I dont beleive what Arthur Hayes, CEO and co-founder is saying here will happen in a million years:
“These regulations are going to make some savvy traders a lot of money. Because there is a premium placed on privacy, the ‘clean’ coins trading on exchanges with BitLicenses will trade at a discount to coins trading on exchanges that operate in more laissez-faire jurisdictions. Traders with the ability and risk appetite will be able to arbitrage the price differential.”
“These regulations are going to make some savvy traders a lot of money. Because there is a premium placed on privacy, the ‘clean’ coins trading on exchanges with BitLicenses will trade at a discount to coins trading on exchanges that operate in more laissez-faire jurisdictions. Traders with the ability and risk appetite will be able to arbitrage the price differential.”
If there is a differential, then arbitrage will almost certainly occur.
Of course, arbitrage is self-correcting, which will eliminate the differential.
Those engaging in arbitrage will buy cheap bitcoins in NY, and the increased demand will drive the exchange rate up.
Those engaging in arbitrage will sell expensive bitcoins outside NY, and the increased supply will drive the exchange rate down.
Eventually the rates at exchanges inside and outside New York will approach an equilibrium where the only difference remaining is due to the costs of moving money back and forth between the exchanges inside New York and those outside New York. There will still be a slight variation with New York being slightly lower, but the difference will be so small that the arbitrage opportunity will be effectively eliminated most of the time.
