Coins various prices on different exchanges

[orssonlack]

Hi,

I was looking around on coinmarketrecap and noticed the differ in prices on a coin on different exchanges. In one case I found the difference to be +/-30%. Obviously I'm a newbie but the possibility of making such easy profit seem to good to be true..

Can someone explain this as it cannot be this easy to profit by simply transferring coins between exchanges to sell at a higher price...

Thanks,
Newbie

[AdolfinWolf]

Hi,

I was looking around on coinmarketrecap and noticed the differ in prices on a coin on different exchanges. In one case I found the difference to be +/-30%. Obviously I'm a newbie but the possibility of making such easy profit seem to good to be true..

Can someone explain this as it cannot be this easy to profit by simply transferring coins between exchanges to sell at a higher price...

Thanks,
Newbie

Indeed. The coins you are referring to probably have a really low liquidity ( volume ), which is the reason why they're priced so differently on different markets. As a result of that you may or may not be able to sell the coins, or move them fast enough to make a profit.

What you are trying to do is called "Arbitrage". See https://www.investopedia.com/terms/a/arbitrage.asp

[moonshoot]

It is possible, but it could also be that the bid and ask spreads are wide on such coins, so the last price someone paid may not be what you can get, and it also may take a while to get these trades and things can move unpredictably on both exchanges if there is not a lot of volume.

You also have the obstacle of depositing, trading, and withdrawing your funds, so if for example one exchange had much cheaper prices for a coin, you might be able to buy them, but selling them on the other exchange could take quite a while to go through the transfer process on some exchanges. This would get more difficult as you tried to scale up to larger amounts and started hitting withdrawal limits, especially if you did not go through the verification processes to have higher withdrawal limits. You could maintain balances on both and hope that the prices flip the other way and you could do the reverse trade without moving anything between exchanges, but that may not happen quickly, or at all.

[aardvark15]

Hi,

I was looking around on coinmarketrecap and noticed the differ in prices on a coin on different exchanges. In one case I found the difference to be +/-30%. Obviously I'm a newbie but the possibility of making such easy profit seem to good to be true..

Can someone explain this as it cannot be this easy to profit by simply transferring coins between exchanges to sell at a higher price...

Thanks,
Newbie

Some people do apparently make money this way. It’s referred to as arbitrage. There are variations in price from one exchange to another but remember that moving coins this way will cost you a fee each time. Plus there will be a lag in the timing. Too me it seems to be too cumbersome to keep track of, but it must work for some people. You also need to have accounts with all these exchanges.

[HabBear]

I was looking around on coinmarketrecap and noticed the differ in prices on a coin on different exchanges. In one case I found the difference to be +/-30%. Obviously I'm a newbie but the possibility of making such easy profit seem to good to be true..

Can someone explain this as it cannot be this easy to profit by simply transferring coins between exchanges to sell at a higher price...

Indeed. The coins you are referring to probably have a really low liquidity ( volume ), which is the reason why they're priced so differently on different markets. As a result of that you may or may not be able to sell the coins, or move them fast enough to make a profit.

What you are trying to do is called "Arbitrage". See https://www.investopedia.com/terms/a/arbitrage.asp

AdolfinWolf, I think you may be misunderstanding. orssonlack is talking about the difference in price across exchanges for a single coin, i.e., Bitcoin price across the exchanges can vary. orssonlack is saying that difference is +/- 30%, he hasn't provided evidence so we don't know which exchanges he's referring to, but the reason for the swing is anything BUT really low liquidity. The fact that we're talking about the same coin means the liquidity is the same, regardless of the exchange.


S. Korea and Africa have had notoriously high prices for Bitcoin.

Presumeably you could transfer bitcoin from one exchange in the UK (with a "normal" price) to an exchange in S. Korea (with a high price) and benefit form selling that bitcoin on the S. Korea exchange for a more stable currency, i.e., Ether or Ripple. Then repatriate that Ether/Ripple back to your home exchange. It is, theoretically, that easy. But I'm not factoring in actual prices and the fees associated with each transaction. It's the fees that'll churn your arbitrage opportunity away.

To the OP, you should provide some analysis. On the same day, with in the same 10 minute period, record the price of Bitcoin across several exchanges. Post them on this site. Then let's talk about how anyone could take advantage of the arbitrage, in real terms.