Topic: MtGOX exchange rate artificially high - page 2. (Read 3547 times)

It's funny, because all the noobs assumed that the dwolla freeze would drive price DOWN, WAY DOWN.

However, it is well known by most of us that some of the price difference in exchanges is due to ease/difficulty in getting USD in or out. For instance. BTC-e was always typically lower, and I'm sure the difficulty in getting USD in partly contributed to the imbalance on the buy side. And Bitfloor was INCREDIBLY easy, one simply had to walk into mordor bank of america and cash deposit, you had your USD ready to trade in 30 minutes. Bitfloor price tended to be a few dollars higher than Gox price at all times. Other exchanges also presented unique arbitrage opportunities depending on their funding methods.

Right now, we might be seeing a very slight buy/sell imbalance at Gox due to the Dwolla freeze.

But since the Gox price is used the most as reference, due to the liquidity, Department of Homeland Security's actions potentially (depending on if you believe there is an imbalance) caused the price of BTC in the most-referenced market to rise. And even if people are selling on other exchanges - it won't offset the increase because people on other exchanges have an interesting tendency to look to the Gox price for reference and confirmation of trend analysis. Gox price pulls other exchanges, rather than vice versa. Very interesting situation we have.

Noobs were wrong. I was right. What else is new?

Oh, don't forget that Gox is usually higher than the other exchanges anyways. So maybe we're just reading into this a bit too much, folks

can't they wire the money???

It was like this for most of the big rally, Mt.Gox tends to lead price.

Arbitrage is feasible, and it closes the gaps.

Yeh noticed that too. I'm sure it'll quickly make itself less apparent as people catch on

Check out the exchange rates, gox is substantially higher that the other exchanges:

http://bitcoinity.org/markets/list?currency=USD&span=24h

With the Dwolla account freeze, people with money at gox who rely on dwolla can buy btc and move it out, but they can't sell for USD and get their money out of the exchange. Thus, more people buying bitcoin, resulting in a higher price.

Good arbitrage opportunity for gox account holders who don't rely on dwolla.