Bitcoin Forum

Face it, selling Bitcoin on MtGox is not truly getting USD, but getting MtGoxUsd, a complex derivative whose value is tied to the likelyhood of mtgox not fucking up.

If you are such a bear and want to sell Bitcoin, do yourself a favor and sell it on a real exchange. If MtGox really planned to pay back USD they would conduct arbitrage between their own market and all others (heck, they aren't even in US, so they can even get USD into BTC-E). And they aren't. Its pretty clear what that means.

Oh.
Look at your topic..
Sell Mtgox.

It seems that Mtgox is for sale.  :o

I'll start the bidding at $1

take it

Not really, you can opt to have the money transferred, problem is just verification has to be done.   ATM there is no escape from Mtgox as they are still by far the largest exchange, hopefully though we can see rapid growth among other exchanges to give a more balanced market.

It's funny people are complaining about free money from the arbitrage

Transfer $$$ to bitstamp to buy bitcoin

Transfer bitcoin to mtgox to sell for $$$.

A quick 6+% profit, after deducting the transaction fees from the two exchanges.

Sure, withdrawal delay with mtgox.  Let say, 3 months to cash the money back to your bank.

What's the big deal?   It's still an easy 6+% profit over 3 months.

Now, look at how much the bank pay you in saving interest per year?   

And now ask yourself the question, why is it not happening?

Or, to put it more straightforwardly, why are you not doing it?

Are you so naive to think that we list down all our investment activities on the forum?

Tips given.  Up to individual readers to perform their own risk analysis on how viable it is.   Don't expect to be spoonfed.

The reason that arbitrage like this 6% spread still exists without fluctuating much is because no one is capitalizing on it so as to close the gap, which then further maintains this arbitrage since MtGox's inability to payout prevents capitalists to risk the uncertainty of withdrawing GXD (Gox USD as a fellow member labeled it) into realized USD.

Except this won't work because Bitstamp accepts USD, not GXD.

No, Not necessarily.

Let me ask you a question. What would happen to the Bitstamp price if people dumped right now on Mt Gox and dropped the price by $10?

More likely than not, it would drop too, as Mt Gox still (albeit to a slightly lesser extent) influences the prices on other exchanges.

IMO the arbitrageurs that bought BTC on Bitstamp and sold on MtGox still  have most of their $ on MtGox.
If they would transfer the $ to Bitstamp they would be in limbo for about a month or more, and BTC could go up 20% in this time.
At some point the arbitrageurs run out of $ to buy on Bitstamp, just like the BTC buying whale probably runs out of $ on MtGox.

What if it drops by 20%? They would be able to buy much more for their money. Not saying that arbitrage is smart... but just reminding.

Of course, there is a rippling effect which affects other exchanges (BTC-E, Stamp, etc.) from the highest volume exchange. I never argued against that in the least. There must be a precedent in some sense set by the highest volume exchange for the price in order to justify prices on lower volume (respectively) exchanges.

How about it drops 20% then rises 40%, if one still had the $ on MtGox one could buy low and sell high, for a cool ~60% profit.
If I would miss such an opportunity, I would feel quite depressed for a while.

You're talking about day-trading, not particularly arbitraging.  ::)

People ARE doing it. In fact, I am doing it.

Here is the problem though. Back when mtgox took a week to process a bank transfer, you could transfer up $5 or $10k a day and have the money piplined so you'd only need a total bankrool of something like $50k to arbitrage $10k every day!

But now you will run out of money in a week and have to wait 2+ months to get your cash back.

Everyone who had the cash to arbitrage did arbitrage, but now they can't because all of their money is tied up waiting for mtgox to transfer their USD back to them!

I personally have $25k stuck up on MtGox I was using to arbitrage right now.

Since no one can effectively arbitrage, the price between mtgox and the other excahnges has been drifting.

SGExodus,

Tell us how you know for CERTAIN that the time-frame for someone to successfully withdraw their USD from MTGOX is "Let's say 3 months", as you espoused in your post?

He can't possibly know, and his entire post is based on the presumption that Gox will eventually paying out. That's not a certainty at this point.

People are not arbing because the 6% arbitrage return is not high enough to compensate for the risk to their principal.

I'll do it!

Of course, I can't be certain.    Any investment is about calculated risk and your own risk appetite.   

For illustration, let us start with a modest $10k capital.  This nett you 6% return from the simple arbitrage action, or $600.

Worst case scenario -- MTGOX shutdown and run.  -- Lost all your $10K capital.

Scenario 1 - MTGOX took 1 year to process the withdrawal, but you eventually get the money back -- 6% per annual return, not great, but still beats putting the money in the bank for saving interest.  You may also lost some opportunity cost along the way.

Scenario 2 - MTGOX took 3 months to process the withdrawal.    Assuming the arbitrage opportunity still exists, and you repeat the process 4 times.    24% per annual return -- this beats most other investment instrument out there.

Scenario 3 - MTGOX took 1 months or less to process the withdrawal.  Assuming the arbitrage opportunity still exists, and you repeat the process 12 times.    72% per annual return -- this is close to ponzi scheme type of return..

But it's your own money.   You should do your own risk assessment.

But exchange fees are 2 x 0.5% and wire transfer fee 2 x 2-3% => no reward

exactly.

SGExodus is clueless. if this were profitable, then people would already be doing it. and then if people were doing it, the markets would correct, and there would no longer be these arb opportunities.

You need to change bank if they charge you 2-3% for wire transfer..

It depends on how much you are wiring. My bank charges $30 for receiving an international bank wire transfer. Gox, by my estimate, is charging about $15-ish. Thats like $45 in fees. If you are 'only' wiring 2250, then this would be a 2% fee.

apparently you never played "musical chairs" as a kid

here ill give u a hint

counterparty risk, bitchez

Well if any of you are considerring the mt gox switcheroo
May I suggest cavirtex and mt gox cad
89 vs 105

Goddamn canadians.

guess someone read my post ..... cavirtex now 102 and mt gox cad 105

Completed the liquidation of my MtGox USD :)

Now I have safely moved any USD into BitFinex where it can earn interest, and moved all BTC into good 'ol paper wallets.

Using Cavirtex seems like a good idea for Americans living near the border. Just open up an account at a Canadian bank and you can withdraw from cavirtex pretty easily using email money transfers last time I checked. They probably a lot easier to deal with when withdrawing fiat by other means though you might have to check their site since I'm not pretty sure.


Edit: It seems that they only accept accounts from Canadian citizens. They should expand to the US market if they are able to do so.

With all the money mtgox has made recently I'm surprised they haven't solved their issues yet. They might be having some other problems behind the scenes.

How much daily arbitrage volume would be needed to level bitstamp <-> mtgox?