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Author Topic: Why Are The MTGox and BitStamp Prices Different  (Read 4200 times)
batt01
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July 28, 2013, 04:20:15 PM
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It appears that there are several major exchanges. Why is the price USD price 96 on one exchange and 88 on another?

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the joint
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July 28, 2013, 04:23:41 PM
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It appears that there are several major exchanges. Why is the price USD price 96 on one exchange and 88 on another?

Btc-e is typically lower due to extreme difficulty getting fiat into and out of the exchange.  If it takes hours + several % in transfer fees, it makes sense that it's lower.  I can't speak for other exchanges.

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July 28, 2013, 06:32:53 PM
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It appears that there are several major exchanges. Why is the price USD price 96 on one exchange and 88 on another?

For comparison, Bitfinex currently shows 91.77/91.98, BitStamp shows 91.76/9.99, and BTC-e shows 89/89.033, while Mt Gox shows a last trade at 98.50. Given the hassles which Mt Gox has had processing USD ever since their "temporary hiatus" on 20 June (and their "resumption" and "improved banking" on 4 July, and their "enhanced banking compliance" on 10 July, etc.), it wouldn't be too surprising if additional demand for Bitcoin -- which has no such hassles -- caused the price on that specific exchange to be higher. In other words, if you have dollars sitting in Mt Gox, you might be willing to pay a bit extra for Bitcoin so that you can move your capital elsewhere.

Historically speaking, the size of the difference between Mt Gox and almost anywhere else shot right up around the time of their 20 June announcement.

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July 28, 2013, 08:19:05 PM
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It appears that there are several major exchanges. Why is the price USD price 96 on one exchange and 88 on another?

Read the service discussion section of this forum for the number of people having problems getting their money out of Gox.  Basically with no way to transfer fiat out of Gox, people are buying Bitcoins at Gox, moving it to another exchange, and selling it there.

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July 28, 2013, 08:31:50 PM
 #5

that, in addition to costs. it used to be free to put money into Gox, so there was a large supply of money there. now the withdrawal problem is constricting money inflows as well as out.

Bitstamp et al were lower priced because it cost more to deposit money in. It costs me the wire fee + 1% to deposit money into bitstamp

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batt01
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July 28, 2013, 10:49:43 PM
 #6

Thanks for the replies, all my questions have been answered.

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July 29, 2013, 01:03:05 AM
 #7

It appears that there are several major exchanges. Why is the price USD price 96 on one exchange and 88 on another?

Read the service discussion section of this forum for the number of people having problems getting their money out of Gox.  Basically with no way to transfer fiat out of Gox, people are buying Bitcoins at Gox, moving it to another exchange, and selling it there.

Is this actually happening?  I would be surprised if it was.  I mean, when people want to cash out I can see them using another exchange.  But, if someone buys bitcoins, they wouldn't just transfer them right away to sell them. That'd be stupid (i.e. skip buying in the first place and just hold the fiat, and then avoid losing 5-10% on withdrawal).  I think that people would be more inclined to keep their cash on gox because that's where the volume is, and thus trading is immensely better.

The price has been consistently lower on other exchanges whether or not gox is having issues, particularly exchanges to which it is difficult to deposit fiat.

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July 30, 2013, 03:52:19 AM
 #8

I think the Gox price may be going up because new inflows of BTC are drying up their, we have seen less and less rebound of the BTC volumes available on Gox as the recent whale-buys scoop up coins.  If a person wants to sell BTC and get their USD NOW then they are not going to sell them on Gox.  People can still move money onto Gox but if your Bullish and have USD not on an exchange your still going to want to buy on the exchange that's got the lowest prices, which should be moving volume to bitstamp.  Only if your USD is "GXD" AND your bullish or are afraid that BTCs are the only way to get out of Gox would you try to buy up BTCs their.  The price on other exchanges is then a reflection of the willingness of other people to arbitrage between exchanges.

If we really are seeing a drying of of BTC flows onto Gox then we might see a spiral as the BTC depth plummets and the supposed exchange rates shoots up, but if it's just due to a drying up of coins then we will see all volume move to the other exchanges and the Gox price will become irrelevant.

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July 30, 2013, 09:50:30 AM
 #9

One exchange will be easier to get money into that another.  When the price difference is big that means arbitrage is difficult- you know many would like to take advantage of the easy money.  Many exchanges have been unreliable recently.

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