4 ms·
huh, you give an analogy w/ out actually explaining how this would happen.
by mdgrech23 9y ago
huh, you give an analogy w/ out actually explaining how this would happen.
- sb8244 9y agoI think that poster does explain how it happens. The exchanges tend to shut down or break during extreme volatility events. If one breaks and the other doesn't, you're half in the market. What if you can't sell your positions until after the price drops, but the other position doesn't exist to balance it out?
- nugget 9y agoWith cryptocurrencies you also have other exchange risks, notably the risk an exchange is hacked or otherwise goes out of business. Imagine if you had been buying BTC on Coinbase and selling BTC on MtGox in 2013, making a great profit (on paper) through arbitrage, until MtGox tanked and all those profits were frozen.
- nmat 9y agoI thought it was pretty clear. In a high traffic scenario some exchanges break and your order doesn't go in. To profit from this system you need both orders to be posted almost at the same time. If one exchange lags for minutes/hours you risk losing money with your other position, ie, you get bulldozed.