15 dollar arbitrage between bitstamp and gox right now???

[bitwhizz]

15 dollar arbitrage between bitstamp and gox right now??? thats ridiculous, anyone know why?

[ronaldlee0917]

Because MtGox is a money black hole, absorbing all your money and refuse to pay back.
The only way to exit is to buy bitcoins there and sent them elsewhere, this explains the consistent buying pressure there.

An arbitrage is meaningless if your money cannot leave, right?

[bitwhizz]

gotcha !

[rowyourboat]

% arbitrage between gox and bitstamp is proportional to percieved % odds of mtgox defaulting

[Xenoph0bia]

The only way to exit is to buy bitcoins there and sent them elsewhere

and hoping your BTC withdrawal will be not delayed (lost)

[mp420]

Frankly I think all this panic over MtGox's problems is a bit silly. Of course there's a risk of MtGox defaulting (and even if that happens, it's very likely people will get (most of) their money back eventually). But there's a significant risk of default/regulatory takedown on every single other exchange too. So far, it does seem that Gox is actually processing their withdrawals, albeit very slowly. So, if you're going to sell, it would make sense to sell on MtGox and withdraw immediately and then wait the several months for the money to arrive, unless you're fairly certain you can get a better deal in some other manner.

[solex]

Frankly I think all this panic over MtGox's problems is a bit silly. Of course there's a risk of MtGox defaulting (and even if that happens, it's very likely people will get (most of) their money back eventually). But there's a significant risk of default/regulatory takedown on every single other exchange too. So far, it does seem that Gox is actually processing their withdrawals, albeit very slowly. So, if you're going to sell, it would make sense to sell on MtGox and withdraw immediately and then wait the several months for the money to arrive, unless you're fairly certain you can get a better deal in some other manner.

That's why the difference is only 15%, not 50%

If MtGox was exchanging anything other than bitcoins, the superman of currency, it would be dead by now.

[johnyj]

This is MTGOX's financial innovation: The withdraw time is so long that people are all forced to do long term investment in bitcoin, and the price will rise long term wise, this protect the exchange rate 

If it takes several months to withdraw your dollars from NASDAQ, you would just buy some stock and hold them for years before you withdraw

[Tzupy]

I would expect BTC from Bitstamp to flow (and be sold immediately) into Gox anytime.
That's what I would do if my latest deposit on Bitstamp would have reached my account.
Usually the difference has been 8 - 10 $, and could return to that after this mini-rally bursts.

[Nagle]

Frankly I think all this panic over MtGox's problems is a bit silly. Of course there's a risk of MtGox defaulting (and even if that happens, it's very likely people will get (most of) their money back eventually). But there's a significant risk of default/regulatory takedown on every single other exchange too. So far, it does seem that Gox is actually processing their withdrawals, albeit very slowly. So, if you're going to sell, it would make sense to sell on MtGox and withdraw immediately and then wait the several months for the money to arrive, unless you're fairly certain you can get a better deal in some other manner.

That's why the difference is only 15%, not 50%

If MtGox was exchanging anything other than bitcoins, the superman of currency, it would be dead by now.

5% spread two weeks ago.
10% spread last week.
15% spread this week. 

If Mt. Gox was a real broker/dealer, they would have been shut down within a day or two of their first default.  Like Lehman, Drexel, MF Global, etc. 

[bitcon]

The only way to exit is to buy bitcoins there and sent them elsewhere

and hoping your BTC withdrawal will be not delayed (lost)

i got my coins out the other day without problem

[XXthetimeisnowXX]

15 dollar arbitrage between bitstamp and gox right now??? thats ridiculous, anyone know why?

+1

[Nagle]

Perhaps the fair exchange rate could be estimated as 2-3% below gox quotes, but this is a very subjective estimation.

No, the fair exchange rate is that of a liquid market where both Bitcoins and cash can be deposited and withdrawn without difficulty. Bitstamp and BTCE are roughly that, and their prices are close together. Right now:

Exchange	Unit	Quote
BTCE	US$/BTC	98.00
Bitstamp	US$/BTC	98.88
MtGox	US$/BTC	113.20

That 15% premium on Mt. Gox is a risk premium - will you ever see your USD again?  You can no longer view Mt. Gox prices as a value of Bitcoin.

[MAbtc]

I'd agree that 2-3% below gox is significantly overvaluing. Maybe closer to 10%, probably more.

This shit always brings me back to online poker. When the Cake network was taking 4-6+ months to wire money (and talk of insolvency was at an all-time high), people were taking 50-60¢ / $1 for cash in hand. Even with the more reputable rooms, up to 30% vig was the norm -- fear of insolvency being much less of an issue, this is the price of waiting 2+ months to receive your money. (Well, worse really, because the checks from shady companies drawn on foreign banks are liable to bounce up to 6 weeks after deposit)

I have no evidence, but I can certainly conceive of a situation where no banks would touch Gox with a 10-foot pole, and they'd be right. I think Gox may have fucked itself forever. This may never, ever, resolve until its market share has dwindled to the point that its miniscule payment processing partners can handle the volume. Either that, or Gox could shave significant profits by working with shadier, high-margin payment processors.

[phoenix1]

I'd agree that 2-3% below gox is significantly overvaluing. Maybe closer to 10%, probably more.
<snip>
I have no evidence, but I can certainly conceive of a situation where no banks would touch Gox with a 10-foot pole, and they'd be right. I think Gox may have fucked itself forever. This may never, ever, resolve until its market share has dwindled to the point that its miniscule payment processing partners can handle the volume. Either that, or Gox could shave significant profits by working with shadier, high-margin payment processors.

Totally agree - they have been trying for about 2 months now to now avail - what is going to make the situation better ? Who have they not called yet ? The longer it goes on, the more likely it becomes, if it has not happened already
The run on Gox will be EPIC ... sky high prices until nobody will sell BTC there anymore
A Gox  $ IOU becomes worth less by the day

[StreakfortheBTC]

MtGox is the Lock Poker of bitcoin.  They take your money, and you never see it again, just make excuse after excuse

[phoenix1]

MtGox is the Lock Poker of bitcoin.  They take your money, and you never see it again, just make excuse after excuse

I can't believe anyone is still wiring them money .... that just does not make sense to me

[dacoinminster]

A mistrustful part of me suspects that MtGox is making huge profits arbitraging the price difference themselves, which gives them a perverse motivation to keep withdrawals slow.

[johnblaze]

I would expect BTC from Bitstamp to flow (and be sold immediately) into Gox anytime.

then you would have USD on gox, which you can never get

the market is always right

[silversurfer]

mtgox/coinbase spread is also growing over the last couple weeks, now ~$12 difference.

this indicates significant problems beyond some simple delays in withdraw/deposit times at mtgox.  i do not know exactly what problems, but we will find out eventually.

i have not used mtgox recently therefore unaware of all the details that are public.  but a quick glance at their website led me to the following statement that strikes me as somewhat fishy:

For example it currently takes up to 10 days to process a deposit because our bank, upon receiving deposits, notifies us of the deposit but holds them for 7~10 days before transferring them to our account. This has always been the case, and we were still crediting customer accounts before receiving the funds ourselves, but some cases in which the bank subsequently rejected the deposits meant that we incurred significant losses. The risk is now too high for us to credit accounts prematurely. We are in the process of forming relationships with new partners, banks, and taking other steps -- hopefully we will not only be back where we were before we encountered these issues , but much further ahead.