Bitcoin arbitrage, pros and cons, experience and profitability

[Gianluca95]

In this time, with a simple movement between two or three exchange, your gain not beat the 2% 

[hodap]

In this time, with a simple movement between two or three exchange, your gain not beat the 2% 

Where there is easy profit, it will be exploit to the full extend by traders.

[AnswerQuestion]

The basic problem with Bitcoin arbitrage is that you need at least two non-flaky exchanges.  Ones where, when you tell them to wire transfer money out, they do so, immediately, every time.

Could not agree more. The same things goes for banks.

You also need exchanges that can/will transfer bitcoin out right away and exchanges that will accept bitcoin deposits with as few confirmations as possible.

[itod]

You also need exchanges that can/will transfer bitcoin out right away and exchanges that will accept bitcoin deposits with as few confirmations as possible.

Thi is interesting. Is there any table comparing exchanges by these two factors, especially number of confirmations they require?

[Benjig]

You also need exchanges that can/will transfer bitcoin out right away and exchanges that will accept bitcoin deposits with as few confirmations as possible.

Thi is interesting. Is there any table comparing exchanges by these two factors, especially number of confirmations they require?

Yeah i would like to see an exchange that accept deposits with like 2 confirmations, we can talk in amounts lower than 5 bitcoins, i mean is it necessary to wait 3 confirmations?

[hodap]

You also need exchanges that can/will transfer bitcoin out right away and exchanges that will accept bitcoin deposits with as few confirmations as possible.

Thi is interesting. Is there any table comparing exchanges by these two factors, especially number of confirmations they require?

Yeah i would like to see an exchange that accept deposits with like 2 confirmations, we can talk in amounts lower than 5 bitcoins, i mean is it necessary to wait 3 confirmations?

6 confirmation is considered very safe for a transaction. Lesser number of confirmation depend on the hash rate distribution of the mining pools.

[HerrAndreas]

arbitrage is something you do, not invest in.

why?
well because as soon as you factor in the current risk factors in the btc world you may consider yourself lucky or rich beforehand if you make any relevant profit from it.

If you simply ignore the possibility of exchanges unexpectedly going temporarily or permanently offline the math does work in times of higher volatility than we currently have.
Right now trading volume on usd and euro accessible exchanges is simply too low to make enough to pay employees and yourself with only the fees you can charge for using someone elses money for arbitrage.

Because in principle if people invest in you arbitraging with their funds is nothing more than a credit you take at an insane return-rate.

super short: money does not grow on trees.

Waiting for this thing to blow up anytime soon.

[HerrAndreas]

All true but for the last couple of weeks, the spread between major exchanges is between 2-3%. This leaves a lot of space for arbitrage.
When you factor in trading BTC for alt currencies, the entire story becomes even more interesting. ATM it is definitely profitable.

That may be true for hi-lo extremes, but there is only so much volume you can squeeze through the exchanges at anything even close to these rates. 
As every arbitrage trade couple is bound to cause a price correction the "wiggle-room" for arbitrageurs decreases with every arbitrage trade. You can adress these issues with certain trading patterns (e.g.: iceberg or hidden trades) and delay those effects but you can not stop the prices to be pulled towards another by your trading all together.

This has a direct influence on the maximum volume which can be realised in arbitrage trades, or in other words:
it puts a hard limit on the scalability.

While a few can make relevant profits on arbitrage, the profit decreases with increasing volume at work.

That is why I don´t see arbitrage as an investement vehicle to be sustainable in any way. It does not make any economic sense.
Unless you play it very risky and use 2 or more exchanges allowing you to trade on leverage and use your customers funds as security.
That is bound to blow up in your face sooner or later.

[Nagle]

You also need exchanges that can/will transfer bitcoin out right away and exchanges that will accept bitcoin deposits with as few confirmations as possible.

Getting either Bitcoins or money into Bitcoin exchanges is not the problem. Trouble is always on the withdrawal side. Bitcoin confirmations take, at worst, hours. Withdrawals can take from days to forever.

[crazyivan]

You also need exchanges that can/will transfer bitcoin out right away and exchanges that will accept bitcoin deposits with as few confirmations as possible.

Getting either Bitcoins or money into Bitcoin exchanges is not the problem. Trouble is always on the withdrawal side. Bitcoin confirmations take, at worst, hours. Withdrawals can take from days to forever.

So dont use Bitcoin, trade some other faster coin, this ll take care BTC confirmation part. Also, do not trade crypto to fiat but crypo to crypto and cash out only when u are done with trading. This should speed up the
process even more.

[doggieTattoo]

You also need exchanges that can/will transfer bitcoin out right away and exchanges that will accept bitcoin deposits with as few confirmations as possible.

Getting either Bitcoins or money into Bitcoin exchanges is not the problem. Trouble is always on the withdrawal side. Bitcoin confirmations take, at worst, hours. Withdrawals can take from days to forever.

So dont use Bitcoin, trade some other faster coin, this ll take care BTC confirmation part. Also, do not trade crypto to fiat but crypo to crypto and cash out only when u are done with trading. This should speed up the
process even more.

Any alt coin is going to much much less secure then bitcoin so when you send it you will have an even greater chance that the TX will be reversed.

[crazyivan]

You also need exchanges that can/will transfer bitcoin out right away and exchanges that will accept bitcoin deposits with as few confirmations as possible.

Getting either Bitcoins or money into Bitcoin exchanges is not the problem. Trouble is always on the withdrawal side. Bitcoin confirmations take, at worst, hours. Withdrawals can take from days to forever.

So dont use Bitcoin, trade some other faster coin, this ll take care BTC confirmation part. Also, do not trade crypto to fiat but crypo to crypto and cash out only when u are done with trading. This should speed up the
process even more.

Any alt coin is going to much much less secure then bitcoin so when you send it you will have an even greater chance that the TX will be reversed.

Don`t get this comment, would you pls clarify.

[bigasic]

2 years ago or so when btc was sub 10 dollars, arbitrage was da bomb. I made a killing doing this. (too bad I cashed out most of my coins before da boom) now, the risk is too high and the swings aren't as big as they used to be. today a  5 percent swing is huge, back then, a 30 percent swing was all in days work...ahh the good ole days..

[crazyivan]

2 years ago or so when btc was sub 10 dollars, arbitrage was da bomb. I made a killing doing this. (too bad I cashed out most of my coins before da boom) now, the risk is too high and the swings aren't as big as they used to be. today a  5 percent swing is huge, back then, a 30 percent swing was all in days work...ahh the good ole days..

I still think liquidity is the main problem. Price volatility is still there, there are days with 3-4% or more difference between exchanges. Getting sufficient liquidity while maintain those prices is a real challenge.

[cryptofan5]

I think there are a few arbitrage bots available. I think I saw some offered even on this forum. All you need is to find 2 or more exchanges with a price difference and to adjust the bot to them.

[joesmoe2012]

Just remember if you are going to try doing arbitrage to start with small amounts for a while so you can see all the downfalls without losing much money.

[Indacoin]

Hey guys, we invite you to test arbitrage on our trading platform. As far as we one of the few services that let people purchase bitcoins & litecoins with a credit card, we have rather more buyers than sellers. Thats why our price is usually higher than on the major exchanges
After you sell cryptocurrency, you can withdraw money to Okpay.
https://indacoin.com/trade

[TwinWinNerD]

Hey guys, we invite you to test arbitrage on our trading platform. As far as we one of the few services that let people purchase bitcoins & litecoins with a credit card, we have rather more buyers than sellers. Thats why our price is usually higher than on the major exchanges
After you sell cryptocurrency, you can withdraw money to Okpay.
https://indacoin.com/trade

Yeah, high fees of CCs don't go well with the concept of arbitrage. Just saying.

[Indacoin]

Hey guys, we invite you to test arbitrage on our trading platform. As far as we one of the few services that let people purchase bitcoins & litecoins with a credit card, we have rather more buyers than sellers. Thats why our price is usually higher than on the major exchanges
After you sell cryptocurrency, you can withdraw money to Okpay.
https://indacoin.com/trade

Yeah, high fees of CCs don't go well with the concept of arbitrage. Just saying.

obviously our post was regarding selling bitcoins through the exchange and to deposit bitcoins you dont pay anything

[michaelwang33]

Hey guys, we invite you to test arbitrage on our trading platform. As far as we one of the few services that let people purchase bitcoins & litecoins with a credit card, we have rather more buyers than sellers. Thats why our price is usually higher than on the major exchanges
After you sell cryptocurrency, you can withdraw money to Okpay.
https://indacoin.com/trade

This doesn't make any sense. Most sites that sell bitcoin via a Credit Card actually sell bitcoin and are not actually an exchange. The difference in the exchange rate is profit for the site in exchange for taking the risk of credit card fraud.