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All you have to do is keep some money in USD and BitCoin in reserve on all the exchanges. That way you can buy some BitCoin on one exchange and then sell the sa

by Aqueous 13y ago

All you have to do is keep some money in USD and BitCoin in reserve on all the exchanges. That way you can buy some BitCoin on one exchange and then sell the same amount on the other at the same time, and then transfer over at your convenience.

wmf 13y ago
The imbalance is not random; MtGox always has a higher price so your money would be flowing in one direction and you'd end up with all your money in MtGox USD that's very difficult to access.
- Aqueous 13y ago
  It goes in both directions. If you are running low on USD at BitStamp, you just deposit money there (assuming deposits take an acceptable amount of time) and withdraw the same amount from Mt. Gox (which might take a while). You still made money. Are you looking for a never-ending money cycle? You are creating a cyclical process of arbitrage. If arbitrage traders have large enough reserves they should be able to pretty consistently close the gaps, which means your opportunities will be few and far between anyway, giving you plenty of time to prepare. When buying and selling BitCoin becomes more fluid, that is.
  - wmf 13y ago
    There's no cycle if you can't withdraw USD from MtGox at all.
    - Aqueous 13y ago
      Well MtGox clearly has a problem with USD withdrawals, which is why this arbitrage opportunity exists in the first place and doesn't seem to be closing. If they fix the USD withdrawal problem, which I suspect they will do as they start to lose business to the other, better exchanges, expect arbitrage to obliterate the price difference between MtGox and other exchanges.
drakaal 13y ago
If you had a good probability of both exchanges having equal amounts of high and low, you would be right, but if you have to always go in one direction then this "buffer" won't work.
- Aqueous 13y ago
  I mean, right now when the American exchanges are always trailing Mt. Gox, there is a pretty consistent arbitrage opportunity. But assuming Gox gets its act together (a big assumption) arbitrage opportunities could become fewer in the future. Which means you will have plenty of time to fill your reserves back up if a bigger opportunity comes along later.
zwily 13y ago
This works for one trade. Then you need to get your dollars out of MtGox, and it takes a month, and your arbitrage is stalled.
- pbhjpbhj 13y ago
  Sounds like MtGox is hoarding. Seems that if they increase the delay they can cream of a percentage of the money and keep trading and that they benefit from the rising price by paying out slowly. How trustworthy is MtGox?

by Aqueous 13y ago

wmf 13y ago

The imbalance is not random; MtGox always has a higher price so your money would be flowing in one direction and you'd end up with all your money in MtGox USD that's very difficult to access.

Aqueous 13y ago
It goes in both directions. If you are running low on USD at BitStamp, you just deposit money there (assuming deposits take an acceptable amount of time) and withdraw the same amount from Mt. Gox (which might take a while). You still made money. Are you looking for a never-ending money cycle? You are creating a cyclical process of arbitrage. If arbitrage traders have large enough reserves they should be able to pretty consistently close the gaps, which means your opportunities will be few and far between anyway, giving you plenty of time to prepare. When buying and selling BitCoin becomes more fluid, that is.
- wmf 13y ago
  There's no cycle if you can't withdraw USD from MtGox at all.
  - Aqueous 13y ago
    Well MtGox clearly has a problem with USD withdrawals, which is why this arbitrage opportunity exists in the first place and doesn't seem to be closing. If they fix the USD withdrawal problem, which I suspect they will do as they start to lose business to the other, better exchanges, expect arbitrage to obliterate the price difference between MtGox and other exchanges.

drakaal 13y ago

If you had a good probability of both exchanges having equal amounts of high and low, you would be right, but if you have to always go in one direction then this "buffer" won't work.

Aqueous 13y ago
I mean, right now when the American exchanges are always trailing Mt. Gox, there is a pretty consistent arbitrage opportunity. But assuming Gox gets its act together (a big assumption) arbitrage opportunities could become fewer in the future. Which means you will have plenty of time to fill your reserves back up if a bigger opportunity comes along later.

zwily 13y ago

This works for one trade. Then you need to get your dollars out of MtGox, and it takes a month, and your arbitrage is stalled.

pbhjpbhj 13y ago
Sounds like MtGox is hoarding. Seems that if they increase the delay they can cream of a percentage of the money and keep trading and that they benefit from the rising price by paying out slowly. How trustworthy is MtGox?