Is it possible to exploit the different prices for BTC on different exchanges? - page 2.

Loophole

hero member

Activity: 619

Merit: 500

Quote from: Reclaim3r on June 05, 2014, 12:37:09 AM

I've noticed that their are small inconsistencies with Bitcoin to USD exchanges, and how the value for BTC appears to be different.

What if, I were to buy 1 Bitcoin from BTC-e for $637.00 and then sell it again on Bitstamp for $643.85?
To me, it looks like it could be pulled off, but how come I've never heard of "exchange jumpers"? People who buy cryptos on one exchange for the lowest price possible and then re-sell on a different exchange, reaping the profits of the small inconsistencies? Is it too cumbersome or are the profits simply not worth it? Why do these price inconsistencies exist on exchanges? Huh

Found the page http://bitcoin-analytics.com/#arbitrage with google search for you.
It shows the price differences for more than 10 different exchanges (in real-time after login, 6 hrs delay otherwise).

Reclaim3r

full member

Activity: 139

Merit: 100

Thank you for all the awesome answers, they all did a great job of explaining things. My last question related to arbitrage is this: Does anybody know a trader who's actually been successful pulling it off with cryptocurrencies?

galbros

legendary

Activity: 1022

Merit: 1000

This is much easier with your altcoin(s) of choice than with bitcoins, but yes you can, yes it happens all the time. The bitcoin market is the most well developed so it offers few opportunities but the altcoin markets since they are so thin offer lots of chances.

Good Luck!

SelbyTsang

hero member

Activity: 577

Merit: 504

Quote from: Reclaim3r on June 05, 2014, 01:27:09 AM

What if I found a crypto with a worthwhile gap?

If there is still a profit after considering all the fees and you have checked that both exchanges work, I don't see any problem.

Quote from: Reclaim3r on June 05, 2014, 01:27:09 AM

And is Arbitrage bad for the cryptoconomy?

Nope.
Arbitrage exists in other markets like forex, and it helps reduce price gap and stabilize the markets.

SelbyTsang

hero member

Activity: 577

Merit: 504

Quote from: dmz241 on June 05, 2014, 12:57:02 AM

There was a scam website doing this. btc-arbs.com or .net I forget the exact website.

It is a .com, and looks like people have lost over 230 btc there.
https://bitcointalksearch.org/topic/m.7127947

SelbyTsang

hero member

Activity: 577

Merit: 504

Quote from: Reclaim3r on June 05, 2014, 12:37:09 AM

I've noticed that their are small inconsistencies with Bitcoin to USD exchanges, and how the value for BTC appears to be different.

What if, I were to buy 1 Bitcoin from BTC-e for $637.00 and then sell it again on Bitstamp for $643.85?
To me, it looks like it could be pulled off, but how come I've never heard of "exchange jumpers"? People who buy cryptos on one exchange for the lowest price possible and then re-sell on a different exchange, reaping the profits of the small inconsistencies? Is it too cumbersome or are the profits simply not worth it?

Don't forget to take the deposit fees and withdrawal fees into consideration.

Quote from: Reclaim3r on June 05, 2014, 12:37:09 AM

Why do these price inconsistencies exist on exchanges? Huh

For bitstamp, international wire transfer in USD costs 0.1% (min $15).
For btc-e, international wire transfer in USD costs 1% (min $20).

This is just one difference, and there are many more differences.

CEG5952

hero member

Activity: 658

Merit: 500

Buy and sell bitcoins,

BTC moves too quick for real arbitrage (e.g. buy BTC on BTC-E, sell on Bitstamp, withdraw fiat and re-deposit on BTC-E). But since the spread narrows and widens, you can take advantage by, for instance, buying on BTC-E, selling on Bitstamp, and waiting for the spread to close before buying and sending back to BTC-E.

Reclaim3r

full member

Activity: 139

Merit: 100

Thank you DolanDuck and dmz241 Wink

What if I found a crypto with a worthwhile gap?
And is Arbitrage bad for the cryptoconomy?

dmz241

hero member

Activity: 519

Merit: 502

There was a scam website doing this. btc-arbs.com or .net I forget the exact website. But think about this. You pull out of btc-e you pay a fee then you transfer into bitstamp you pay a fee. In between you also have pay fee for conversion to fiat. Plus the process of pull and put will take around 60 mins or so on the network. Can you be sure the price difference will still be there? and you can cover all the mentioned fees?

DolanDuck

full member

Activity: 196

Merit: 101

Yep, it is called arbitrage:

In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices.
When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, it is the possibility of a risk-free profit after transaction costs.
For instance, an arbitrage is present when there is the opportunity to instantaneously buy low and sell high.

In principle and in academic use, an arbitrage is risk-free; in common use, as in statistical arbitrage, it may refer to expected profit, though losses may occur, and in practice, there are always risks in arbitrage, some minor (such as fluctuation of prices decreasing profit margins), some major (such as devaluation of a currency or derivative).
In academic use, an arbitrage involves taking advantage of differences in price of a single asset or identical cash-flows; in common use, it is also used to refer to differences between similar assets (relative value or convergence trades), as in merger arbitrage.

Reclaim3r

full member

Activity: 139

Merit: 100

I've noticed that their are small inconsistencies with Bitcoin to USD exchanges, and how the value for BTC appears to be different.

What if, I were to buy 1 Bitcoin from BTC-e for $637.00 and then sell it again on Bitstamp for $643.85?
To me, it looks like it could be pulled off, but how come I've never heard of "exchange jumpers"? People who buy cryptos on one exchange for the lowest price possible and then re-sell on a different exchange, reaping the profits of the small inconsistencies? Is it too cumbersome or are the profits simply not worth it? Why do these price inconsistencies exist on exchanges? Huh

Topic: Is it possible to exploit the different prices for BTC on different exchanges? - page 2. (Read 1480 times)