Re:Blackbird: Bitcoin arbitrage
by FabHK on Saturday December 23, 2017 @02:56PM
(#15995946)
> this work ONLY if bitfinex has higher price than other exchange
Bitfinex might well have higher BTC/USD. However, the reason is that people can't get USD off Bitfinex, and so buy BTC to get those off Bitfinex. Thus, if you try to do the arb, you buy BTC cheaply on exchange X (for USD), then sell BTC (simultaneously) expensively on Bitfinex (getting USD).
Now, to realise your paper gains, you either have to wait for the BTC price to converge and then unwind the trade backwards, and have some money left, or you have to get the USD off Bitfinex. But you can't. That's why the price of BTC was so high there in the first place.
Bitfinex might well have higher BTC/USD. However, the reason is that people can't get USD off Bitfinex, and so buy BTC to get those off Bitfinex. Thus, if you try to do the arb, you buy BTC cheaply on exchange X (for USD), then sell BTC (simultaneously) expensively on Bitfinex (getting USD).
Now, to realise your paper gains, you either have to wait for the BTC price to converge and then unwind the trade backwards, and have some money left, or you have to get the USD off Bitfinex. But you can't. That's why the price of BTC was so high there in the first place.
TL;DR: Arb is not trivial.