Turbulence at Mt. Gox Creates Arbitrage Opportunities For Bitcoin Traders

http://www.thegenesisblock.com/turbulence-at-mt-gox-creates-arbitrage-opportunities-for-bitcoin-traders/

by cgi_man • 13 years ago

19 7 13 years ago

clarkm• 13 years ago

They're not actually arbitrage opportunities because there's no liquidity. All these exchange hang-ups are why the spreads look so unbalanced, and it's not like traders aren't racing incessantly to correct it.

Unless you have fiat in all the exchanges, bank accounts in multiple countries, and large amounts of cash on hand, you don't really have a chance here. Like most amateur arbitrageurs, you'll just going to end up in the red after all the delays and fees.

CrunchyJams• 13 years ago

Sort of. Arb means risk free and cost free gains, so this could still count. Lower liquidity could be considered a risk, but some people would take the gains and not care about immediately cashing out, esp since you could trade back to BTC once prices normalize and cash out on the alternate exchange before the withdrawal hiatus is even over.

The bigger issue is the funding costs across exchanges, but the fact that it goes down between events signals that arb-neutral differential is lower than during the event-driven spikes he points out.

shtylman• 13 years ago

No it doesn't. If you can't actually get your money into/out of the exchanges then you can't execute on the arb. Just because you see crossed books doesn't mean you can actually make money on it.

noname123• 13 years ago

Can someone make an ETF for Bitcoins please? This would help liquidity a lot IMO and also help the competition of the exchanges to get rid of the above-the-market withdrawal fees.

I'm thinking not even a real ETF as in having real market participants that can redeem shares. Even if someone can incorporate a small corporation, have a initial offering of a million shares at 10 dollars. That's a $100 million dollar worth of BTC that one can trade in the over the counter market. I don't mind paying the 0.5% administration fee whatever.

Reddit thread where people discuss this idea: http://www.reddit.com/r/Bitcoin/comments/19hxuv/bitcoin_etf/

EDIT: Apparently, there are already shell companies listed on OTC for sale so that one can simply take over their tickers instead of filing all of the paper-work.

http://www.mergernetwork.com/index/public-shell-companies-fo...; Can someone buy one and then maybe put another 100K worth of Bitcoins as assets? Or raise funds via Kickstarter?

contingencies2• 13 years ago

Check out http://kraken.com/ which is currently in beta.

(Disclaimer: Owned by my employer... but 2+ years development, it should bring something new to the area.)

maaku• 13 years ago

What does margin trading have to do with an ETF?

Turbulence at Mt. Gox Creates Arbitrage Opportunities For Bitcoin Traders

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