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Author Topic: Arbitrage opportunity??  (Read 3451 times)
rudz
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November 03, 2013, 04:48:26 PM
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I am looking to buy BitCoins. When I was doing a little research on trading websites, I found something interesting, yet strange.

Some of you are familiar with the term arbitrage. For those who don't, arbitrage means "the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset." Which basically means making money out of nothing. And in the world of finance and economics, arbitrage doesn't exist because the prices reach to a point of equilibrium.

Anyway, price of BTC on MtGox is $212, and on BTC-e it is $203. Now what stops me from buying BTC from BTC-e and sell them on MtGox?? Thus making a profit of $9 for every BTC.
I am sure something is weird here and this doesn't work for some reason because everyone would be doing so. Can someone who knows about trading in these sites explain to me how the process work? and how come they have different prices of BTC? and if I can't use this arbitrage opportunity, what would be the reason?

Thank you
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Lord F(r)og
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November 03, 2013, 05:01:47 PM
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You will end up stucked your funds in gox. There are lots of threads about that issue. check mtgox' withdrawal procedure there: https://support.mtgox.com/entries/21649594-Withdrawals-and-Deposits

most recent thread: https://bitcointalk.org/index.php?topic=179586
uck
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November 03, 2013, 05:27:36 PM
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so is it true that Gox doesnt allow USD withdrawal to anyone, anywhere on the planet? or just to USA customers?  Seems like they should be able to transact USD with say, someone in Belgium...

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November 03, 2013, 05:32:55 PM
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so is it true that Gox doesnt allow USD withdrawal to anyone, anywhere on the planet? or just to USA customers?  Seems like they should be able to transact USD with say, someone in Belgium...

where the heck you got such BS from?
notme
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November 03, 2013, 05:51:27 PM
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Gox withdrawals work well in some places, not in others.

Regarding arbitrage, in any case you will have fees.  This will limit what you can do profitably, even if your funds flow is working properly.  Trade fees on both exchanges and multiple fiat wire fees will keep the gap from closing completely.  That said, opportunities do appear sometimes if you keep an eye out.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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November 04, 2013, 05:31:22 AM
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Yeah everyone realised this as soon as price discrepancies began appearing. But think to yourself, if it did work, why isn't everyone doing it?

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November 04, 2013, 03:16:55 PM
 #7

I am looking to buy BitCoins. When I was doing a little research on trading websites, I found something interesting, yet strange.

Some of you are familiar with the term arbitrage. For those who don't, arbitrage means "the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset." Which basically means making money out of nothing. And in the world of finance and economics, arbitrage doesn't exist because the prices reach to a point of equilibrium.

Anyway, price of BTC on MtGox is $212, and on BTC-e it is $203. Now what stops me from buying BTC from BTC-e and sell them on MtGox?? Thus making a profit of $9 for every BTC.
I am sure something is weird here and this doesn't work for some reason because everyone would be doing so. Can someone who knows about trading in these sites explain to me how the process work? and how come they have different prices of BTC? and if I can't use this arbitrage opportunity, what would be the reason?

Thank you

Not arbitrage, its 100% loss.... look up the forum and you understand more about MtGox and why the price is higher....

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November 06, 2013, 04:37:33 PM
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I wrote about it here
http://afbitcoins.wordpress.com/2013/10/01/mtgox-price/
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November 08, 2013, 03:41:04 PM
 #9

btcchina prices have been at a 5% premium to bitstamp for a while now, at the 6.1 usdcny fx rate. 

arbitrage is very very good to me.

but i would remind anyone thinking of competing with me that the efficient market theory dictates that arbitrage doesn't exist.

Give a man a fish and he eats for a day.  Give a man a Poisson distribution and he eats at random times independent of one another, at a constant known rate.
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November 08, 2013, 04:51:38 PM
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I did a test, with 1 BTC. I sold it on MtGox (I think for like ~100 USD), and had it waiting in a transfer queue in MtGox for over 3 months, waiting on their bank to complete the wire transfer. In late October, I finally asked them to cancel the USD wire transfer and convert it back to BTC, so I could use my BTC somewhere else.

This is a great idea but there's no way to get USD out of MtGox without growing old. Your money can work better for you elsewhere.
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November 11, 2013, 04:56:03 AM
 #11

But if you try buying in btce and selling in via mtgox, and for this transaction you could reach a 10% of gain.
After this you will wait 1 month aprox to recieve the money, you could obtain 10% per month I think it`s very good.
Do anybody knows approximadly the estimated time until the money is in the bank?? 1 month 2 months??
keatonatron
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November 11, 2013, 05:05:16 AM
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This has been discussed quite a bit before.

BTC-E has always had lower prices, because it's hard to get money in. Gox has, for the past couple of months, had high prices because it's hard to get money out.

Everyone has a different experience. If you think whatever % you can get sounds good, even if it takes a few months to get your money, then go for it. Of course the price of bitcoins might double in that time, and then you would have been better off just waiting and selling back to wherever you bought them.

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November 11, 2013, 08:41:36 AM
 #13

Yes, I've learn't my lesson, requested withdrawal from Mtgox in July (when bitcoins were just over $100, finally gave up, requested they refund so I can exchange it back into bitcoins again, only thing is it took them 4 days to process my request, during which bitcoins went from $200 to over $300. Arbitrage, in Mtgox is the stupidest idea ever if you're outside of Japan.

Arbitrage opportunity for CNY is better, as I'm currently conducting AUD -> BTC -> CNY arbitrage via our managed fund (http://bitcoinsreserve.com/)

And am looking for partner to conduct USD -> BTC -> CNY.

PM me if you are trading in USD and have a bitstamp/btc-e account and wish to explore this further.

Cryptocurrency Consulting, www.globalbtc.com
Arbitrage and investment PE Fund, www.bitcoinsreserve.com
Bitcoin accepting Consumer Electronics E-tailer, www.millennius.com
keatonatron
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November 13, 2013, 08:05:54 AM
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Yes, I've learn't my lesson, requested withdrawal from Mtgox in July (when bitcoins were just over $100, finally gave up, requested they refund so I can exchange it back into bitcoins again, only thing is it took them 4 days to process my request, during which bitcoins went from $200 to over $300. Arbitrage, in Mtgox is the stupidest idea ever if you're outside of Japan.

Arbitrage opportunity for CNY is better, as I'm currently conducting AUD -> BTC -> CNY arbitrage via our managed fund (http://bitcoinsreserve.com/)

And am looking for partner to conduct USD -> BTC -> CNY.

PM me if you are trading in USD and have a bitstamp/btc-e account and wish to explore this further.

How do you get CNY out of China?

1KEATSvAhbB7yj2baLB5xkyJSnkfqPGAqk
SquallLeonhart
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November 13, 2013, 02:40:08 PM
 #15

I am looking to buy BitCoins. When I was doing a little research on trading websites, I found something interesting, yet strange.

Some of you are familiar with the term arbitrage. For those who don't, arbitrage means "the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset." Which basically means making money out of nothing. And in the world of finance and economics, arbitrage doesn't exist because the prices reach to a point of equilibrium.

Anyway, price of BTC on MtGox is $212, and on BTC-e it is $203. Now what stops me from buying BTC from BTC-e and sell them on MtGox?? Thus making a profit of $9 for every BTC.
I am sure something is weird here and this doesn't work for some reason because everyone would be doing so. Can someone who knows about trading in these sites explain to me how the process work? and how come they have different prices of BTC? and if I can't use this arbitrage opportunity, what would be the reason?

Thank you

Yup, you can do it on btc-e and bitstamp but not MtGox... cause they have problem withdrawing...
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November 13, 2013, 03:06:10 PM
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Yup, you can do it on btc-e and bitstamp but not MtGox... cause they have problem withdrawing...

Mtgox has problems withdrawing to you.  And by "you", I mean "most of us", to be sure, not just you proper.  There are many reports of people in Japan with accounts in Japanese banks that have no problem getting their money in and out.

Someone with accounts in Japan, Europe and the US, and access to forex in all three places could make a killing right now.  Hopefully someone with sufficient capital to set that up is working on it right now.  Wish it was me.

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Sindelar1938
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November 13, 2013, 03:14:19 PM
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Optical illusion

Arb is a theoretical not a real possibility

btcbug
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November 14, 2013, 12:38:17 AM
 #18

I did a test, with 1 BTC. I sold it on MtGox (I think for like ~100 USD), and had it waiting in a transfer queue in MtGox for over 3 months, waiting on their bank to complete the wire transfer. In late October, I finally asked them to cancel the USD wire transfer and convert it back to BTC, so I could use my BTC somewhere else.

This is a great idea but there's no way to get USD out of MtGox without growing old. Your money can work better for you elsewhere.


Hi,

Did Mt. Gox convert it back to BTC? I've been waiting months and I just figured they would put the $ amount back into my account and I'd be forced to buy back the coins at today's price and withdraw the fiat elsewhere. If I can get my BTC back I'd be ecstatic!

Thanks
Golph
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November 14, 2013, 12:58:46 AM
 #19

Optical illusion

Arb is a theoretical not a real possibility

It is possible, just not in this case cause its the merchant problem...

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November 14, 2013, 03:24:56 PM
 #20

Optical illusion

Arb is a theoretical not a real possibility

It is possible, just not in this case cause its the merchant problem...

Arb is possible, especially when you have a 10% difference between CNY and USD.

Doing it now. and happy to show people how. Smiley

Peace.

Cryptocurrency Consulting, www.globalbtc.com
Arbitrage and investment PE Fund, www.bitcoinsreserve.com
Bitcoin accepting Consumer Electronics E-tailer, www.millennius.com
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