Bitcoin Forum

Someone figured out arbitrage. Profited off of Gox's inflated price.

Equalized prices across exchanges.

Caused short term panic across other exchanges causing global drop in price.

Prices back to normal by tomorrow.

Gox's new normal = prices on every other exchange.

Ask yourself a question.

If that were the case, do you really think that you would be the first person to think of it?

For a very long time, MtGox users have reported problems moving fiat off the exchange. Now they are saying that they can't even get Bitcoins off the exchange. So where does arbitrage come into this?

Just because it isn't something you can't fathom, doesn't mean it can't be true.

Gox CEO bought major put options that BTC is going down big time. So, he crashes his exchange, watches others follow. Cashes in.

gox is like a drunken abusive husband with a wife that keeps coming back.

you don't understand, deep down he loves me.

I would rather think that it is you that can't fathom a thing or two around here.

A more interesting proposition might be that some Wall Street money is going to take a large position through Gox's demise. If nobody can get BTC or fiat off the exchange, BTC on Gox is going to be worthless. But perhaps certain entities can guarantee that they get their fiat and BTC off the exchange and if that were to be the case, it would be hugely within their interests to crash Gox, and leave the exchange to burn with a sack of cheap coins slung over their backs as they ride of into the sun.

That's not arbitrage.  Arbitrage is taking advantage of different prices for the same commodity by buying at Place A and quickly selling at Place B and pocketing the price difference as profit.  

Someone selling bitcoins at MtGox and then taking that money and buying more bitcoins at say, BTCe, quickly runs into a major problem: MtGox is taking weeks and sometimes months to process money transfers.  By the time you have your money to buy bitcoins there is no arbitrage position.


That's just dumping with the anticipation that others will panic and follow suit.  It's not arbitrage.


Assuming the little artificial crash doesn't snowball with others speculators and investors thinking 'well, time to dump'.  The price keeps falling as you buy back in, and continues to fall.  Again, that's not arbitrage.

Wiki: "For instance, an arbitrage is present when there is the opportunity to instantaneously buy low and sell high."  MtGox won't let you have the money you made, and there's a real risk the exchange will fold before they even think of giving it to you.  Right now MtGox is refusing to even process many bitcoin outputs.