Hi all, I'm sticking to USD trades at present as more exchanges support it and the cost per USD coin is often less than cost per coin in GBP. If I send BTC shall we say to MTGox and sell, I have a balance on account of USD. On localbitcoins (LBC) I can choose to buy/sell in whatever currency.
I'm trying to understand where the currency rates are derived from and also whether I can buy bitcoins whilst holding bitcoins. If I have 1 BTC bought in USD and see an arbitrage in RUR or EUR, the only way I think I can trade this is to exchange my BTC for a currency on the exchange, such as BTC-e, then buy in that currency the relevant amount of BTC. This means I need to know my currency rates and transaction fees. Right now as I type, the actual interbank spot for EURUSD is 1.3668 and BTC-e is 1.26399, a huge difference of 1028 pips and I mean huge! (I used to make an annual salary on 40 pips) - I presume the exchange sets their own rates!
So back to LBC, if I have a bitcoin wallet of $1000 and a customer wishes to pay me in GBP for £500 worth of BTC, how is this rate transacted? I believe I build the exchange rate into the offer price based on the
LBC selling tools, meaning the client buys from me 'if' they like my rate, much like an exchange does.
Online exchanges though, seem to have the largest spreads and hopping currencies does not seem viable, unless I am missing something or a site where this is easier? (Please advise) Bitstamp for example sticks rigidly to your registration currency and you can't pick and choose a currency.
Naturally I would
not use ripple for
many reasons and would advise anyone even considering it to do their homework!
My goal is to maximize arbitrage without drawing the cash. All feedback welcome.
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