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Historically, exchanges that are failing have significant spreads from stable exchanges (Mt. Gox comes to mind). So, there is risk with this strategy. One of
by ns8sl 10y ago
Historically, exchanges that are failing have significant spreads from stable exchanges (Mt. Gox comes to mind).
So, there is risk with this strategy. One of the exchanges could fail and you lose everything you have on that exchange.
- butor 10y agoThis is correct. That's why I specified market risk. Of course not all the risks are overcome.
- ns8sl 10y agoI know. I'm pointing out that seemingly profitable arbitrage opportunities carry very significant risks besides market risk.
- gricardo99 10y agoI agree. Exchange failure is generally something separate from "market risk", and is sometimes categorized as "counterparty risk". With bitcoin, counterparty risk with exchanges is a very real thing, and an added risk beyond what would be considered "market risk" (i.e. asset price fluctuations).