I found an arbitrage opportunity with cryptocurrency a few years back, but it took two months to convince my friend to let me run the trading bot I cobbled together to exploit it on his account (and that whole time I was waiting for my accounts to get approved..)

It magically generated about $8000 in a couple of days, and then the market came crashing down and the inefficiency it was exploiting disappeared forever

Pretty **ing frustrating, and it's all the Efficient Market Hypothesis' fault

You should look up the debates that Warren Buffett has had with people about the EMH, it's insane

Well in hindsight that sounds like you got compensated for the risks you took. Especially since you didn’t say $8000 out of how much moved…

What was the arbitrage? I figure if it doesn't work anymore, no loss in sharing

Ah, nobody will ever share any details of an arbitrage opportunity if they find one, since you're competing on a single global market with everyone else who knows how it works

I'm hoping that whoever snatched this up won't be ready to grab it quickly if it ever reappears someday

Yes as a theoretical construct the concept is totally fine. But speaking as someone who has heavy exposure to mainstream academic economics it’s usually taken way way further than that.

There’s a concept called the EMH and I think there’s a very strong tendency in Econ and pop culture to skip ahead and assume the hypothesis is basically true most of the time, often in the face of painfully obvious evidence to the contrary.