Bitcoin Forum

15 dollar arbitrage between bitstamp and gox right now??? thats ridiculous, anyone know why?

Because MtGox is a money black hole, absorbing all your money and refuse to pay back.
The only way to exit is to buy bitcoins there and sent them elsewhere, this explains the consistent buying pressure there.

An arbitrage is meaningless if your money cannot leave, right?

gotcha !

% arbitrage between gox and bitstamp is proportional to percieved % odds of mtgox defaulting

and hoping your BTC withdrawal will be not delayed (lost)

Frankly I think all this panic over MtGox's problems is a bit silly. Of course there's a risk of MtGox defaulting (and even if that happens, it's very likely people will get (most of) their money back eventually). But there's a significant risk of default/regulatory takedown on every single other exchange too. So far, it does seem that Gox is actually processing their withdrawals, albeit very slowly. So, if you're going to sell, it would make sense to sell on MtGox and withdraw immediately and then wait the several months for the money to arrive, unless you're fairly certain you can get a better deal in some other manner.

That's why the difference is only 15%, not 50%

If MtGox was exchanging anything other than bitcoins, the superman of currency, it would be dead by now.

This is MTGOX's financial innovation: The withdraw time is so long that people are all forced to do long term investment in bitcoin, and the price will rise long term wise, this protect the exchange rate  ;D

If it takes several months to withdraw your dollars from NASDAQ, you would just buy some stock and hold them for years before you withdraw

I would expect BTC from Bitstamp to flow (and be sold immediately) into Gox anytime.
That's what I would do if my latest deposit on Bitstamp would have reached my account.
Usually the difference has been 8 - 10 $, and could return to that after this mini-rally bursts.

5% spread two weeks ago.
10% spread last week.
15% spread this week. 

If Mt. Gox was a real broker/dealer, they would have been shut down within a day or two of their first default.  Like Lehman, Drexel, MF Global, etc. 

i got my coins out the other day without problem

+1

No, the fair exchange rate is that of a liquid market where both Bitcoins and cash can be deposited and withdrawn without difficulty. Bitstamp and BTCE are roughly that, and their prices are close together. Right now:

Exchange	Unit	Quote
BTCE	US$/BTC	98.00
Bitstamp	US$/BTC	98.88
MtGox	US$/BTC	113.20

That 15% premium on Mt. Gox is a risk premium - will you ever see your USD again?  You can no longer view Mt. Gox prices as a value of Bitcoin.

I'd agree that 2-3% below gox is significantly overvaluing. Maybe closer to 10%, probably more.

This shit always brings me back to online poker. When the Cake network was taking 4-6+ months to wire money (and talk of insolvency was at an all-time high), people were taking 50-60¢ / $1 for cash in hand. Even with the more reputable rooms, up to 30% vig was the norm -- fear of insolvency being much less of an issue, this is the price of waiting 2+ months to receive your money. (Well, worse really, because the checks from shady companies drawn on foreign banks are liable to bounce up to 6 weeks after deposit)

I have no evidence, but I can certainly conceive of a situation where no banks would touch Gox with a 10-foot pole, and they'd be right. I think Gox may have fucked itself forever. This may never, ever, resolve until its market share has dwindled to the point that its miniscule payment processing partners can handle the volume. Either that, or Gox could shave significant profits by working with shadier, high-margin payment processors.

Totally agree - they have been trying for about 2 months now to now avail - what is going to make the situation better ? Who have they not called yet ? The longer it goes on, the more likely it becomes, if it has not happened already
The run on Gox will be EPIC ... sky high prices until nobody will sell BTC there anymore
A Gox  $ IOU becomes worth less by the day

MtGox is the Lock Poker of bitcoin.  They take your money, and you never see it again, just make excuse after excuse

I can't believe anyone is still wiring them money .... that just does not make sense to me

A mistrustful part of me suspects that MtGox is making huge profits arbitraging the price difference themselves, which gives them a perverse motivation to keep withdrawals slow.

then you would have USD on gox, which you can never get

the market is always right

mtgox/coinbase spread is also growing over the last couple weeks, now ~$12 difference.

this indicates significant problems beyond some simple delays in withdraw/deposit times at mtgox.  i do not know exactly what problems, but we will find out eventually.

i have not used mtgox recently therefore unaware of all the details that are public.  but a quick glance at their website led me to the following statement that strikes me as somewhat fishy:

yeah ive been noticing the price difference for almost a week now. Gox is always higher it seems.

 ;D

I updated the ticker on my website as it has been pointless in showing a MtGox comparison for some time.

I replaced it with real-time animated sliders showing rmbtb.com, btcchina.com, Mtgox, Bitstamp, and BTC-e.

Unfortunately it still isn't quite as informative as I hoped!

https://i.imgur.com/hAPFzKo.png

LOL.

I would only expect this amount to widen as long as Gox has a lag on their FIAT withdrawal methods.

Has anyone even gotten a wire from them and can confirm say a 4 digit wire that has completed?

The recent rally is happening on all exchanges with volume, means there are significant amount of arbitraging between them. It is difficult to imagine that the buyer bought coin from all the exchanges at the same time

But this is good for bitcoin, it means no one can manipulate a single exchange with large amount of capital, because he will face all the arbitraging orders from other exchanges

There is no benefit in removing the fear, uncertainty and doubt in the current situation.

Right now, one man's fear is another man's profit.

+1

If you could get 4 figures out of Gox, would you blab about it our arbitrage the shit out of it?

Unfortunately I have a feeling you might be spot on with that theory...

If anyone was making huge profits on the arb then the gap would close to a few dollars. It isn't, which means that MtGox is under huge stress trying to do any transfers. The last thing MtGox wants is a crippled business. The long-term profits from commission far outweigh any temporary games trading the arb on their own account.

They are hemorrhaging market share by the day. They are in a fight for survival while the fiat banking system has a hobnailed boot on their windpipe.
 

If each country has 6-10 large bitcoin dealers advertising their buy/sell order on localbitcoins.com, each of them have an order depth of 1000 coins, then people could move away from traditional exchanges and be independant of international bank transfers

It's very easy to setup a buy order ladder since everyone have fiat money, but it is more difficult to build up a sell order ladder since that will require huge amount of coins

Unless supply = demand in each and every country, international transfers will still need to happen.

The localbitcoins.com could use an automated market making system to adjust the bid and ask price for the largest 6-10 dealers' order

For example, if the demand for bitcoin is too high (Too much coins were bought from those dealers in a short time frame), they will automatically raise the bid/ask price for those large dealers, thus reduce the demand for coins. If the sell pressure is too high, they will lower the bid and ask price for those large dealers, thus increase the buying support. How much to raise or lower is the question here, it should provide low slippage but still enough flexibility

I arbitrage between btc-e and mt gox all the time. The way you could do it is buy coins from either bitstamp or btc-e and sell them to me. I will pay a few percent under gox. Or any trusted member for tons of methods.

What is the constant in that proportionality?

Sure, but if prices get out of whack people will start importing bitcoins from other countries and exporting their fiat to keep prices in sync.  Doing this in a decentralized nature will still likely be way easier than a handful of major institutions attempting to move millions of dollars in 4-5 figure increments.

Mtgox need to offer Ripple as a cash in/out method like BitStamp.. this will entice people holding MtGoxUSD to hold onto them (as ripple assets) instead of exchanging for BTC and withdrawing.

Then users can trade their MtGoxUSD freely with other ripple assets, including BitStamp directly.. If MtGox are really having reserve problems this could extend their game a little longer.. but also allow liquid trading of GoxUSD and better arbitrage opportunities.

Mtgox were probably hesitant to adopt Ripple because they had such a dominating market share and didn't need too.. but that is quickly disappearing.

There are regulatory issues with issuing tradeable USD denominated IOUs.  MtGox used to provide codes that allowed that before Ripple existed, but they shut it down because they have enough legal headaches as it is.  Bitstamp is asking for trouble.  Just look at how things turned out for Liberty Reserve.

Trust in them is worth much more. A properly working Gox is a money making machine.

may be this can be informative too

https://bitcointalk.org/index.php?topic=261071.msg2942341#msg2942341

It all doesn't matter really. Fact is that gox has serious banking problems as indeed the price difference proves that arbitraging isn't done decently, even not by themselves or their friends. They may have a lot of capital reserves, they will still have to close shop if they continue to be unable to find a banking partner. Since banking partners have good reason to avoid gox since they are now targeted by homeland security and have US bank accounts frozen, I don't think the banking problem will be resolved soon.

It's too late for gox to now simply reject US customers as this won't change their accounts being frozen in the US and them being chased by Homeland Security. And as long as this is the case they will have a hard time finding a banking partner.

It looks to me Mtgox is now forced to get a US license so that it's accounts are unfrozen. As long as they don't do that banks will avoid them I think. Mtgox will have to get a license in all 52 US states though, as authorities will look for any reason to keep the accounts frozen, so I would think that can take years and will cost millions. As usual it's just a shakedown. However, in the meantime customers will get frustrated more and more.

Unless your withdrawals are being processed for some mystical reason, I think it's smart to not do the arbitrage as chances are high the 10% you think you make will end up costing you 10% when you finally give up on mtgox and have to get your fiat out for 20% premium over bitstamp. Could even end up being a lot more if you are susceptible to panicking with the herd.  

The market making mechanism is to build a reserve and deal with short term supply and demand volatility, for long term change in supply and demand, those delay at banking will not affect dealer too much

So happy I paid the 5$ dollar premium to get out now...

Don't blame gox for USD withdrawal time. Blame your retarded government.

I withdraw AUD from gox and it takes 1 business day!

Why aren't you making insane amounts of money yet then  ???


Edit: ... Or are you

I'm not talking about supply/demand volatility.  I'm talking about supply/demand imbalance within a particular country.  Some countries will be net importers of Bitcoin.  Some countries will be exporters.  Fiat (or some commodity money or good I suppose) will have to be used to settle up the difference.

When?

I think this is simply not true.

They would be sending AUD via SWIFT correct?

I have EUR and PLN waiting to be withdrawn for weeks as well.

Swift?  I'm not sure...

Last time I withdrew money, I needed for a power bill on a monday/Tuesday night. On the Thursday it was there!

I was like HOLY SHIT.

True story  ;)

When was this ? Since July ?

June or July.

Exact date would be informative, as the problems started in July (not that there were no issues before lol)
Have you tried again recently ? Would be very interesting to know if it worked again now

This. Traditional banking and exchange channels would still be required. The only way to put them to rest and let bitcoin be all it can be is to nurture and grow bitcoin economy, where coins are directly used for goods, services, and salaries. A global currency.

Where was the transfer from? An AUS bank? Or an international wire transfer from Mizou bank in Japan....?

BTC skyrocketing because people want their fiat. Strange times.

only from gox, people still buying BTC on btc-e and bitstamp.

Is there a good online chart of the arbitrage spread?

First, you have to tell us what the endgame  (https://bitcointalk.org/index.php?topic=55024.0)is. We need to know.

maybe this? https://bitcointalk.org/index.php?topic=261071.msg2942341#msg2942341

There would not be a 20% spread because a few people are afraid. 

There would be a 20% (and growing) spread if insiders recognized a critical problem at mtgox and are getting their money the fuck out.

Hmm maybe as an insider, he can fly to Japan and create an bank account there rather than lose 20%

I keep seeing people make comments along these lines in discussions of the inter-exchange spread (and the USD-withdrawal problems that are clearly driving it).  Does anyone actually have any first-hand knowledge about whether someone physically present (resident?) in Tokyo is able to withdraw their fiat in JPY instantaneously (or on a same-day basis), either via transfer to a Japanese bank account or by walking into their office in Shibuya and asking them to cut you a check on the spot?

Obviously my question goes, in part, to whether the issue really is "merely" a quasi-bank-blockade (or even just non-sinister MTGOX incompetence), vs. a more serious liquidity/solvency problem.  But, hell, if this spread keeps up -- and if they really would happily cut you a JPY check on the spot -- then it's starting to look awfully tempting to book a First Class flight for a long-weekend trip to Tokyo, have some great sushi and sake and enjoy the sights and sounds of Roppongi, all more-than-fully paid for courtesy of Homeland-Security-generated market imperfections...

I tend to think it is a more serious problem that only certain insiders are fully informed about.  Not to sling mud, but I would cease all dealings with Mt. Gox until the issue is made public.  Personally, I stopped dealing with them around the time of the CoinLab partnership announcement.  Whatever happened to that anyway...?

Finally, mtgox prices are higher for all currencies.  Just checked bitcoincharts.  Not a USD specific issue - it's a mtgox issue.  Not convinced the $2.9mm US Gov seizure is the end of the story, or itself enough to explain this spread.

It is possible that gox is insolvent and $65M are blocked by Coinlab lawsuit. ... insiders knows :-)

+1

what a fucking clown car

...in other news...I'm setting up a BTC address where you can donate to me flying to Japan to punch Mark Karpeles in the face :-X ... I think BTC people would pay-per-view that shit...

Who's in?

if gox uses our money as loan then let him pay us  interest.

EDIT: 
USD average loan rates in % per 365 days is 36.7552% at Bitfinex

https://bitfinex.com/pages/stats

Good luck getting interest if they don't even have the money to pay you back.

I really don't get how something like a "money block" or insolvency should drive the price up, except there's a big demand from people, that have themselves dedicated to gox
by all means

All the insiders would transfer their btc to another wallet and request a fiat payout. As consequence we'd get a shortage in supply, but there should also be less demand on gox, because:
              - the price on other exchanges is cheaper
              - the discussion and opinions about that are free accessible to everybody
              - most people aren't that stupid. true story.

What do i not see?  ???

The money block or insolvency has the effect of making fiat withdrawals impossible. So there are tens of millions of dollars sitting on mtGox that cannot be withdrawn. But those people still want their money back, so the only way to get it is to buy bitcoins. Nobody is going to move coins to gox since they cannot get the money out, so we have a shortage of supply and a demand that is artificially inflated.

offtopic but now did you post here with only one post count?

first thanks @Peter  :)

and @ Freedom: I have about 8 hours of online time spent on this board... so no worries, I read a few things   ;D

ah cool, i like your avatar.

Thank you :D

Bitcoin.de is slowly closing the gap to gox, whats the matter with bitstamp?

You should read this thread again coz u missed something. Or you just trolling?

Btc-e and bitstamp difference almost $5.  Why is this gap not closing?

Why are you pointing it out? Jump on that arbitrage before somebody else does!

How much money would it take to consolidate their prices? If you did it right now, how much money would you make? You can say the difference is $5, but is that $5 with a $0.01 volume between them or a $100000000 volume?

Edit: Answering my own questions, with a quick glance at bitcoincharts, it looks like the price is already closer, down to a $3 difference with a volume of 300 btc or so, so you could make a couple hundred dollars if you already have several hundred bitcoins at Bitstamp and several tens of thousands of dollars at Btc-e. If you have that much money sitting on the exchange, that couple hundred dollars is starting to look insignificant.

there is a page which helps to compare arbitrage depending on several target BTC volumes. http://bitcoin-analytics.com/#arbitrage