orders for a digital asset, organized by price level.

What is Order Book?

An order book is a dynamic ledger on digital asset exchanges that displays all pending buy (bids) and sell (asks) orders for a specific trading pair, such as BTC/USD, showing the price and quantity for each order. It aggregates supply and demand in real-time, enabling transparent price discovery as new orders are matched by the exchange’s engine. For instance, on platforms like Binance or Coinbase, the order book is split vertically with bids in green below and asks in red above, updating constantly to reflect market activity.

Exchanges like Coinbase do not hold the assets but act as intermediaries, pairing buyers and sellers based on the order book data. In practice, if a market buy order for 30 BTC is placed when the lowest ask is $66,500 for 10 BTC and the next is $66,775 for 100 BTC, the order fills partially at each level, totaling $2,000,500 plus fees. This mechanism reveals market depth, with deeper books indicating higher liquidity and narrower spreads.