Bitcoin Forum

Hey guys,

I have been involved in Bitcoin arbitrage for several months now and it has been quite profitable. For those of you unaware how this works, arbitrage is the process of taking advantage of BTC price difference between BTC exchanges. In other words, purchasing Bitcoins on the exchange with the lower price, and re-selling those same coins on another exchange and profiting through the difference.

I did some arbitrage on my own  last year when there was a huge spread between Mtgox and Bitstamp Bitcoin prices, in some cases between 5-10%. The main problem was how to move BTC and/or fiat between different exchanges and the fact that in order to reduce the arbitrage risk to a minimum one needs to be able to buy BTC on an exchange with low price while selling the same amount of BTC on another exchange with high price AT THE SAME TIME. Recently, the spread between exchanges is not so wide anymore but there are a lot more exchanges, so there is still a lot of money to be made on this.

Have you ever performed arbitrage on your own, were you successful, what was your biggest problem, please share your experience.

My arbitrage:

1)  Buy large quantity and hold in paper wallet.
2)  Buy smaller amount and hold in hot wallet.
3)  Spend smaller amount.
4)  Replenish smaller amount.

Repeat.

Guaranteed earnings.  Promise.

-B-

Heh, that is really cunning plan. But I am really interested in experiences of people who have been actually doing arbitrage. With this constant 2% spread on average between exchanges, there must be some people who profit on this. Am I the only one making money on BTC arbitrage?

There were plenty of people trying to doing this when Mt. Gox fell below the rest of the exchanges.

Bitcoin markets are inefficient and trading fees, withdrawal costs or slippage can easily eat up profits from a 2% spread. In your MtGox example, they were extremely inefficient, hence the large spread.  If there is arbitrage profit to be made, people will be doing it.

I do, however, feel that this thread was created to advertise the HYIP (scam) referral links in your signature.

Hope you don't mind me asking, but are you in the US?  The only reason I ask is because I know a while back a bunch of people had their accounts frozen when they were conducting high volume Bitcoin transactions.  Just something to be aware of. 

So many incorrect info in and trolling in a single post. I am not sure whether I should waste my time answering, but let me say a few words. First, I have been doing arbitrage for a long time, I ll only mention I did it when Bitinstant was around. Second, it was profitable and it still is, I still do it and bunch of other people do it and their opinion is what I would like to hear. Instead of posting any meaningful opinion, you offer me 101 Introductory to economics, troll this thread and end up saying nothing about the actual topic. Do you have any experience in arbitrage? No, I do not think so. Do you intend to do arbitrage? No, I do not think so. So what, oh what is the point spending your time on this post?

Still, I thank you on your lecture in economics. I went through market inefficiencies 15 years ago but it is always nice to have another lecture.

Well, among all my friends, yes.   Every one of them ultimately lost all their BTC trying to play the system.  Or got it stolen out of their online accounts.  Seriously.   All of them.  
I would be interested in what kind of money you are making.  I know there are some guys making money in this forum doing arbitrage.  But part me assumes its not very much, and not worth the risk.
If for example you've brought yourself from 10 BTC to 20 BTC, I would be interested in hearing about it.  It takes guts honestly.  

PS:  Go to the Economics forum, then Speculation subforum and you'll meet 500 dudes who are doing this.
PPS:  Starting a thread on arbitrage and having those signature URL's might be considered strange.

-B-

Thx for this warning but no problem about this, I am in Europe and my transactions are not high. Just enough to be more profitable then mining.

I'm inclined to agree with this. I'm sure you DO make a small amount of profit with every trade by doing this, but there are risks, and of course you are spending a good amount of time doing this (and waiting for confirmations every time you move BTC). I remember this topic actually coming up quite a lot on reddit's bitcoin sections when I used to frequent them, and most of the time people's general sentiment would be that it's not worth it and I tend to agree. If you are making money with it good for you but I doubt there's a lot of people doing it, and I doubt even more that they would share their successes.

Hehe, what s so strange about my links, I am into this, sure I have links about it. I am not trying to hide those in any way or sell anything, they are clearly labeled as affiliate links and they are in my signature. I also have a few e-books, bunch of arbitrage related websites, lots of graphs and charts. Regarding links, don`t click my links, they are not related to this post. Is it better now?  ;D ;D ;D

Thank you for your post, yes, this is something I agree with. The entire arbitrage is risky but what related to BTC ecosystem is not? Mining speculative coins and waiting for the price to go up? How many of those people have in their wallets never to use again? Investing into cloud hashing which absolutely never reaches ROI? Tons of people do that. Investing tons of cash into Butterfly labs and similar ASIC machines which get delivered a year after their deadline and are next to useless. Lots of people did that. Mtgox? Do not even want to go there.
My point is that all these are EXTREMELY risky ventures and still people do it, a few make money, the rest lose money. Personally, I have managed to make a nice ROI so far. This is not something you can live on, you are correct but the main problem is that people focus only on Bitstamp and BTCe and prices there. The most money I made taking advantage of BTC prices on smaller exchanges.

So are you basically making $3.00 here and $1.50 there, after fees?
Because to me the pain involved in coordinating all that just for $3.00 wouldn't be worth it.
And lets say you're playing with 10x that much.  Not sure even $30 a day would be worth all the effort and stress.
Then again day traders stress and sweat and fret and toil over a few dollars a day, en masse.  
I can't deal with it unless I am making big bucks...

Well, good for you, if those numbers you have mentioned are not satisfactory for you, all I can say is, congrats, good for you.
In my case, $100 per day is not something I am going to pass. Unfortunately, I do not get that much per day because there are always gaps when I am waiting for my BTC/fiat to change exchanges.

'y' = the roughly equivalent amount of LTC to x amount of BTC (in value)

Start with 'x' amount of BTC on a typically lower-rate BTC/LTC exchange

Start with 'y' amount of LTC on a typically higher-rate BTC/LTC exchange

When a spread in price is detected between the exchanges, simultaneously buy 'z' amount of LTC at the lower-rate exchange and sell 'z' amount of LTC at higher-rate exchange, effectively refreshing your LTC balance at a cheaper rate, every time.

Taking it a step further would be to scan the order book to see how much you could buy/sell exactly, to lower the risk of mistakenly overextending what the market inefficiency can handle. This is recommended to be done by a bot or some sort of automated system however, seeing as it requires a lot of calculations in a very short amount of time.

When you've exhausted your funds, reallocate profits and repeat.

This effectively mitigates exposure to the risk of not being fast enough to catch the inefficiency while it exists, that most arbitragers experience in the crypto space (and it's worked pretty well for me  ;) )

Let's take a closer look at what I really said:

Compared to more traditional markets, trading fees are higher, there is less liquidity and withdrawal times (in fiat) are longer and more expensive (generally). Half a percent (for example) on each side plus withdrawal fees easily eat into your profit.
Before suspending bitcoin withdrawals, their price was 10+% higher then other markets because people were unable to get their fiat out in a reasonable time frame. If anyone was able to get their fiat out, they would be able to make tremendous profits. Some may have had this opportunity, but most did not.
Yes, people do arbitrage successfully. No reason for it not to happen if the opportunity is there. There may at times be small profit to be made at the popular exchanges, which could be easily taken advantage of by a bot. Localbitcoin can be much more lucrative if you are willing to put in the extra work, large spreads are fairly common there.
It seems somewhat suspicious, given the topic, that you have two referral links to "arbitrage" companies in your signature. These both appear to be pretty obvious HYIP/Ponzi type scams.

Thank you for your comments, these are much more productive then previous ones. Regarding your comments about my links, I do not agree with you, some of these sites have been around and paying for almost 6 months and more, there are bunch of online reviews of these and NOT a single negative experience yet. At least I have not been able to find it. Having this in mind, I do agree that any Bitcoin-related service is potentially risky and people need to understand the process and risks related to Bitcoin arbitrage as well as with all these other BTC related services which I have posted before. I used Mtgox a year ago and never thought they might go under, so be CAREFUL.

2% spread on exchanges does not include withdrawal fee's etc. so as long as you have large enough order sizes that can compensate the fee's and have an amount of dollar/alt/bitcoin on both exchanges for instant use. then the arbitrage is just the slower movement of funds to replenish the reserves you have just used in the trades.

sometimes its not worth it for a 1-2% as the time to replenish the reserves can make you miss out on bigger price changes.
(getting dollar from exchange A to exchange B is not a 10 minute task)

best method.. say you have $10k investment split it up into 4 reserves of $2.5k

exchange A
$2.5k deposited into here and left as dollar
$2.5k deposited and turned into bitcoin

exchange B
$2.5k deposited into here and left as dollar
if lower in price $2.5k deposited and turned into bitcoin
if higher in price use Exchange A to buy the bitcoin with the deposited reserve and transfer bitcoins to exchange B
and deposit the spare 4th $2.5k into exchange A to replenish that dollar reserve

now the rest is a juggling game

i mess around with arbitraging bitcoins with altcoins(fast exchange withdrawal/deposits). so feel free to replace the '$2.5k' with an altcoin amout of your choosing that matches bitcoin total you also have. and someone else said it, but i have 90% of funds in cold store and only play arbitrage with 10% of total. as thats my limit of trust with third parties.
the best volumes and price movements are on the dollar hense using dollar as an example. (slow dollar movement through accounts). id say small amounts below 5btc can get away with altcoin arbitraging. large amounts 20btc($10k+) can require bank transfers alot, just to be on high volume exchanges

Now this is the answer I was searching for. Franky1, thank you very much for this detailed plan, I ll try something similar, only with a bit lower investment. How I miss those days when Bitinstant and Mtgox were around.

What is Bitinstant?

I have achieved a kind of accident arbitrage when going from Coinjar (Australian) to BitNZ (New Zealand). Buying via Coinjar is a bit like buying from Coinbase- the fees aren't outrageous and withdrawal is free. BitNZ has poor liquidity, but this means that you can quite often get good selling rates because people are desperate to buy (given lack of orders) and move closer to the sell price.
I am not doing this for the purpose of arbitrage- I am simply wanting to go from AUD to NZD- but the end result 80% of the time is to achieve an end conversion that is better than the actual spot currency conversion rate- around about a 1.5-2% gain. I think it would be possible to buy back into BTC on Bitnz and achieve some BTC arbitrage too, but it would require a bit more patience for orders to fill. The benefit with low liquidity exchanges is that the market is often slow to react to broader market movements.

Great info, I ll look into these two, never used them before.  :)

Well with recent news about large investment funds getting into the picture, I expect BTC price to become quite volatile which might create a lot of arbitrage opportunities.

The problem with inter-exchange Bitcoin arbitrage is that many of the exchanges are sluggish about withdrawals. Also, what with all the fees, exchanges have to be more than 2-4% apart before it pays.

You also have to figure in a > 50% chance that any Bitcoin exchange will go bust.

the more you spend in bitcoins the better. so if you can start buying smaller items and things you use in bitcoin do it if its not costing you to much. it will help with the growth and stability of bitcoin with more people doing this

There was a significant gap between BTCe and Bitstamp today, due to this Chine-related volatility. Unfortunately, I had no fiat available to purchase so I did not sell.

Just sharing...
1. Find trading web with chat room but <100 peoples with low volume and no trade fees
2. Check the price, do fast buy let say 1% volume
3. Go to chat and trolling around for 1 hour (play good people, give good news, persuade to buy more etc...) and use different ID if you want
4. Step 2-3 for 3-5 times
5. Sell it back

In 3-5 hours I get about :
80% I get 5%
10% I get up to 20% << Sometimes people just buy what ever the price as long its the lowest
10% lost to 5%

So if I did with 100 BTC, I get :
Profit = 4 BTC + 0.5 BTC (Consider you got bad luck) - 0.5 BTC = 4 BTC

Thanks :D

Sneaky.  ;D

Though not arbitrage.  As I it's not really risk free.

Im just lucky because always profit until now. And yeah, nothings is free. Maybe 1 more profit I get is chatting for wasting time, waiting BTC generated from my miners...

The only real arbitrage I did was with bitcoinbuilder. I deposited money into Gox and got it out with around 70% profit margin. I was lucky to get it out in time, because two days later they froze their website. I don't see these opportunities anymore.

If you do arbitrage now, then if you calculate the arbitrage opportunities between exchanges after transaction costs, you can get on average 0.10$ per trade. So your just scalping the markets. This small profit margin wipes out very fast when you make some mistakes or do the wrong trade.  Also you have to do alot and very fast to make it profitable.

The main problem was how to move BTC and/or fiat between different exchanges and the fact that in order to reduce the arbitrage risk to a minimum one needs to be able to buy BTC on an exchange with low price while selling the same amount of BTC on another exchange with high price AT THE SAME TIME.

The second part of your posts is really not an issue, especially lately. Due to recent China related events, there is  a lot of volatility creating a lot of arbitrage opportunities. The first part of your post, how to move fiat between exchanges in an issue. Unless you have lots of liquidity. 

This weekend the spread between Bitstamp and BTC-e was $26 at one point. Really volatile market, really looks like as if somebody is influencing BTC supply and demand. 

i've tried this. the main issue i had was the amount of it takes to transfer BTC between exchanges. there is more risk if it takes long. volatility also increases risk.

but hearing that it can be profitable makes me want to look into it again.

True, volatility increases risk. But volatility is the essence of arbitrage. If all prices would be the same and stable, no trade there.

I guess yesterday was a good day to do arbitrage, over 2% rice difference between Bitstamp and BTCe at one point.

Has anyone tried any alts arbitrage and if yes, where and how?

Netcoins, I make about 10% per trade.
Netcoin on Cryptsy tends to be lower then on bter.com. (look for the NET/CNY pair)

The price gap between 2 major BTC exchanges is HUGE today, almost $20 per BTC or close to 4%. We ll see what result are we going to get. Does anyone have any idea why is this price gap so wide?

Hey guys,

I have been involved in Bitcoin arbitrage for several months now and it has been quite profitable. For those of you unaware how this works, arbitrage is the process of taking advantage of BTC price difference between BTC exchanges. In other words, purchasing Bitcoins on the exchange with the lower price, and re-selling those same coins on another exchange and profiting through the difference.

I did some arbitrage on my own  last year when there was a huge spread between Mtgox and Bitstamp Bitcoin prices, in some cases between 5-10%. The main problem was how to move BTC and/or fiat between different exchanges and the fact that in order to reduce the arbitrage risk to a minimum one needs to be able to buy BTC on an exchange with low price while selling the same amount of BTC on another exchange with high price AT THE SAME TIME. Recently, the spread between exchanges is not so wide anymore but there are a lot more exchanges, so there is still a lot of money to be made on this.

Have you ever performed arbitrage on your own, were you successful, what was your biggest problem, please share your experience.

***************************

so is it risk?
i don't have much money, but i want to buy and sell bitcoins.
if it is so profitable, i will do bitcoin arbitrage.

Higher transaction costs, The trader must pay the bid-ask spreads on three separate trades, Arbitrage opportunities are usually short-lived.

All true but for the last couple of weeks, the spread between major exchanges is between 2-3%. This leaves a lot of space for arbitrage.
When you factor in trading BTC for alt currencies, the entire story becomes even more interesting. ATM it is definitely profitable.

Crazyivan, can you tell me how you get fiat in and out of btc-e without taking a loss on the withdraw/deposit fees? I'm assuming that's one of the main exchanges you use to arbitrage. Would you share the other exchanges you use as well?

I do not do BTC-fiat arbitrage personally anymore cause I simply have no time to follow major exchanges. When I did it, there was a specialized website for transferring BTCe certificates into cash/BTC called Bitinstant. Unfortunatelly, they don't do that anymore and I am not sure whether there is any other website doing the same thing.

What I do now is use the website from my signature to do all this for me, have been using them since February and I am very happy with them. The other option I do is BTC-alts arbitrage, basically you follow the price of alt coins on different exchanges, Cryptsy, Mintpal, Poloniex, etc. and take advantage of their price difference vs BTC. If you do this, make sure to choose coins with quite fast confirmations since you must be able to transfer these from one exchange to another quite fast. Also, do not get greedy, aim for 5% price difference max cause this might be quite risky if you do not know what to do. Let me know if you need more help and be careful with your investments.

I have been investigating arbitrage options for some time now, and it looks to me as if a lot of people doing that do not change BTC to USD and then transfer the USD from exchange A to exchange B, but instead use DOGE for this!! DOGE has been pretty stable the last few weeks and transferring them is very fast.

Yup, doge is definitely one option. Also, I know some people exchanging BTC to Chinese Yuan, then using Yuan to buy some other coin and selling that coin on another exchange. As I have stated, possibilities are endless.

Changing to Yuan?? What exchange is still able to offer that?  :D

Hello crazyivan. This is an interesting thread. I was wondering to what extent have you been able to automate your trading. What some people may forget is that a $5 opportunity may not be worth your manual efforts but can be gold if you can automate most if not all of the process.

You can´t beat buy and hold in the long run with that.

Thats my opinion at least.  ;)

Well, there are several bots in the market, people use them and they can work. Especially when the price is volatile but still revolves around a quite stable anchor. What I mean by that is that the price moves between 430-450 for weeks so setting your bot to take advantage of these mild price swings can be profitable. If intend only to focus on BTC to fiat arbitrage opportunities, you need to have a lot of liquidity. That is why I do not do that anymore but I use these traders from my signature.

I mainly do alts to alts arbitrage, much easier to transfer coins from one exchange to another. Would not disclose my exact tactics since markets can be easily saturated but this definitely works.

However, arbitrage trading takes a lot of skill and even more time to follow the markets. For example, while I was browsing through forums today, Sunday, I read a piece of info about Darkcoin article being published into Wires magazine this week. This might have a positive effect on price so I bought some Darkcoins which I intend to sell if the price goes up. Let us see whether this was a decent arbitrage decision.

One final piece of advice, USE YOUR HEAD and never be too greedy. Invest smaller amounts and increase them gradually.

One coin that works well between 2 reputable exchanges is BlackCoin.
Why i do it with BC/BTC ? Normally there's a nice spread between Mintpal and Cryptsy. So, buy on BC on Mintpal, sell on Cryptsy for BTC.
Cause its one of the fastest confirmation coins, takes very little time to come to my wallet. Even faster, on your withdraw wallet on Mintpay, add your receive wallet for Cryptsy. Do the reverse to transfer the BTC from Crypty to Mintpal.

Some days, there's no opportunities, some others there is, like everything else that is subject to the laws of demand/supply.
With a decent volume, you can make a few thousand satoshis. Then if you want cash, use a regular exchange, Kraken, etc.

Regarding arbitrage with fiat its more complicated, still buying BTC on BTC-e and selling on Kraken is very very rewarding as the spreads are ridiculous.
But i believe altcoins are altcoins, so I would never exchange fiat for altcoins. In my opinion arbitrage with crypto should be done entirely with crypto.
Also the fees of Mintpal and Cryptsy are quite "eatable".

Again, due to volatility, never spend "money" you can't afford to lose.

Sorry but bitcoin-trader.biz is a HYIP. Look at the % return its a basic ponzi, they even use shadowscripts. They don't arbitrage at all, just pay you with new money coming in. It is common in the HYIP community to claim they make their money with arbitrage.

Its funny all this hype from ponzi scheme arbitrage advertisers. I have the hard data of millisecond by millisecond arbitrage opportunities from 6 major exchanges on which my bots operate.

Simply anyone who says they do profitable arb by hand is a liar, or cannot count for exchange default risk or payment service provider risks. No human can compete with my bots acting within 20 milliseconds by searching for thousands of arbitrage routes using 10 different IP addresses to gather the fastest data that beats public services like Bitcoinwisdom by seconds.

All I can say is that after bank transaction costs and currency exchange costs last month used to be 1.5% daily risk adjusted return on the whole capital, but this month so far is pretty shit 0.5%. So guys who claim 1%+ per day for this month by hand are pathetic liars.

I repeat, do not consider arbitrage as BTC to fiat trade only. This is only maybe 5% of my current trading activities. With BTC to alts and alts to alts, costs are minimal and turnover time is just a couple of minutes. Regarding Bitcoin trader, well, I am about to reach full ROI in less then 2 months, I ll let you know how it went.

BTC arbitrage opportunities are still present, however, I have noticed the market is slowing down, I find less and less dept and less BTC being traded in general. I hope people just hold waiting for better price these days since we have been having this decline and stagnation for almost 5 months.

Today 4% difference between Bitstamp and BTCe prices at one point. WTF is going on, why is BTCe price so low.

"1% a day"
for any investment  ;D

if that promise alone does not ring all (really all) alarm bells in your head, you are on the road to get fucked over pretty hard.

thanks.
but no thanks.

I prefer to trade myself.
I only have to trust the person in the mirror and I get to keep all the profits (excluding taxes).

So you do believe in trading/arbitrage? I thought u just played safe.

I'm going to have to call bullshit here, unless you were located in the same data centers as the exchanges and were bypassing their CDNs, or were simply flooding them with requests and managing to evade the throttling features of their CDNs, you're not going to have this data.


Which indicates you're not colo'ed with the exchanges and bypassing their CDNs, and you certainly dont have enough IPs to bypass the CDN throttling, while still maintaining the Nyquist rate.


The latency on your bot is going to be a lot more than 20ms given the above and other factors. And if your claims were true then the spreads between the exchanges would be a lot tighter than they are now. Just looking at BTC-e and Bitstamp, the spread between the two is $7.

So please, tell me what exchanges your bot operates on so I can further prove you wrong.

Well, trading Darkcoin has been very profitable lately, the price swings 30-40% per day, buying low and selling high has been quite fun recently.

BTC going up, lots of trading opportunities.

burn in hell scammer.

I am just an affiliate, not a scammer. Did you make a new account only to slander me?

Ivan plz go. I already proved how you're a obvious shill here:
https://bitcointalk.org/index.php?topic=621328.msg6899521#msg6899521

Hmm someone who knows his stuff, I like it!

I do not need to prove you wrong I have the hard fact that 95% of my trades do happen at the prices I get with the above methods. And these are outlier prices on which everyone else bot/human jumps as well. Q.E.D

I do understand that eventually my latency is much bigger than 20ms, but it is outside of the factors that I can control. Most of my scraper servers do tend to be close to exchange data centers. I get eg. 5 ping to Bitstamp I can tell you where they are in private if you want to know.

I do understand that there may be prices in books that the public including me do not see. That is the category cheating on the side of exchanges, but it happens on "respected" exchanges like NASDAQ too. I hate insider HFT bullshit too. The no real market "competition" system we live under, that costs us a lot of GDP growth in the end.

On the other hand you are not that good in economics are you. 7 dollar spread does not prove anything. When I talk about profits it is the risk adjusted daily equivalent. To have arbitrage as a business model not as a gambling model, you need much more than 7 dollar spread. I catch spikes and the premise of my post was just that that no human can compete with me in that like crazyivan... I think we can agree on that.

Bitstamp uses the Incapsula CDN which would probably explain your low ping times. Their DNS A records for bitstamp.net point to 149.126.72.187 and 149.126.77.187, which ARIN says are allocated to RIPE, and RIPE says they are assigned to Incapsula. Their CNAME for www also forwards to a Incapsula server. And I know from first hand experience that Incapsula will throttle connections if the bot is aggressive enough, and that they refuse to work bot developers to have their applications appropriately classified. Also interestingly although they try to imply they are an American company with the only address listed on their site being in San Francisco, all of their techs I spoke with are actually off-shored to Israel.

If you managed to find Bitstamps actual IPs which are behind the Incapsula CDN, I would be very much interested in knowing them, so feel free to send me a PM if you have them.

With that said, with Bitstamp you dont need to poll their API to maintain a copy of the order book, since they have a pusher API service for this. But other exchanges like Cryptsy (which also uses Incapsula) only offer push data for trades, not for the order book.

Rather than this being something the exchange is doing, I would probably place the blame with dark pool like services such as BTX Trader and other bots.

Well that all depends on your risk models.

Well it all depends on the type of arbitrage you're engaging in. If you're referring to inter-exchange intra-market, then yes I think a human technically could, depending on a variety of other factors which for obvious reasons wouldn't be appropriate to talk about here, especially if your risk models are as conservative as you imply they are in the previous quote.

And regarding crazyivan, I would probably have to agree with you, and that bitcoin-trader.biz link in his signature which advertises a arbitrage hedge fund reeks of being a Ponzi scheme.

So do not use the link if you do not like it, no problem with that. But you cannot tell me you have not tried any form of arbitrage so far, If it works in bunch of other markets, I really see no reason why it would not work in an extremely volatile market such as crypto.

I read the word arbitrage on this forum and guess who is around again... ;)

      I had made some profits from arbitrage but not with btc/usd but with btc/alts. In simple words it's not worth it with btc/usd because the fees, the transfers between banks and exchanges will eat your profits. Not to say that you have to have both btc and fiat on multiple exchanges if you want your arbitrage to work. With alts it's easier but you have risks there too. If you want to trade lots of them... well, it may not work because the time until you buy from one exchange, transfer to another and sell it's not instantaneous and the price can change very fast.
     What I have done: I observed the market for one alt on more exchanges, bought when I thought it was a good price, transfered on other exchange and after that awaited for the price to change and the made the arbitrage on both exchanges simultaneous. I have made some profit but not something serious. I stoped right on time and widraw all my funds just right before one exchange "freezed" all accounts.
     My conclusion: It's not worth it if you don't use some automated system like bots. The risk is very high, you can loose it all due to counterparty risk (ex: exchanges disapear or "freezing" accounts). You may end up some profits but be prepared to loose all your investment. NEVER INVEST MORE THAN YOU4RE PREPARED TO LOOSE!

just out of curiosity. which exchange froze all accounts?

VIRCUREX

Total balances after the amounts have been distributed
BTC: 346 accounts with frozen amounts, total 1720 BTC
FTC: 42 accounts with frozen amounts, total 152,075 FTC
LTC: 2432 accounts with frozen amounts, total 124,917 LTC
TRC: 77 accounts with frozen amounts, total 127,746 TRC

Update
We will regularly publish updates here on the number of accounts affected

All in all a bit over 90,000 registered users and accounts. Due to the above freeze and the subsequent distribution of the available funds, a large number of accounts have been restored to their rightfull account balance, some unfortunately remain frozen for the time being and will over time be released as and when funds become available. Here the number of accounts with frozen balances:

As of 25. March 2014:
BTC: 355 accounts
FTC: 42 accounts
LTC: 2,563 accounts
TRC: 77 accounts

When you say low fees, which exchanges do you prefer, could you please list a few?

Even if you have low fees, you still have the issue of having to wait for 3 or 6 confirmations to have your funds available at the other exchange and risk the price moving against you in that time.

I would say if people are willing to do this work and for the lower money in it, and it makes their lives better, go ahead and do it,

To me this process is as important to the bitcoin and altcoin culture as bees are to plants, when they cross pollinate them to make seeds and such, The act the traders here are doing is a way of bringing balance to an unbalanced system and networking the economic ecology of the crypto world since with out it the trading sites would be in a vacuum and that would become damaging to the use of it for store and use of it as a medium of wealth to stimulate production and growth :)

that being said, I find it more lucrative to spend my time while waiting for the market to swing, working on other things, and just make money off buying and selling on one major location that will be able to handle the larger volumes of coins when I have them, until then I am set, at that point you will see me cashing out my excess coins that I can not trade with because the market can not absorb them, for real world stuff, so if you have something like scrap copper and other resources used in industry, keep me in mind, as I would love to use my crypto directly and avoid using the REAL scam of FIAT currencies made by central banks who back it with NOTHING, and create an excessive amount of friction in transactions, unlike crypto :)

What you are saying is that you do not like arbitrage but instead sell at $650 and then wait till it goes down to $600 to sell, for example. But this is even more risky then actual arbitrage cause with arbitrage there are at least several exchanges to chose from. These large market swings usually go the same direction on each of these larger exchanges so if you do not guess the direction of the swing, you can kiss your BTC goodbye. Unless you are prepared to wait for months and hope things get back to desired levels again.

I said something nice and you had to crap on me, so here, have some sarcasm

I guess you are right! Gosh I have been so stupid, I missed selling on some really good spikes and only doubled my money recently instead of getting 5x or even 10x as much by now, I must be a total idiot!!!

lol I told you it was going to be sarcastic, By the way for the record, the more confident I get and stop messing about only working with 10 to 20% of my funds and just bull on in, the faster I have been doubling my money, so... yeah,

And additionally I will not lie, what I started with last year I lost quite a bit of and had to recover from, while I was learning but I have never put more money into the market, everything I have now is due to speculative trades to keep adding to my crypto portfolio portion of my funds.

Crazyivan, you are doing nothing but wasting your time.


Whether Arbitrage is profitable or not. Nobody will tell you their method.


Why? Use your damn brain?

WHy would they want you to steal their arbitrage opportunites?

Why should I teach you my method and have you put a bid or ask one satoshi difference from mine and you get a fill and I don't. You make a profit and I don't. Why in the world should I teach you that.

Only person that would teach you that, is if he got something in return such as subscribing to your scam site.



Only way to make money in Bitcoin in the short term is by trading it. Mining is not profitable and neither is buying 1 BTC and hoping and praying to the Gods that it goes to $100,000 one day.

lol exactly, that is like teaching someone how to do something that you are doing and then having them do the same thing and compete against you since there is no limit on how much you could be doing here, so there is no way to be sure that there will be enough market to spread around to everyone, instead whales will come and gobble up all the profits and leave NOTHING for anyone else lol. its not like making a part that is hard to make and there is a ton of demand for it, so there is plenty of room to grow into that will never be filled totally, unlike that part, doing transactions of larger size takes NO ADDITIONAL physical effort other than a few different key strokes, lol

I have engaged in alot of arbitrage over the years, though I must say that in BTC and LTC at this point, there is little spread, even with the most advanced bots (i don't think there are really such fast HFT bots in this space yet), you still cannot make money on a non-existent spread.

Wrong!! Why? Cause not everyone is a greedy ass like you might be and some people might actually discuss their options as some of us already did in this thread. I am not asking anyone to teach me the exact method, I am interested in general strategies how people do arbitrage. I have been in Bitcoin for a couple of years, been investing into arbitrage, securities, cloud mining and mine by myself. In other words, I could probably share some of interesting strategies with most of people here and this is what I ll do. Recently, I have been quite successful in playing with Darkcoin, the price moves +/-5% almost every day for the last couple weeks. Basically, the easiest arbitrage opportunity there is. So go saturate it now. As you can see, this is a free advice, no catch, no angle, just something I like to share with other people cause I am a nice person.

Enjoy :)

HFT programs seek to take advantage of spreads in pennies or less. The spreads between exchanges are much higher then that. HFT along with other traders still face the issue of moving funds between exchanges

Can't move large sum of money between exchanges without getting attention from your bank and your government.

Exactly. HFT on stock exchanges do not need to worry about moving money from exchange to exchange as all trades are settled via their bank account AFAIK

That is interesting, I have never thought of attempting arbitrage between altcoins.

Out of curiosity how much BTC were you able to get out of this?

There are always these kind of opportunities. People who say it is not possible are just to lazy to follow the market closely. I ve mentioned DRK, for about a week, Darkcoin was fluctuation +/-5% per day on a SINGLE exchange. All I needed to do was to purchase in the morning at -5% and sell in the evening at +5%. Similar case was with Kittehcoin about a month ago, the price was constantly hovering between 0.00000001 and 0.00000002 BTC. I was buying at lower price and selling at higher price, was able to do this 6 times and make 600%. Arbitrage is there and it is possible, just takes a lot of effort to make money by playing it. 

That's not arbitrage. Arbitrage is supposed to be risk free.  Easy to say that you are getting higher returns if you say you do arbitrage but in reality you are just speculating / day trading.  It's not arbitrage if a price movement before you close your position affects the profit.  

edit: Risk free is strong word there.  Clarity: Arbitrage should not be exposed to price movements.  Of course there are other risks like credit risk of the exchange etc.

No true, there is always risk in trading. Also, by definition, crypto arbitrage is taking advantage of price difference between coins on different or the same exchange.

You should have zero risk when executing an arbitrage properly

You cannot have zero risk. Even when you have funds to purchase at one exchange and coins to sell on the other exchange at the same time, there is always possibility of the price or quantity changing while you perform your transactions. There are bots on the market which can speed up the entire process but even these bots can make mistakes. There is always risk when dealing with BTC.

I agree you cannot have zero risk.  You are always left to some extent with the risk of the exchange(s) going down, some execution risk etc. 

But the key thing you should not have in arbitrage is exposure to the price of the underlying asset.  What you call arbitrage above is not arbitrage because you are just betting that the price will follow some pattern.  Buying when it's down in the morning and selling in the afternoon is not arbitrage.

I disagree but it does not matter. LTC has been going down big time, however, not all exchanges follow this trend the same way. I was able to catch a few arbitrage opportunities due to this.

True arbitrage would usually involve exchanges that for all intensive purposes are not going to fail. You should never have execution risk, as this risk is essentially that you cannot execute your trades quickly enough to capture your profit and if you have this kind of risk then you are doing something wrong. 

I think very difficult to make arbitrage in trade BTC  :-*

Recently it has. Most of people are expecting BTC price to go up and have chosen long position, consequently, volumes are quite low. Hope this is going to change soon.

This Urocoins s nice for arbitrage, lots of price discrepancies on different exchanges ATM.

I tried to arbitrage a few coins recently for the first time.  I remember when there was a good difference in price last year and people were making good coin arbitraging.  I really didn't make much profit but I was able to learn if the effort is worth it.  I think it is if you do the math and make a plan before hand especially if it is your first time. 

To those that don't see the need to share how to arbitrage I just want to say they are not going to be able to make every trade all the time..  There is no reason why we all can't share info so other people are able to make money at some point.  People have come here to to share information, remember?

The basic problem with Bitcoin arbitrage is that you need at least two non-flaky exchanges.  Ones where, when you tell them to wire transfer money out, they do so, immediately, every time.

Could not agree more. The same things goes for banks.

In this time, with a simple movement between two or three exchange, your gain not beat the 2%  :-[

Where there is easy profit, it will be exploit to the full extend by traders.

You also need exchanges that can/will transfer bitcoin out right away and exchanges that will accept bitcoin deposits with as few confirmations as possible.

Thi is interesting. Is there any table comparing exchanges by these two factors, especially number of confirmations they require?

Yeah i would like to see an exchange that accept deposits with like 2 confirmations, we can talk in amounts lower than 5 bitcoins, i mean is it necessary to wait 3 confirmations?

6 confirmation is considered very safe for a transaction. Lesser number of confirmation depend on the hash rate distribution of the mining pools.

arbitrage is something you do, not invest in.

why?
well because as soon as you factor in the current risk factors in the btc world you may consider yourself lucky or rich beforehand if you make any relevant profit from it.

If you simply ignore the possibility of exchanges unexpectedly going temporarily or permanently offline the math does work in times of higher volatility than we currently have.
Right now trading volume on usd and euro accessible exchanges is simply too low to make enough to pay employees and yourself with only the fees you can charge for using someone elses money for arbitrage.

Because in principle if people invest in you arbitraging with their funds is nothing more than a credit you take at an insane return-rate.

super short: money does not grow on trees.

Waiting for this thing to blow up anytime soon.

That may be true for hi-lo extremes, but there is only so much volume you can squeeze through the exchanges at anything even close to these rates. 
As every arbitrage trade couple is bound to cause a price correction the "wiggle-room" for arbitrageurs decreases with every arbitrage trade. You can adress these issues with certain trading patterns (e.g.: iceberg or hidden trades) and delay those effects but you can not stop the prices to be pulled towards another by your trading all together.

This has a direct influence on the maximum volume which can be realised in arbitrage trades, or in other words:
it puts a hard limit on the scalability.

While a few can make relevant profits on arbitrage, the profit decreases with increasing volume at work.

That is why I don´t see arbitrage as an investement vehicle to be sustainable in any way. It does not make any economic sense.
Unless you play it very risky and use 2 or more exchanges allowing you to trade on leverage and use your customers funds as security.
That is bound to blow up in your face sooner or later.

Getting either Bitcoins or money into Bitcoin exchanges is not the problem. Trouble is always on the withdrawal side. Bitcoin confirmations take, at worst, hours. Withdrawals can take from days to forever.

So dont use Bitcoin, trade some other faster coin, this ll take care BTC confirmation part. Also, do not trade crypto to fiat but crypo to crypto and cash out only when u are done with trading. This should speed up the
process even more.

Any alt coin is going to much much less secure then bitcoin so when you send it you will have an even greater chance that the TX will be reversed.

Don`t get this comment, would you pls clarify.

2 years ago or so when btc was sub 10 dollars, arbitrage was da bomb. I made a killing doing this. (too bad I cashed out most of my coins before da boom) now, the risk is too high and the swings aren't as big as they used to be. today a  5 percent swing is huge, back then, a 30 percent swing was all in days work...ahh the good ole days..

I still think liquidity is the main problem. Price volatility is still there, there are days with 3-4% or more difference between exchanges. Getting sufficient liquidity while maintain those prices is a real challenge.

I think there are a few arbitrage bots available. I think I saw some offered even on this forum. All you need is to find 2 or more exchanges with a price difference and to adjust the bot to them.

Just remember if you are going to try doing arbitrage to start with small amounts for a while so you can see all the downfalls without losing much money.

Hey guys, we invite you to test arbitrage on our trading platform. As far as we one of the few services that let people purchase bitcoins & litecoins with a credit card, we have rather more buyers than sellers. Thats why our price is usually higher than on the major exchanges ;)
After you sell cryptocurrency, you can withdraw money to Okpay.
https://indacoin.com/trade

Yeah, high fees of CCs don't go well with the concept of arbitrage. Just saying.

obviously our post was regarding selling bitcoins through the exchange and to deposit bitcoins you dont pay anything

This doesn't make any sense. Most sites that sell bitcoin via a Credit Card actually sell bitcoin and are not actually an exchange. The difference in the exchange rate is profit for the site in exchange for taking the risk of credit card fraud.

Yes & No - we got 2 services
1) an exchanger, where people usually buy bitcoins with a credit card and pay high fees https://indacoin.com/change
2) a trading platform, where people can exchange bitcoins & litecoins with each other https://indacoin.com/trade
And the exchanger is connected with the trading platform. So when our clients buy bitcoins through exchanger, in fact they execute a buy order on our trading platform. And as far as customers who use exchanger don't care much about the price, people who sell bitcoins & litecoins through our trading platform, got good profit

How old is your service and how many clients have you had so far?

The company was founded in 2013 - we launched beta a few months ago and now we are fixing bugs of the new site version. We hope to announce it next week - we ve already launched more friendly design, okpay withdrawals and are testing margin trading, that will be also available next week.

Margin trading might be interesting, however you need to have large base of users in order to achieve attractive interest rates.

....and it can seriously decrease BTC price as we ve seen during this last BTC crash.

seems like someone arbitraged the heck out of indacoin

$30 spread between Bitstamps and BTCe. OMG.

hey there - we ve decreased OKpay withdrawal fee to 1%  :)
https://bitcointalk.org/index.php?topic=746071.0

I think arbitrage is generally profitable if you choose your moment right.

It s all about the difference in price in liquidity. I really wish I have the time to follow Chinese exchanges, lots of potential there.

Wouldn't it be extremely risky to have large amounts of money in exchanges that could get shut down at any moment such as huobi?

Sure, ask yourself this question: is it extremely risky having large amount of money into something intangible and unregulated as Bitcoin? It can simply disappear tomorrow and nobody would be able to anything about it.

This website show all possible BTC/USD  Arbitrage possibilities in real time - http://www.cryptocoincharts.info/#jump-btc-usd

Efficient arbitrage becomes possible when you are able to maintain sufficient levels of cryptos/FIATs on as many exchanges as possible. Also automation plays an important role, meaning the possibilities to integrate with a given exchange via API.

Last but not the least is the availability of various deposit/withdraw methods for your FIATs and also the time which an exchange requires to process your deposits/withdrawals. It's crucial for moving your funds between exchanges.

Regards
Edward

I can't find what do you mean, where do you read the arbitrage opportunities? Can you give an example?

I am interested in this, but can you tell me when is the right time to sell it ?
I just don't know how to decide it!

As soon as you find it profitable. It is as simple as that  ;)

I looked into arbitrage a few years ago but found it to be nice as a concept but doing it in reality has so many drawbacks,price change,time of transfer,fees etc

In the end i went a different way and found something profitable to the tune of about 2-2.5% per sat move against altcoin btc pair per trade.I tried telling ppl about it as i was looking to sell it but at that time noone actually beleived it was possible mathematicly so i was stuck with it.Poor me

Arbing just wasnt for me,not in crypto anyways

What do you mean by this exactly? Moving bitcoin to altcoins in order to make a profit essentially?

Yes. All of the largest exchanges in the world have historically always stolen coins from customers or been hacked.

What i meant is i found a way no matter what way the price moves you have to profit,,,but everyone ive spoke to about it seems to think im a fecking crackpot and this cannot exist.

Are you claiming to have a trading method that can always profit, no matter how much or which direction it moves in? If that is correct, I can understand why people would be skeptical of buying this method from you.

Exactly sir, ppl just wont beleive it sadly

People won't believe it because it doesn't make sense. You are essentially saying that you have a risk-free (sans exchange theft) method of trading to generate guaranteed profit that isn't arbitrage.

Yes, its an interesting approach and i can understand how untill this point it hasnt been found as it is an odd method but working nonetheless.

I actually found while looking for something else (zeroing out bad trades) i sometimes say i stumbled upon it by accident but thats not strictly the case but i did notice it in an odd way and its worked beautifly ever since.

I dont have a lot of money to use it myself but it is building by the day thanks to the beauty of compounding.

I did try and sell it and was offered a few thousand bitcoins by various ppl but i never sold out in the end as i just got the feeling there was something dodgy about most of these characters and they seemed to be in quite a rush to obtain the method,so i declined

Please don't get arbtrage confused with these 'guarenteed get rich' quick schemes. You don't always make money no matter which way the price moves, it has nothing to do with the direction of price movement.

about the present price, anyone have a idea?

btceUSD is lowest and lakeUSD is highest, http://bitcoincharts.com/markets/currency/USD.html

this is @Mieehayii 's idea: https://bitcointalk.org/index.php?topic=770156.0

You and others thought these two pairs are the lowest and highest combination but only within bitcoinchart peers. You may see opinions for this combination in this thread. https://bitcointalk.org/index.php?topic=765074

My opinion is not profitable as far as you'd like to keep currency (USD and BTC) balance.

Think carefully, keep your vision wide and good luck.  ;)


Now I understand why people say lakeBTC provides the best price.. I think bitcoincharts is not 100% trustworthy nor timely in terms of coverage and reliability even though I used to like it.

I can assure you im Not confusing it.My method is something i put together myself and im fully aware how arbitrage works.

Im just one of those weirdos who enjoys mathematics

So you do not sell, you do not promote it, you just talk about it?

It must be really good if he turned down "a few thousand bitcoins" for the method. ::)

Im just hanging back ,,,speaking to a few ppl about it and getting an overall valuation of what ppl think its worth before i decide if i sell it etc.

Theres no way it can disappear or be patched or anything like that as it not a hack or cheat.So no rush

In my mind the few thousand bitcoin was the low offer kind of like when u buy a car ,,, you go in with the shit offer first

So you are basically a millionaire. Nice. :))

Millionaire,,,christ no lol,,,wish i was ,, i just know i have something here worth something to the right person.Im using it myself to grow the little btc and doge i have at the moment ,,most of my coins are made up of things i "hope to feck" will rise in the future.

I bought 120k of doge in the 150,s so bitta holding to do yet lol

With arbitrage, you should always make money on each of your trades. If you do not then you are doing something wrong (likely holding onto your bitcoin position for too long).

What could prevent you from profiting is the lack of trading opportunities.

What's the spread right now?

What's the market depth?

What are the deposit and withdraw times (and conversion times if necessary)?

What are the trade fees and withdraw/deposit fees?

After considering all of the above, is it still potentially profitable enough to try?

Lastly consider - WHY - why is there such a spread?

Spread can work in your advantage, there are two rules to achieve that:
- never buy/sell with market order, always with limit order
- never arbitrage in the downtrend of the currency you are exposing yourself to, this way you gain time to wait for the limit order to complete

+1

It should be foolproof, at least in theory. Regarding opportunities, with new exchanges popping out every day, there is always something to trade. I cannot find lots of depth, but there are always opportunities.

Anyway have you try arbitrage in Bitcoin.co.id ? Currently there is almost $30 price different with btc-e.

Our Indonesia exchange has alot of buyer compare with seller that cause our price slightly higher than other exchange

This seems 2 complicated, price are in your local currency.

You should not necessarily be trusting new exchanges like this. You will always have the chance that an exchange is going to run away with customer money (this is especially a threat with newer exchanges that have little reputation because they have a lesser steady flow of income from trading fees)

I ve decided to stop trading by myself, will just use BT and invest into cloud mining. Have no time to follow the market anymore.

What is BT?

Company from his signature. Potentially a HYIP, maybe not. They pay well and they pay for about a year.

kinda interested in what you are talking about, but I prefer figuring things out for myself lol, my current trading processed even explained to my friends was not enough, they see via skype screen sharing and what not that it works but they still would rather badger me with enticing offers to do the trading for them, which one finally did mostly because I am more confident now, and not because they wore me down or offered me something I could not refuse, as for if it is working, I say don't sell it just use it, and prove what you are earning to people, put a business model together and sell your services to make them profit and collect a bit on the side from this profit :)

I am trading as I said for a friend and our agreement is that the profit from trades I take half of, and always make sure the principal is left behind too, as well as his profit. if he leaves his profit in, I increase the "principal" by that amount, so 200K coins makes 40K profit, I take my 20K *50% of 40K* and if he leaves the other 20K then his principal is now 220K coins. which means I can make even more if I can trade it all to make a profit for example using the previous trade it would not be a 40k profit but a 44k profit, so we each would make an additional 2k profit on top of our 20k :) mind you we are pretty good friends and have worked on a number of things together so our agreement is a gentleman's agreement, so anyone else I did this with we would have to have signed and notarized paperwork that we both agree to before I started working that sort of a plan with them, and my system basically uses statistic analysis and psychological analysis to understand why things happen, so I know when I can solidly expect trading trends to make money, thus it does not take into account variables I can not anticipate yet, as I have not encountered them before, and those effects that just can not be anticipated, lol. but I still always end up with a profit at some point :)

I did eventually get a contact through a friend so now i have to go through getting a patent for this strategy and itll be presented to a hedge fund manager once the patent is in place.Right now im currently writing the presentation detail the hows and whys of how this works so fingers crossed it comes good.

They feel it has scope in currency markets as the crypto market trading pair style is very similar to forex.

Oh now I know ;D

a patent on a trading strategy. made my day :D

It's quite profitable one year ago. Right now, it's much more difficult. If you like, you can try volatility arbitrage by trading options. https://coinut.com/

i actually checked that out. but their minimum withdraw of 319.917 eur (25,000 Rp) seemed a bit high

Big price discrepancy usually due to some fundamental reasons such as the difficulty of withdrawals, and it's not always profitable with the discrepancy.

Ill think of you when im on a beach somewhere.

Just out of morbid curiosity why couldnt you patent a strategy.I know nothing about the process itself but this thing HAS to be patented before its sale.

Otherwise i may as well just give it away (which i wont)

That's right, trading is the fastest way to make money in bitcoin, any guy with a lot of money would be able to create a smart bot to spread his sellings and therefore make even more money

is there a website that show the best arbitrage in live ?

also what are the crypto where there is often arbitrage ? and wich one can transfer fast like ethereum

Fast transfers are much less important then fast confirmations. There are coins that transfer instantly but need 20+ confirmations, and finally are not much faster for arbitrage use then Litecoin. Exchanges don't care if your coins are transferred to them until the transaction is confirmed.

IMO doing arb in this bloodbath situation is a bad idea. As prices are dropping rapidly you may end up making a loss. That's just my opinion. I've never tried it but recently got interested in it and still spending time learning pros/cons and risks. and still looking for reliable exchanges.

There is no sin for people who lack of knowledges but actually there is a sin for people who is super lazy to research stuffs before asking these stupid questions.
Every answer for your question can be easily found out in this forum or on the internet also, just spend little time to read about it before asking, thank you.

Bitcoin is such a wonderful blessing to all of us and I think we should embrace that because it is the one who provides a huge amount of return on our capital.
Bitcoin helps all people to become successful in future.

experience dictates your profit in the industry,  that is the relationship of experience in the profitability of the investment. Many people become successful through meaningful experience that they have been through.

I used to arbitrage trading with some smaller coins . My biggest issue was trading volume and confirmation time.
You have to be quick and calculating fast as You have to close Your trades at the same time with profit.
I have recently found in the WP of a new project HQ some interesting staff about arbitrage trading with bots.

This is why everyone is after experience. We cannot deny the importance of experience in any field. Even if we go for job for real life, they always prefer those who have most experience in the regarding field. Crypto again is the matter of experience. Issue is that we should learn from them and try not make mistakes that they have made. Learn from them and to gain your own experience, try trading with little amount.