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Title: Arbitrage through spendbitcoins.com (or similar services) Post by: bitfoo on August 06, 2011, 03:01:05 AM 1) Buy bitcoins from Mtgox @ $9.60
2) Buy Amazon gift cards using above bitcoins on spendbitcoins.com @ $10.24 3) ??? 4) Profit!! Merchants accepting bitcoins at weighted average prices should theoretically prevent BTC value from dropping too much in a single day. Thoughts? Would you do this? It's definitely a no-brainer if you want to buy something from Amazon today. Title: Re: Arbitrage through spendbitcoins.com (or similar services) Post by: EricSU on August 06, 2011, 03:06:09 AM Why would someone buy bitcoins and then buy amazon gift card with them if it means losing money?
Selling amazon gift cards even at a markup its probably still a good idea, for those who already have bitcoins and looking to spend them. You can program your site to instantly sell your BTC on mtgox if you don't want to hold them. Title: Re: Arbitrage through spendbitcoins.com (or similar services) Post by: bitfoo on August 06, 2011, 03:14:46 AM Why would someone buy bitcoins and then buy amazon gift card with them if it means losing money? If you want something from Amazon right now, you're not losing money, you're gaining. spendbitcoins.com doesn't mark up the prices. Right now, they offer a value of $10.22 per bitcoin, each of which you can buy for 50 cents less at MtGox. In short, you can currently buy a $100 Amazon gift card for $95. If enough people do this the mtgox price should converge to the daily weighted average. Title: Re: Arbitrage through spendbitcoins.com (or similar services) Post by: EricSU on August 06, 2011, 03:22:00 AM Oh lol I thought it was the other way around.
So really spendbitcoins is losing money then, if enough people did it they would go out of business, unless BTC value was going up to make up the difference. Title: Re: Arbitrage through spendbitcoins.com (or similar services) Post by: nomadwfs on August 08, 2011, 11:27:34 PM Why do people keep thinking that "well, if I can convince enough people to do x..." somehow the price will change?
The price of bitcoins is not affected by the stuff people post here. It's affected by what people actually DO with their fiat and their BTC. Also, arbitrage is by definition, taking advantage of a market inefficiency for profit. The reason why markets are, on a whole, efficient is because people exploit these inefficiencies. While it is likely that a large group of people will exploit this inefficiency, more likely the spendbitcoins.com owner will change his exchange rate to quit hemorrhaging money. Title: Re: Arbitrage through spendbitcoins.com (or similar services) Post by: kjj on August 09, 2011, 12:07:29 AM And that is exactly what he is doing now in a different thread.
Title: Re: Arbitrage through spendbitcoins.com (or similar services) Post by: bitfoo on August 09, 2011, 06:51:20 AM And that is exactly what he is doing now in a different thread. Well, I'm glad. It's in our interest that these guys remain profitable and stick around. |