Bitcoin Forum

Anyone try their hand at performing some arbitrage with bitcoin? Any success?
(specifically between mtgox and cavirtex)

The spread between exchanges seems favorable at times (over the fee %)

Anyone know of an automated solution for the aforementioned exchanges?

Thanks in advance.

Cavirtex doesn't offer an API AFAIK.  Manual arbitrage IMHO is not worth the spread that you can earn. 

There are plenty of other exchanges with APIs that I am sure have tons of arb robots.  So arb can be done with BTC, but you will need a bot.  There are some PHP classes for interacting with exchanges such as MtGox and CampBX that are freely available to help you get started if you want to program one for yourself.  A profitable arb program no one will offer to you for free (or cheaply).

You might find this interesting: https://bitcointalk.org/index.php?topic=74291.msg981888#msg981888

From that thread (a bot project that sadly failed):


tl;dr: You'll need a way to shift fiat with banks quickly and low fees. 

That explains a lot. Intersango has consistently been selling BTC 2-3% cheaper than MTGox for weeks now. I guess it's not worth the hassle of arbitrage. Doesn't seem like there is a lot of volume on Intersango or any other exchange site besides MTGox.

Hard to do arbitrage on MtGox when it takes weeks to withdraw your USD.

Arbitrage depends on how quickly you can move funds around and what avenues you have to move them. Moving between exchanges that support MTGox codes help, as do other forums of payment like Paxum and OKpay but these services incur a charge. Having many accounts in many places helps alot :).

Paxum has boycotted bitcoin.

Exchanges that accept MtGox codes are shouldering some of the risk of MtGox's potential insolvency, almost definitely without any information, since they refuse to answer even the most basic questions. I prefer to deal with exchanges that don't accept MtGox codes.

One lesson coming out of that discussion of Goat's unsuccessful venture is the role of the exchanges themselves in conducting arbitrage.  They are obviously at an inherent advantage for at least part of an arbitrage triangle because they are not incurring the fees that another trader would.

There seemed to be some split in opinions about whether this activity was a negative thing (conflict of interest) or a positive thing (more liquidity, more inter-market sanity in the aggregate). 

Sounds like a plan.  When you sell at Gox, are you having issues with delays in withdrawing from Gox?

How deep is the common order book between two exchanges when this arbitrage presents itself?  Wouldn't this lead to Mt Gox coupons not being accepted by other exchanges that know they are out of line?

After some investigation, it appears moving USD between exchanges is the most difficult part of arbitrage. In building an arbitrage information system at cointhink.com, the cost of the trade as well as an estimated 1.5% transfer cost is included. The transfers are based on bitinstant's fees and the exchanges being watched currently (mtgox, bitstamp, btc-e) were chosen because they connect with bitinstant.

Arbitrage information based on the entire order book is available at

https://www.cointhink.com

which was built to provide a 'weather report' for arbitrage.

There are a number of gotchas to arbitrage in general. One subtle problem is that in order to trade fast, one must keep BTC and USD balances at different exchanges. By keeping any balance in BTC you're exposed to the USD/BTC price changes that arbitrage is intended to avoid!  Another gotcha is the profit potentials are small and bitinstant has significant limits on the dollar amount and frequency of balance movements.

Before cointhink, I didn't know what the arbitrage profit potential was - comparing the top bid/ask at different exchanges is almost useless. By comparing entire order books, offer by offer, to see what asks have profitable bids at other exchanges, and looking at the total number of coins for sale and for purchase, a complete opportunity dollar amount is computed.

bitcoin-analytics.com has been around for a while, and seems to have the most comprehensive amount of data. The free version is delayed by 6 hours, but there are three paid tiers (0.05 BTC per day, 0.3 BTC per month, 0.5 BTC for 2 months.)

Things are always more difficult on the USD side. You're trying to do business financial transactions through a regular bank account. Moving any substantial amount of money is asking for regulatory issues.

seems like a scam to me stay away.