Bitcoin Forum

I am looking to buy BitCoins. When I was doing a little research on trading websites, I found something interesting, yet strange.

Some of you are familiar with the term arbitrage. For those who don't, arbitrage means "the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset." Which basically means making money out of nothing. And in the world of finance and economics, arbitrage doesn't exist because the prices reach to a point of equilibrium.

Anyway, price of BTC on MtGox is $212, and on BTC-e it is $203. Now what stops me from buying BTC from BTC-e and sell them on MtGox?? Thus making a profit of $9 for every BTC.
I am sure something is weird here and this doesn't work for some reason because everyone would be doing so. Can someone who knows about trading in these sites explain to me how the process work? and how come they have different prices of BTC? and if I can't use this arbitrage opportunity, what would be the reason?

Thank you

You will end up stucked your funds in gox. There are lots of threads about that issue. check mtgox' withdrawal procedure there: https://support.mtgox.com/entries/21649594-Withdrawals-and-Deposits

most recent thread: https://bitcointalk.org/index.php?topic=179586 (https://bitcointalk.org/index.php?topic=179586)

so is it true that Gox doesnt allow USD withdrawal to anyone, anywhere on the planet? or just to USA customers?  Seems like they should be able to transact USD with say, someone in Belgium...

where the heck you got such BS from?

Gox withdrawals work well in some places, not in others.

Regarding arbitrage, in any case you will have fees.  This will limit what you can do profitably, even if your funds flow is working properly.  Trade fees on both exchanges and multiple fiat wire fees will keep the gap from closing completely.  That said, opportunities do appear sometimes if you keep an eye out.

Yeah everyone realised this as soon as price discrepancies began appearing. But think to yourself, if it did work, why isn't everyone doing it?

Not arbitrage, its 100% loss.... look up the forum and you understand more about MtGox and why the price is higher....

I wrote about it here
http://afbitcoins.wordpress.com/2013/10/01/mtgox-price/

btcchina prices have been at a 5% premium to bitstamp for a while now, at the 6.1 usdcny fx rate. 

arbitrage is very very good to me.

but i would remind anyone thinking of competing with me that the efficient market theory dictates that arbitrage doesn't exist.

I did a test, with 1 BTC. I sold it on MtGox (I think for like ~100 USD), and had it waiting in a transfer queue in MtGox for over 3 months, waiting on their bank to complete the wire transfer. In late October, I finally asked them to cancel the USD wire transfer and convert it back to BTC, so I could use my BTC somewhere else.

This is a great idea but there's no way to get USD out of MtGox without growing old. Your money can work better for you elsewhere.

But if you try buying in btce and selling in via mtgox, and for this transaction you could reach a 10% of gain.
After this you will wait 1 month aprox to recieve the money, you could obtain 10% per month I think it`s very good.
Do anybody knows approximadly the estimated time until the money is in the bank?? 1 month 2 months??

This has been discussed quite a bit before.

BTC-E has always had lower prices, because it's hard to get money in. Gox has, for the past couple of months, had high prices because it's hard to get money out.

Everyone has a different experience. If you think whatever % you can get sounds good, even if it takes a few months to get your money, then go for it. Of course the price of bitcoins might double in that time, and then you would have been better off just waiting and selling back to wherever you bought them.

Yes, I've learn't my lesson, requested withdrawal from Mtgox in July (when bitcoins were just over $100, finally gave up, requested they refund so I can exchange it back into bitcoins again, only thing is it took them 4 days to process my request, during which bitcoins went from $200 to over $300. Arbitrage, in Mtgox is the stupidest idea ever if you're outside of Japan.

Arbitrage opportunity for CNY is better, as I'm currently conducting AUD -> BTC -> CNY arbitrage via our managed fund (http://bitcoinsreserve.com/)

And am looking for partner to conduct USD -> BTC -> CNY.

PM me if you are trading in USD and have a bitstamp/btc-e account and wish to explore this further.

How do you get CNY out of China?

Yup, you can do it on btc-e and bitstamp but not MtGox... cause they have problem withdrawing...

Mtgox has problems withdrawing to you.  And by "you", I mean "most of us", to be sure, not just you proper.  There are many reports of people in Japan with accounts in Japanese banks that have no problem getting their money in and out.

Someone with accounts in Japan, Europe and the US, and access to forex in all three places could make a killing right now.  Hopefully someone with sufficient capital to set that up is working on it right now.  Wish it was me.

Optical illusion

Arb is a theoretical not a real possibility

It is possible, just not in this case cause its the merchant problem...

Arb is possible, especially when you have a 10% difference between CNY and USD.

Doing it now. and happy to show people how. :)

Peace.

Yes its possible to make a profit from it, but problems with withdrawing and the fees make it impossible for most people. If you can figure it out though, Im sure you could make a killing!  ;D

It is true whilst doing this with only a thousand dollars invested is barely profitable because international wires have such ridiculous fees (hence BTC FTW)

The flip side is that it becomes very profitable when you are bankrolling USD50k a day.

A word of warning, this has a different risk profile to speculating on Bitcoins, as Arbitrage has in all honesty not out performed Bitcoins insane increase in value over the past few weeks. But again, this is tailored to the segment of our investors that would rather want to see a steady 5% return per round trip on their Government backed currency (Australian Dollars / US dollars / Chinese Yuan) than speculating on the unpredictable fluctuations in the value of Bitcoins.

To keep our machine churning, we're always struggling to find enough bitcoins to buy at market rate with USD. If you think you can help. PM me.

People have being doing arbitrage for long.. but the problem is you have to be in Japan to do it cause MtGox's account got closed down and they don't have any more USD!!!

If you have a Japan bank you an do that....

This is not true from Europeans.

I pay 1% deposit fee (or 15€, whatever is more) by using a SEPA money transfer to them.
The last 2 times it took 2 days, this week it took 3 days.

I am very happy with them. But the € price is not so much better on BTC-E compared to MtGox than it's the case with $.

So BTC-e is hard to get money in, and MTGox is hard to get money out.. oh man...

Well for me a BTC-E wire deposit has taken more than 12 business days. Another problem people are facing with wire transfers to BTC-E is after they are funded and you trade their USD for BTC, they put a money hold (for about 30 days) on the BTC so you cant withdraw until they verify your uploaded documents (ID and utility bill). The problem is once you send the documents, their support team takes very long to respond. I hope they fix their support system to answer tickets quicker.

Oh that really sucks, any suggestion on a better trading website?