What’s Causing 2% Bitcoin Premium on Bitfinex? Possibility of Arbitrage

[oksgvardukraine2018]

What’s Causing 2% Bitcoin Premium on Bitfinex? Possibility of Arbitrage

On Bitfinex, a leading cryptocurrency exchange, Bitcoin is being traded with a 2 percent premium based on the current price of $6,285.

As BitMEX Research revealed, the premium of Bitcoin on Bitfinex continued to increase throughout the past week, during a period in which Tether (USDT) started to demonstrate a decline in price.

Currently, on Bitfinex, all traders are requested to purchase or sell major cryptocurrencies like Bitcoin and Ethereum with USDT, due to the suspension of deposits into the exchange’s HSBC banking account.

As the price of USDT fell from $1 to $0.098, by around 2 percent, the premium of Bitcoin on Bitfinex increased by a similar margin.
https://www.ccn.com/whats-causing-2-bitcoin-premium-on-bitfinex-possibility-of-arbitrage/

While someone reasons why, others earn on it

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[franky1]

knew tether couldnt last.

all those people that thought a USDT would always by 1:1 are now seeing the scam play out.. well done to the mighty duck who has syphoned 2% out of everyones dollar. well played

now lets see a bank run. where people still thinking if they sold all their 1tethers they would all get 0.98...
i can see the 'tether' snapping when people realise the mighty duck has actually took more than 2% from the "backed" account

[DooMAD]

Successful arbitrage involves you being able to withdraw your funds.  Seeing as some deposits were halted recently on Bitfinex, you better hope the option to withdraw remains.  Don't put more into an exchange than you're willing to lose.

I'm hoping it's not going to reach anywhere near the same level of seriousness, but it's worth remembering the price on Gox began to rise compared to everywhere else when that exchange started to collapse.  People back then poured more of their BTC into the exchange thinking they would be able to enjoy some arbitrage possibilities and they're still waiting to see if they'll ever see any of those coins again.

[ngm22585]

Not surprised about the Tether drop at all, considering their lack of transparency and the fact that the bank behind it is looking for a buyer.

[Red-Apple]

Successful arbitrage involves you being able to withdraw your funds. 

first thing a successful arbitrage needs is price difference. but there is NO price difference!

what we have right now is like this:
you see bitcoin price is #6426 on one exchange
and you see it is #5557 on another exchange.
this is NOT an arbitrage opportunity because the first number is in USD (Bitstamp) and the second number is in EURO (Kraken).

if you think you can arbitrage this then you can also arbitrage the following:
#6426 and #7120
the first one is USD value of bitcoin on Bitstamp and the second is Tether value of bitcoin on Bitfinex.

prices from preev.com

[DooMAD]

Successful arbitrage involves you being able to withdraw your funds. 

first thing a successful arbitrage needs is price difference. but there is NO price difference!

Good point.  It's not the fiat price of Bitcoin going up, it's Tether losing value and failing to maintain the peg it's supposed to keep to the US Dollar. 

But since Tether is very closely associated with Bitfinex and both share the same CEO and other senior executives, if one has a problem, then naturally so does the other.  Users who hold Tether will also have a problem, as they are effectively creditors to Tether with very few options for recourse if something goes seriously wrong (or if it's already too late and something has gone seriously wrong). 

People need to remember that Tether is more of a company than it is a cryptocurrency and you're placing a large amount of trust in that company when you store your wealth in USDT.

[snipie]

USDT = 0.964 USD now in coinmarketcap. It is panic time! I expect to see people selling what they have in tether and move their funds to another cryptocurrency, if it doesn't already happened with bitcoin recent rises

[NeuroticFish]

first thing a successful arbitrage needs is price difference. but there is NO price difference!

Well, if you look at bitcoinwisdom.com charts Bitfinex shows 6943.8$ (+/- some satoshi) and Bitstamp 6405.93$ (+/- some satoshi).
So there is a difference for some markets, both in USD, it seems. The more interesting part is that a "difference" between the two exchanges is there for more than a week now.

Edit: I've found out the reason behind Bitfinex prices from another thread.

[figmentofmyass]

Good point.  It's not the fiat price of Bitcoin going up, it's Tether losing value and failing to maintain the peg it's supposed to keep to the US Dollar. 

it's both. that's the frustrating thing about trying to approach this from the perspective of fundamental analysis. we know that price is rising on bitfinex and USDT markets because buying is the only way to exit those markets.

but price is also rising on the other exchanges. if it were based purely on the inability to withdraw fiat, we would expect price to rise on bitfinex and fall on the other exchanges---because some people are buying crypto on bitfinex (or binance etc) to dump on other exchanges.

instead, price across exchanges is still following bitfinex's upward trajectory.

People need to remember that Tether is more of a company than it is a cryptocurrency and you're placing a large amount of trust in that company when you store your wealth in USDT.

holding USDT is exactly the same as holding USD on bitfinex. it's redeemable there and issued by the same company. that's the way i view stablecoins: like fiat balances on exchanges, they are IOUs from the issuing exchange.

[pooya87]

in the end this is going to be a very good thing no matter what happens. people have been starting to truly believe that USDT and USD are the same. from about a dozen topics that were created in the past days you can see that they are all talking about price of BTC/USDT as if it is price of BTC/USD. some are even excited and call this a "rise".

hopefully by the end majority of people start knowing that tether is also another altcoin and has similar risks to any other altcoin and it also has the centralization disadvantage and the risks that come with that.

[Wind_FURY]

first thing a successful arbitrage needs is price difference. but there is NO price difference!

Well, if you look at bitcoinwisdom.com charts Bitfinex shows 6943.8$ (+/- some satoshi) and Bitstamp 6405.93$ (+/- some satoshi).
So there is a difference for some markets, both in USD, it seems. The more interesting part is that a "difference" between the two exchanges is there for more than a week now.

Edit: I've found out the reason behind Bitfinex prices from another thread.

Maybe someone should make a topic that's following Bitfinex's cold storage wallet to indicate how much of their reserves are falling. Hahaha.

[DooMAD]

holding USDT is exactly the same as holding USD on bitfinex. it's redeemable there and issued by the same company. that's the way i view stablecoins: like fiat balances on exchanges, they are IOUs from the issuing exchange.

Is it exactly the same, though?  Aside from the obvious point about 1 USDT being currently worth ~$0.97 instead of $1.00, I mean.  The terms and conditions set by Tether seem to point to them not being equal at all.  If the peg fails dramatically and USDT value tanks versus the dollar, then they are not the same as holding USD.  No one appears to be covering that potential loss of value in the eyes of the law.

[Red-Apple]

first thing a successful arbitrage needs is price difference. but there is NO price difference!

Well, if you look at bitcoinwisdom.com charts Bitfinex shows 6943.8$ (+/- some satoshi) and Bitstamp 6405.93$ (+/- some satoshi).
So there is a difference for some markets, both in USD, it seems. The more interesting part is that a "difference" between the two exchanges is there for more than a week now.

Edit: I've found out the reason behind Bitfinex prices from another thread.

Maybe someone should make a topic that's following Bitfinex's cold storage wallet to indicate how much of their reserves are falling. Hahaha.

i honestly don't see any kind of different or new behavior in their cold known storage address. https://bitinfocharts.com/bitcoin/address/3D2oetdNuZUqQHPJmcMDDHYoqkyNVsFk9r
it still has the same amount of bitcoin with more or less similar access (deposit/withdraw) from it.

[Wind_FURY]

first thing a successful arbitrage needs is price difference. but there is NO price difference!

Well, if you look at bitcoinwisdom.com charts Bitfinex shows 6943.8$ (+/- some satoshi) and Bitstamp 6405.93$ (+/- some satoshi).
So there is a difference for some markets, both in USD, it seems. The more interesting part is that a "difference" between the two exchanges is there for more than a week now.

Edit: I've found out the reason behind Bitfinex prices from another thread.

Maybe someone should make a topic that's following Bitfinex's cold storage wallet to indicate how much of their reserves are falling. Hahaha.

https://bitinfocharts.com/bitcoin/address/3D2oetdNuZUqQHPJmcMDDHYoqkyNVsFk9r

Thanks for the chart.

Bitfinex's balances in Dollars and Bitcoins are down since the first week of September, and it might continue. Bitcoins are also still trading at a premium.

But I sincerely hope that they will get through their problems. They were against XT, Classic, Unlimited, and S2X which makes them "ok" for me as long as they are not stealing from their users. Haha.

[Wind_FURY]

Yes you can, by trading them for Bitcoin. Bitfinex users cannot get enough of Bitcoin the other day that it caused a massive price surge. Hahaha.

Are there any Bitfinex users? How are the Bitcoin withdrawals?

[Globalbitcoinl]

thank you for the idea, because it will allow many to take a breath and earn while the cryptocurrency is not stable

[vonnyaries]

arbitage is possible in cryptocurrency, as we know bitcoin have the different price in each market, and we can do arbitage between market, but we should know that bitcoin arbitage is very risk, the fee is high and i think if you buy in bad time you will get some losses

[Herbys]

Bitfinex returned deposits in cash, but users continue to report delays in processing transactions. Perhaps this is due to rumors about the suspension of relations with its banking partners and the sale of USDT?