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Blackbird: Bitcoin arbitrage

(github.com)
298 points vega_empire | 1 comments | 23 Dec 17 12:39 UTC | HN request time: 0s | source
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rdslw ◴[23 Dec 17 16:14 UTC] No.15994727[source]▶
I'm sad at the quality level of comments on this discussion. Lot of people are commenting clearly without reading EVEN the readme.md of the linked post.

This tool advantage relies on the fact that NO bitcoin needs to be moved, so all posts about long time of btc transfers make (almost) no sense.

On the other side only ONE (so far) person mentioned (importantly) that it works only on bitfinex, and even him didnt clearly wrote that this work ONLY if bitfinex has higher price than other exchange (reducing arbitrage opportunities by half), because you can short btc only on bitfinex.

Where is HN from 5 years ago? :(

replies(5): >>15994873 #>>15995278 #>>15995418 #>>15995946 #>>15995968 #
1. FabHK ◴[23 Dec 17 19:56 UTC] No.15995946[source]▶
> 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.

TL;DR: Arb is not trivial.