Nope. Wrong again and again. Those arb opportunities, in traditional markets, only occur for a fraction of a second. There are no long arb opportunities unless there is something broken with the market or with liquidity.
Bitcoin exchanges are not traditional markets. Traditional markets for currency exchange is banks, and only open during the banks opening hours. There are plenty long arbitrage possibilities in Bitcoin. Between exchanges, and even local to multi-currency exchanges. You do not have to go far from the banks to find arbitrage opportunities which are more risky to exploit. E.g. my stock example.
I would like to point to
this here as well. Do you really believe Bitcoin exchanges are even remotely close to banks in terms of liquidity?
In the case of Gox you are looking at both.
This is funny, because
here you claim it is about lack of trust, not low liquidity. You even moved the Coinlab rectangle two weeks to the right because the facts didn't fit your theory.
As for your example of currency rate fluctuation, arb opportunity is taken advantage of near instantly. Just because your arb bots are running out of cash due to your low cash flow, doesn't mean that there isn't someone with millions of dollars of liquidity who could take advantage of the arb opportunity before depleting funds.
Now, here you have a point. Due to one of the easiest arbitrage exchanges for buying right now are operating in obvious violation of the law, I don't want to risk much money there. Neither does anyone else, which you can easily see from the depth of their order book. Keeping millions of dollars there (unless you mean Zimbabwe dollars) is completely out of the question. And they don't allow me credit, like the markets you are comparing with do. This of course limits my own arbitrage possibilities.
Eh? No. You are ignoring a large number of facts here. How much experience do
you have with real life arbitrage trading? Any at all? Read a little about it on the internet, perhaps? Not quite understanding all the basics?
No large player can take advantage of the arb opportunity, otherwise the spread would be 0%. Therefore, this arb opportunity will exist and spread larger and larger as users on Gox realize that they can't actually cash out large sums.
Taking out a 0.1% arbitrage possibility in the Bitcoin markets will make you lose money. Come back when you can explain why. People have no problems cashing out six figures of USD or EUR from MtGox, and JPY withdrawal has never been limited. I guess most of them will be careful of placing a six digit amount of USD on an exchange operating on borrowed time to take out a limited amount of arbitrage.
