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Author Topic: Bitcoin Arbitrage Opportunities - Making $$$  (Read 2800 times)
BCNA
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September 08, 2011, 03:25:14 AM
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Some Traders are making good money using Bitcoin Arbitrage.

Please share your tips and suggestions so that other people can also benefit from Arbitrage opportunites.

This will help the community by increase in trading activity across vaious exchanges.
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nmat
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September 08, 2011, 03:27:21 AM
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You are only making good money if you arbitrage manually (and even then, I doubt it). Exchanges with APIs (especially TradeHill/MtGox) are pretty close to each other most of the time.

You might want to take a look at this
Stephen Gornick
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September 08, 2011, 03:36:03 AM
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This will help the community by increase in trading activity across vaious exchanges.

With volatile exchange rates (both in BTC and lately in the other currencies as well) and markets in over two dozen currencies, the are plenty of opportunities for arbitrage.  The order sizes are generally small though so the amount of profit from arbitrage isn't enough, it appears, to attract automated arbitrage trading just yet.
 - http://en.bitcoin.it/wiki/Bitcoin_Arbitrage_Opportunities
 - http://www.bitcoinmoney.com/post/7000316379
 - http://www.bitcoinmoney.com/post/7259588518

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September 08, 2011, 03:37:28 AM
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What does this have to do with the next leader of the Klingon Empire?










Oh, wait. You said arbitrage, not arbiter. Smiley

"MOOOOOOOM! SOME MYTHICAL WOLFBEAST GUY IS MAKING FUN OF ME ON THE INTERNET!!!!"
nmat
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September 08, 2011, 03:51:37 AM
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With volatile exchange rates (both in BTC and lately in the other currencies as well) and markets in over two dozen currencies, the are plenty of opportunities for arbitrage.  The order sizes are generally small though so the amount of profit from arbitrage isn't enough, it appears, to attract automated arbitrage trading just yet.

I believe this is the main problem. There isn't an easy, fast way of transferring money between currencies. So if you want to arbitrage for all exchanges in all currencies, you must have a lot of money sitting idle in these exchanges waiting for something to happen. The problem is that when something does happen, you will not earn much because these exchanges have a really low market depth. It's like walking around the park picking up cents.
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September 08, 2011, 04:11:38 AM
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With volatile exchange rates (both in BTC and lately in the other currencies as well) and markets in over two dozen currencies, the are plenty of opportunities for arbitrage.  The order sizes are generally small though so the amount of profit from arbitrage isn't enough, it appears, to attract automated arbitrage trading just yet.

I believe this is the main problem. There isn't an easy, fast way of transferring money between currencies. So if you want to arbitrage for all exchanges in all currencies, you must have a lot of money sitting idle in these exchanges waiting for something to happen. The problem is that when something does happen, you will not earn much because these exchanges have a really low market depth. It's like walking around the park picking up cents.


NMAT, Stephen: Thank you for the valuable input and Great links. This type of info will definitely benefit us.
cottoneyeJoe
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September 08, 2011, 05:23:52 AM
 #7

I've been doing automated arbitrage against Mt.Gox, TradeHill and CampBx since about July 15th with $2000 USD and 200 BTC. I've netted ~$400 profit. Average daily is around $7. The no commission days at Gox were great and the loss of Dwolla @ TradeHill hurt and frankly it's really barely worth my effort thus far.

But there have been days where volatility is high and I hit on a $20 or $50 spread opportunity and it brings a smile to my face. It's also kind of nice in that all of the BTC came from mining and I get to follow bitcoin without too much risk.
Yankee (BitInstant)
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Charlie 'Van Bitcoin' Shrem


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September 08, 2011, 05:32:09 AM
 #8

Try out Bitinstant.com

MtGx Coupon codes to TradeHill instantly, take advantage of the spread.

Bitcoin pioneer. An apostle of Satoshi Nakamoto. A crusader for a new, better, tech-driven society. A dreamer.

More about me: http://CharlieShrem.com
nmat
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September 08, 2011, 05:40:55 AM
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I've been doing automated arbitrage against Mt.Gox, TradeHill and CampBx since about July 15th with $2000 USD and 200 BTC. I've netted ~$400 profit. Average daily is around $7. The no commission days at Gox were great and the loss of Dwolla @ TradeHill hurt and frankly it's really barely worth my effort thus far.

But there have been days where volatility is high and I hit on a $20 or $50 spread opportunity and it brings a smile to my face. It's also kind of nice in that all of the BTC came from mining and I get to follow bitcoin without too much risk.

Do you have to move money around much? How easily do you dry out the funds from one of the accounts? Do you have a "minimum profit" or do you arbitrage as soon as you cover fees? You earned ~10% in almost 2 months. It's not that bad...
cottoneyeJoe
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September 08, 2011, 06:01:24 AM
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Do you have to move money around much? How easily do you dry out the funds from one of the accounts?

Yes, a bit. Usually have to transfer USD once or twice a week, and will move BTC a bit more often. But sometimes I just wait for the spreads to flip around and do the rebalancing for me. The Paxum fees hurt the worst and I dont transfer to/from it unless I've made enough to cover it.

Bitinstant looks interesting but there seems to be no way to get money out of TradeHill, so I might start using it as an alternative to Paxum for TH deposits and continue to use Dwolla for Gox and CampBx.

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Do you have a "minimum profit" or do you arbitrage as soon as you cover fees?

Yes, I have a min profit $ setting and also scale the amount I'm willing to trade against a minimum profit % (with commissions factored in) and never attempt to trade the entire lot size...as it's too easy to get left holding one side of the trade or the other.

I also make sure to do the sell side first and if that was successfully executed and fewer than a certain number of milliseconds have elapsed since the order book was grabbed, I proceed with the buy order. I've gotten burned a couple of times with a trade here or there that didnt fill, but all of them eventually cleared out with the volatility over a few days.

The funny things is I expected under capitalization on my part to be the limiting factor, but I rarely see spreads where I'm not able to cover 90% of it. I hope to be adding some rules to the engine soon that will search areas of the order books rather than just the current lowest ask vs. highest bid and that approach may show that my adding more capital might improve the returns.

Gareth Nelson
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September 08, 2011, 10:43:26 AM
 #11

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Do you have to move money around much? How easily do you dry out the funds from one of the accounts?

Yes, a bit. Usually have to transfer USD once or twice a week, and will move BTC a bit more often. But sometimes I just wait for the spreads to flip around and do the rebalancing for me. The Paxum fees hurt the worst and I dont transfer to/from it unless I've made enough to cover it.

Bitinstant looks interesting but there seems to be no way to get money out of TradeHill, so I might start using it as an alternative to Paxum for TH deposits and continue to use Dwolla for Gox and CampBx.
We'll be working on withdrawals next, for now you can do things the other way round the slow way by using inter-exchange BTC transfers - withdraw from exchange A into exchange B's deposit address.
But keep an eye on BitInstant - we'll be speeding this bit up too. It involves what is now jokingly referred to as "dark black crypto magic" internally.

A shameless plug - here's our goxsh fork: http://bitinstant-downloads.s3-website-us-east-1.amazonaws.com/
aq
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September 08, 2011, 05:09:55 PM
 #12

Try out Bitinstant.com

MtGx Coupon codes to TradeHill instantly, take advantage of the spread.
While this is really great, it is still a "one-way street", and completely ignoring all the other exchanges too.
Any ambitions to add more exchanges/directions?
Yankee (BitInstant)
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Charlie 'Van Bitcoin' Shrem


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September 08, 2011, 05:27:34 PM
 #13

Try out Bitinstant.com

MtGx Coupon codes to TradeHill instantly, take advantage of the spread.
While this is really great, it is still a "one-way street", and completely ignoring all the other exchanges too.
Any ambitions to add more exchanges/directions?

YES!

You will see more payment methods, exchanges, withdrawals and more rolling out very soon!

Charlie

Bitcoin pioneer. An apostle of Satoshi Nakamoto. A crusader for a new, better, tech-driven society. A dreamer.

More about me: http://CharlieShrem.com
cottoneyeJoe
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September 09, 2011, 07:12:57 AM
 #14

Ok, I tried BitInstant today to do some rebalancing and was very pleased with it. I moved around $1000 USD from MtGox to Tradehill using 2 MtGox coupon codes.

- The fees are slightly more favorable than using Paxum given that I think I would have been charged for both the in and out.
- It really was INSTANT!
- I liked the fact that I didnt have to register, or provide any credentials information for either exchange.
- I liked that the confirm page shows the progress in real-time.

I was slightly confused as to where to put the coupon code at first, but then was relived to see that it's on the next page after putting in the from, to and amount.

I will definitely use it again, especially if you start supporting more exchanges.

Thanks for the tip and a very cool service. Now please, dont screw it up or get accused of being a pedo or anything. Bitcoin cant handle many more scandals!  Wink
Yankee (BitInstant)
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Charlie 'Van Bitcoin' Shrem


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September 09, 2011, 02:05:32 PM
 #15

Ok, I tried BitInstant today to do some rebalancing and was very pleased with it. I moved around $1000 USD from MtGox to Tradehill using 2 MtGox coupon codes.

- The fees are slightly more favorable than using Paxum given that I think I would have been charged for both the in and out.
- It really was INSTANT!
- I liked the fact that I didnt have to register, or provide any credentials information for either exchange.
- I liked that the confirm page shows the progress in real-time.

I was slightly confused as to where to put the coupon code at first, but then was relived to see that it's on the next page after putting in the from, to and amount.

I will definitely use it again, especially if you start supporting more exchanges.

Thanks for the tip and a very cool service. Now please, dont screw it up or get accused of being a pedo or anything. Bitcoin cant handle many more scandals!  Wink

Thanks for the great feedback!
I'm really glad everything went smoothly, secure and Instant!

We try to keep the fees as low as possible, covering our costs and risk. We are thinking about adding a monthly flat fee support  as well.
Next on the list is adding a few more payment methods, exchanges, and setting up Withdrawals!

If you have any questions, or need any help in the future please don't hesitate to call/email, between our team members in different time zones, someone is around 24/7

-Charlie

Bitcoin pioneer. An apostle of Satoshi Nakamoto. A crusader for a new, better, tech-driven society. A dreamer.

More about me: http://CharlieShrem.com
BCNA
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September 09, 2011, 03:12:26 PM
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BitInstant: I see on your website that you are having issues with Dwolla.

What are the issues. Is the money safe or are you experiencing Chargebacks??
Gareth Nelson
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September 09, 2011, 03:43:56 PM
 #17

BitInstant: I see on your website that you are having issues with Dwolla.

What are the issues. Is the money safe or are you experiencing Chargebacks??

We have disabled dwolla for now so there is no risk of customers losing funds to my knowledge. However if you have had a dwolla payment gone through to us and not your TH account then please contact support@bitinstant.com with all the relevant details.
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Charlie 'Van Bitcoin' Shrem


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September 09, 2011, 03:44:54 PM
 #18

Our money is always safe, so is yours  Cheesy

We are sorting through some Dwolla issues, it could be nothing or it could be huge, we will let everyone know.

-Charlie

Bitcoin pioneer. An apostle of Satoshi Nakamoto. A crusader for a new, better, tech-driven society. A dreamer.

More about me: http://CharlieShrem.com
epetroel
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September 09, 2011, 04:34:52 PM
 #19

I have an automated arbitrage bot as well using MtGox, Tradehill, CampBX & ExchB.  I imagine there have got to be several other people doing this as well. 

On most days the profits are pretty low - less than 1% after fees with a typical day's trading volume of a couple thousand dollars.

But then you have days like today - traded over 2k bitcoins today just on MtGox Smiley
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Charlie 'Van Bitcoin' Shrem


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September 09, 2011, 04:38:18 PM
 #20

BitInstant: I see on your website that you are having issues with Dwolla.

What are the issues. Is the money safe or are you experiencing Chargebacks??

Dwolla issues are sorted, we are good to go.

Until we enable it on the website, PM me and we can do it manually

-Charlie

Bitcoin pioneer. An apostle of Satoshi Nakamoto. A crusader for a new, better, tech-driven society. A dreamer.

More about me: http://CharlieShrem.com
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