Arbitrage vs Liquidity

[aminorex]

Clearly arbitrage is very much available in BTC world.  There are venue spread arbs, as well as triangle arbs.  Liquidity may be good in a given venue, but that doesn't seem sufficient to eliminate the arbs as long as there are a sufficient number of under-informed market participants, which probably requires inter-market liquidity to be good as well.

Gosh, what are the dimensions of liquidity?  I think depth of book, width of spread, spread volatilty, depth volatility, and the nth differences of mid are all informative of liquidity conditions.  Anything else?  Is there a standard textbook on liquidity issues in arbitrage?

[b!z]

If you check the Economics/Speculation section, there will be many people who can explain arbitrage/liquidity to you. It would be hard to do arbitrage on exchanges with low liquidity.