This violates the law of one price. Gox, sell on Mt. Gox, transfer money back to Bitstamp. As of today, after a few weeks of speculation and massive price discrepancies between the other exchanges, Mt. Gox has taken down their website. Some sources are citing over , BTC as lost. A joint letter from some of the larger bitcoin companies indicates that Mt.
Gox will file for bankruptcy and is insolvent. Buying on Bitstamp will require you to have money in a Bistamp account that has been verified. Verification involves waiting a few days while someone, somewhere looks at some very personal information from you a passport, income tax form, utility bill, etc. At this point, you need to transfer funds to Bitstamp. While this carries only a modest 0.
In many cases it will cost you some money on your side, since it will be an international wire transfer. Once the funds do hit your account, look for a 0. Up to a week. Near instant once funded. Transferring BTC is the fast and easiest part of this. While there are sometimes small fees for processing the transaction, they are currently minuscule; hence two of the main reasons people are so excited about bitcoin. Selling BTC on Mt. Gox is relatively easy. Transfer the money back to Bitstamp.
An international withdrawal will cost you JPY on Mt. Gox, if it goes through. And we already know to expect about 0. Many people have written me to say that this is overly optimistic. Indeed it appears transferring USD out of Mt.
Gox has become incredibly unreliable. CoinDesk is currenty running a poll on Mt. The results should be interesting, and they will most likely be worse than the assumptions above. What about the next trade, the one we will hopefully be making the money on? That requires a look at the market depth chart, which is a visualization of the order book. This shows you how much is for sale asks or to buy bids at different price levels. But this will hit you on both sides buying and selling.
This hits you on both sides, and will be more extreme in markets with less volume. These two properties of the market reduce your arbitrage from 2. Giving it a try.
And you might be able to take advantage of it. But even to achieve the 1. The four of these things together make the perfect scenario impossible. Taxes alone will reduce your take by up to half. And while the addition of currencies, altcoins, and more exchanges creates more scenarios, the problems highlighted at each step fees, timing, limits, and depth increase more than proportionally.
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