where has the spread gone?

[greBit]

I find it strange how suddenly the Bitstamp/MtGox spread has reduced drastically. Only a week or so ago there was a 100$ odd difference..

Has someone managed to find a fiat-shortcut between slovenia and japan banks?

[Sindelar1938]

We are all trying to figure this out 

[dnaleor]

Maybe Mark Karpeles is doing the arbitrage himself?

[CMMPro]

Someone figured out a way to arb....and they likely made a killing from it in the short term.

[mvidetto]

I find it strange how suddenly the Bitstamp/MtGox spread has reduced drastically. Only a week or so ago there was a 100$ odd difference..

Has someone managed to find a fiat-shortcut between slovenia and japan banks?

The hype is cooling down obviously, it just hasn't hit the smaller exchanges because they aren't used as much.

[theonewhowaskazu]

I think its fairly likely that someone either in the Bitstamp management, or in the Gox management, or perhaps even in a partner site like Bitfinex, is somehow doing arb. The chances of an independent third party being able to arb effectively is pretty low IMO.

[notme]

I think its fairly likely that someone either in the Bitstamp management, or in the Gox management, or perhaps even in a partner site like Bitfinex, is somehow doing arb. The chances of an independent third party being able to arb effectively is pretty low IMO.

IMO you very likely don't know enough for your O to carry any weight in this matter.

[uininPeter]

I think its fairly likely that someone either in the Bitstamp management, or in the Gox management, or perhaps even in a partner site like Bitfinex, is somehow doing arb. The chances of an independent third party being able to arb effectively is pretty low IMO.

This. Exchanges can make a lot of money by arbitraging themselves. Dunno why it took em so long.

[eldentyrell]

I think its fairly likely that someone either in the Bitstamp management, or in the Gox management, or perhaps even in a partner site like Bitfinex, is somehow doing arb. The chances of an independent third party being able to arb effectively is pretty low IMO.

This. Exchanges can make a lot of money by arbitraging themselves.

Not as easily as you think.  The skewed-high exchange (gox) has to wire fiat to the other exchange (bitstamp) and trust them not to freeze/stall/aml-confiscate it, and the skewed-low exchange (bitstamp) has to trust that once the BTC are withdrawn they won't find the fiat clawed back as a result of a bank-level wire reversal, lawsuit, or bankruptcy proceeding.

When you're talking about this much money wire transfers are reversible, either by banks or courts.

Spreads like we saw recently come from a lack of trust at some level.  It really can't be fixed except by mechanisms that involve trust (perhaps of a different sort).

My best guess is that there has been a major positive development for gox's situation and somebody's trading on that inside info.  Perhaps with gox's tacit approval since they'd rather fix the spread by leaking the info to one large whale so that by the time it becomes public the spread is already gone.  That way they don't get mobbed with an enormous pile of fiat transfers (which are very labor-intensive) from a billion different customers all trying to arb $10 at a time.  Could also be a major negative development for bitstamp although that's less likely.

[DeathAndTaxes]

I think its fairly likely that someone either in the Bitstamp management, or in the Gox management, or perhaps even in a partner site like Bitfinex, is somehow doing arb. The chances of an independent third party being able to arb effectively is pretty low IMO.

This. Exchanges can make a lot of money by arbitraging themselves.

Not as easily as you think.  The skewed-high exchange (gox) has to wire fiat to the other exchange (bitstamp) and trust them not to freeze/stall/aml-confiscate it, and the skewed-low exchange (bitstamp) has to trust that once the BTC are withdrawn they won't find the fiat clawed back as a result of a bank-level wire reversal, lawsuit, or bankruptcy proceeding.

When you're talking about this much money wire transfers are reversible, either by banks or courts.

Spreads like we saw recently come from a lack of trust at some level.  It really can't be fixed except by mechanisms that involve trust (perhaps of a different sort).

My best guess is that there has been a major positive development for gox's situation and somebody's trading on that inside info.  Perhaps with gox's tacit approval since they'd rather fix the spread by leaking the info to one large whale so that by the time it becomes public the spread is already gone.  That way they don't get mobbed with an enormous pile of fiat transfers (which are very labor-intensive) from a billion different customers all trying to arb $10 at a time.  Could also be a major negative development for bitstamp although that's less likely.

Well you don't have to do it one lump sum.

Even $5K per day is $5.5M per year and when you are talking about a 20%+ arb that is a no brainer.

[eldentyrell]

Even $5K per day is $5.5M per year and when you are talking about a 20%+ arb that is a no brainer.

Arb at that rate would take decades to close the spread.

Also, a bankruptcy judge can easily claw back several months' worth of transfers a year or more after-the-fact.  So spreading the transactions out over time is no less risky than doing them all at once.  It's the overall amount transferred (not the size of the largest transaction) that matters from a wire-reversal risk standpoint.

Stuff like this is why the people running the legacy financial system bought themselves special exceptions to bankruptcy law.