Ask HN: Why doesn't arbitrage appear to equalize the bitcoin market?

3 points by jankins 12y ago ↗ HN

At this time, Bitstamp lists btc at $102.98 usd, and MtGox lists it at $118.88220 usd. Why are the markets so inefficient that the gap is so large? Is it a volume issue? Bitstamp lists the 24h volume at 20459 BTC, and MtGox at 53187 BTC, so between the two there's about 9 million dollars of btc trading hands per day.

Is it that the potential profit at the current volume levels is too low, or the potential profit at the currently imposed marketplace limits is too low, or is it that dollars-to-bitcoin transactions take too long to complete to successfully cash in on the difference, or is it something else?

I'm very interested in bitcoin and would be fascinated to hear any theories/explanations.

2 comments

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david4096 12y ago ↗

Mt. Gox premium is due to the delay and difficulties of getting USD out. This makes arbitrage difficult if not impossible.

jankins 12y ago ↗

That makes sense, thanks. I wonder if a window of opportunity could open up if Mt. Gox service improves, or if there's a price difference at which arbitrage would become plausible. I did notice there's only a cent difference between the current Coinbase and Bitstamp prices. Just academic thinking, I don't think I'll be playing the market any time soon.