3 ms·
Why is the fact that arbitrage is harder with btc a disadvantage? And the fact that the "price" reflects recent sales rather than future sales seems, well, obvi
by bagacrap 9y ago
Why is the fact that arbitrage is harder with btc a disadvantage? And the fact that the "price" reflects recent sales rather than future sales seems, well, obvious, and identical to other securities/commodities.
- davidgerard 9y agoIt makes the price stupidly volatile, and the thin per-exchange order books make it much more manipulable.
- dragonwriter 9y ago> Why is the fact that arbitrage is harder with btc a disadvantage Arbitrage is the method by which segregated markets are aggregated into a single market with a common price; if that is harder you have segregated markets. > And the fact that the "price" reflects recent sales rather than future sales seems, well, obvious, and identical to other securities/commodities. The same issue is raised with commodity/security markets in general, but it's practically more significant when the market(s) for a product have significant liquidity issues.
- user5994461 9y agoArbitrage involves moving large amount of volume and transactions. Arbitrage is not effective on bitcoins because there is too much risk with trading bitcoins. To reply to your question. The problem is that the bitcoin market is plagued with deep issues. Arbitrage is hard in such an environment, that's the consequence, not a cause. To make an analogy. Think of a sea, a sea always have fishes. If there are no fishes at all in a sea, the problem is unlikely to be the fishes. Fishes are simple animals living day to day (just like arbitragers). Most likely, the problem is with the sea, maybe it's super polluted and killed all the fishes?