Variances among prices on different sites

[jtphenom]

Hi folks,

Sorry if this has already been answered.

Why is there such a large difference between the price of BTC at one site vs. the price at another site? For instance, the price at BTC-e right at the moment is 855, while the price at bitstamp is 883.50? What's to stop people from continuously buying at BTC-e and selling at bitstamp?

Thanks for your help!
James

[PenAndPaper]

The simple answer it that there are exchanges that it's hard to move money in and others that it's hard to take them out. 

[jtphenom]

Would love a more detailed answer...

[rrjr777]

I too was wondering this, and a more detailed explanation would be great, if possible. If we were to compare it to any other commodity, there should be a fairly consistent price across exchanges. What would be preventing someone from buying low at one exchange and immediately selling higher in another?

[spqrusa]

What stops people is typically the USD transfer problem. MtGox and BTC-e are impossible to get USD out. Bitstamp and Kraken seem to work for USD. Kraken doesn't have much liquidity yet but they will as soon as they accept more USA customers.

Be really careful handing your money over to Bulgaria or Slovenia. Bitstamp (Slovenia) has been reliable so far. I think some of the negative stories about Bitstamp are planted by BTC-e shills. Really think BTC-e is run by wannabe Russian mafia.

[stultitia]

Just my 2 cents; it's the arbitrage concept in economy; and these companies are probably well aware of it. You don't need to worry. Just buy from one and sell to the other if you think it's feasible. There's nothing wrong or illegal about this. The price will stabilize in the long term anyways.

[Myer12]

I think its cause mt gox prices are inflated or something that an explanation that I have heard though it may be wrong

[WayTooGosu]

From my experience BTC-e generally has the lowest prices, so if you are purchasing BTC I recommend you do it from there.

[kpy90]

Prices on exchanges are generally related to the problems (or lack of problems) facing that exchange

mtgox, for example, has massive fiat withdrawal issues. This means that, to get your existing USD off of mtgox, you must BUY BTC and transfer to another exchange to SELL, one that you can actually withdraw from.

In this case, people tend to BUY btc at mtgox and transfer to bitstamp to SELL and cash out, increasing price on mtgox and decreasing on Bitstamp, since it's got more smooth cash withdrawal processes.

BTC-e from what I have heard, has trouble getting cash ONTO the exchange, many members complaining of delayed wire transfers, causing a shortage of fiat and therefore lower prices as less money flowing into exchanges.

Theoretically, arbitrage would smooth these differences out, but the difficulty of arbing has allowed such gaps to persist.

[beetcoin]

I think its cause mt gox prices are inflated or something that an explanation that I have heard though it may be wrong

i assumed that mt gox prices are inflated because it's hard to get your money out. that means there will be more people looking to buy into BTC, and less that are willing to sell off. it's supply and demand.

[Padawan]

I was discussing this with a friend the other day too.

Take BTC-E for example - you can deposit EUR via SEPA for a very small fee, so buying shouldn't be too hard?

deposit wire transfer $790
buy 1BTC @ $790 (example)
$790 for 0.998 (after trade fee)
withdraw to another exchange's deposit account - you now have 0.997 (after withdraw fee)
sell 0.997 @ $830 (example) on Bitfinex (or other exchange where its higher) = $826.62 (after trade fee)
withdraw wire transfer cost $10, leaving $816.62

Only $26 profit, but still, doable??

[PenAndPaper]

Just my 2 cents; it's the arbitrage concept in economy;

Arbitrage is what causes the price to become level eventually

[emilia79]

You have arbitrage...

Also in currency trade, mostly between central banks, networks have a role of a time keeper. All are synchronized, signatures are in finite times, data payload have a defined latency. And they exchange/compensate at the same known defined times.

So no jitter/wander.

BTC is made on totally different bases.

[MikeS]

I was discussing this with a friend the other day too.

Take BTC-E for example - you can deposit EUR via SEPA for a very small fee, so buying shouldn't be too hard?

deposit wire transfer $790
buy 1BTC @ $790 (example)
$790 for 0.998 (after trade fee)
withdraw to another exchange's deposit account - you now have 0.997 (after withdraw fee)
sell 0.997 @ $830 (example) on Bitfinex (or other exchange where its higher) = $826.62 (after trade fee)
withdraw wire transfer cost $10, leaving $816.62

Only $26 profit, but still, doable??

I know people in traditional fourex absolutely shitting themselves at a) the fees these exchanges charge, b) they offer no leveraged trading c) that there is such massive price variances between the exchanges and d) how insanely long it takes to get your money out. I believe over time we'll likely see as little as .04% variance between the exchanges including china. With a currency that can travel so freely and easily it's bound to happen. Then the exchanges will have to offer better features (instant access to funds, lower fees, leveraged buying, better interfaces) to remain competitive. It will happen very soon IMO.

[PenAndPaper]

Then the exchanges will have to offer better features (instant access to funds, lower fees, leveraged buying, better interfaces) to remain competitive. It will happen very soon IMO.

There are exchanges offering leveraged trading. Kraken for example.

[jtphenom]

What is "insanely long" when discussing how long it takes to get your money out? I have not yet tried to sell any of my BTC, so I don't know what kind of time we're talking about.. hours, days, weeks??

[novelstories]

Exchanges are not in sync with each other. Traders are completely not linked between exchanges.

[Cryptopher]

Yeah I noticed this too, but as long as you're trading within the same exchange then it will all be relative 99% of the time anyway, sometimes you see a big swing in a particular exchange.

[mosquitokiller]

Smart people can gain the profit purchasing from one exchange and selling on another one.

[oyeTorry]

Smart people can gain the profit purchasing from one exchange and selling on another one.

Arbitrage is pretty hard when moving USD from one exchange to another is so painfully slow