Topic: The question everybody is asking but nobody has shared the solution to yet (Read 4093 times)

i have a theory that this actually stabilizing the market until the next run up, sounds perverse ... just when you thought you were out...


https://www.youtube.com/watch?v=242H7F8DKHA

Most EUR exchanges, e.g. bitcoin.de and Bitcurex, are somewhere between MtGox and Bitstamp now.  Back up after being on Bitstamp level for a while.  Could be due to the difficulties many have when trying to deposit money at Bitstamp after the flagging of their account.

No, the account has to be in your own name.  Your cousin could open a MtGox account, and you can transfer BTC to him for him to sell and withdraw.

Bitcoin exchanges are not traditional markets.  Traditional markets for currency exchange is banks, and only open during the banks opening hours.  There are plenty long arbitrage possibilities in Bitcoin.  Between exchanges, and even local to multi-currency exchanges.  You do not have to go far from the banks to find arbitrage opportunities which are more risky to exploit.  E.g. my stock example.

I would like to point to this here as well.  Do you really believe Bitcoin exchanges are even remotely close to banks in terms of liquidity?

This is funny, because here you claim it is about lack of trust, not low liquidity.  You even moved the Coinlab rectangle two weeks to the right because the facts didn't fit your theory.

Now, here you have a point.  Due to one of the easiest arbitrage exchanges for buying right now are operating in obvious violation of the law, I don't want to risk much money there.  Neither does anyone else, which you can easily see from the depth of their order book.  Keeping millions of dollars there (unless you mean Zimbabwe dollars) is completely out of the question.  And they don't allow me credit, like the markets you are comparing with do.  This of course limits my own arbitrage possibilities.

Eh?  No.  You are ignoring a large number of facts here.  How much experience do you have with real life arbitrage trading?  Any at all?  Read a little about it on the internet, perhaps?  Not quite understanding all the basics?

Taking out a 0.1% arbitrage possibility in the Bitcoin markets will make you lose money.  Come back when you can explain why.  People have no problems cashing out six figures of USD or EUR from MtGox, and JPY withdrawal has never been limited.  I guess most of them will be careful of placing a six digit amount of USD on an exchange operating on borrowed time to take out a limited amount of arbitrage.

Is it possible to withdraw JPY from Gox to a local Japanese bank account which is not in my name? I have a cousin with a Japanese bank account but I have a feeling the name thing may be an issue.

When bitstamp overtake as market leader the spread is reduced, look @ a small scale example of vircurex - you cant withdraw USD from here yet price matches bitstamp

Nope.  Those arb opportunities, in traditional markets, only occur for a fraction of a second.  There are no long arb opportunities unless there is something broken with the market or with liquidity.  In the case of Gox you are looking at both.  As for your example of currency rate fluctuation, arb opportunity is taken advantage of near instantly.  Just because your arb bots are running out of cash due to your low cash flow, doesn't mean that there isn't someone with millions of dollars of liquidity who could take advantage of the arb opportunity before depleting funds.  Unless there was no way they could effectively move out their holdings, which I discuss in this thread: https://bitcointalksearch.org/topic/m.2972810.  The reality is that Gox can't support large outflows of cash, this is proven by the existing spread.  No large player can take advantage of the arb opportunity, otherwise the spread would be 0%.  Therefore, this arb opportunity will exist and spread larger and larger as users on Gox realize that they can't actually cash out large sums.  

So how do you explain the identical trades in opposite direction on MtGox and Bitstamp at exactly 8% price difference for days?
Does writing two arbitrage bots operating in several currencies count as a fraction of knowledge?   Their problem is that they keep running out of fiat on one side, which takes time to move.  Time means the market isn't entirely liquid.  This won't change until all exchanges work as banks as well, with the possibility to borrow fiat and BTC.  There is a fine balance to maximize the profit without running out of funds.  (Which they do all the time – moving funds fast enough is impossible when it has to happen through banks and the markets are open 24/7.)  Arbitrage opportunities can exist in other markets as well, for a relatively long time, when the market isn't entirely liquid.  E.g between stocks in the same company on different exchanges operating in different currencies when currency rates fluctuate.

Im happy to move out of gox & take my business elsewhere when the price is closer, although im not sure any other trading platform is safer.  I'm not happy if gox instantly dies & governments steals several mil of crypto community investment.  I will look into what you've said in other thread.

The higher the gap the more you make on Arb.   There are some very fishy high sized BTC sell orders popping up @ BTC-e to keep the price down.... they are completely out of context for BTC-e from what i've seen over many months trading.

I thought you were a successful Arber tbh or you just want gox dead?  because you know if gox dies instantly so does a ton of crypto investment.  If the spread is equal many can move out of gox.

You wouldn't waste the opportunity on 10% when 20% is in sight, would you?  Arbitrage bots have a trigger point.  The difference between Bitstamp and MtGox was exactly 8% or below for days, and it seems a higher difference triggered a bot to trade on both exchanges.  The panicing hoardes probably exceeded the financial capacity of this bot, and it ran out of funds, which made the max 8% difference end abruptly.  Expect it's trigger point to be raised when it is funded again.  I'm sure the bot could make profit on 5% or 3% as well, but it would run out of funds faster then and miss better opportunities later.

There is an idiot born every minute, and all of them seems to be busy giving their money to arbitrageurs now.  The amount of money given away is so high, not many people have the capital needed to hold the spread stable.  As more people get into the game, the difference will go down and become more variable with highs during weekends (no new money getting in or out of exchanges, but BTC may move).

all good by me, if i can get my sepa transfers from mtgox later this week, i'm happy to make 20% :p

Has anyone addressed the obvious question of it arbitrage opportunities have existed for 2 months, why hasn't someone taken full advantage of it?  They haven't because the spread still exists between exchanges, and is growing larger and larger.   

Very easy.  MtGox has one orderbook.  (With some currency conversion quirks which can be confusing when you try to understand them, but there is really no need since it is transparent to the users.)  All BTC offered in all currencies are available in all other currencies as well.  The JPY order book is just as deep as the other order books.

Right, so you need to sell BTC for Yen at gox. How would that work with the current market depth?

Yes, you have missed it.  JPY is a convertible currency.  Any other convertible currency, e.g. EUR or USD, will do.

Hes not using USD nor is he from the US, and you can just wire the Yen SWIFT from your Japanese bank account directly to Bitstamp where it will be converted at nearly spot market rate into USD for trading into bitcoins at a 20% profit.

Then transfer bitcoins to gox, sell, and repeat.

Really simple actually.

I may have missed it, but how exactly is this grand plan supposed to work? Funds are stuck at gox. You cannot withdraw USD. You want to withdraw Yen. To sell coins for Yen, you need to find somebody to buy them, paying Yen. Who would that be?

btcchina price is 522 cny (102 $)

You can come to China to buy Exchange

How many would you like to buy, how close to Gox price are you willing to pay, and how will you get your payment to the seller?