You buy one bitcoin, you send it to Bitfinex, you sell it for eth…. profit?
Bitfinex is currently seeing massive premiums. Bitcoin has crossed $6,000 there. BCH, or BAB as CoinMarketCap still has it, is above $300. ETH is circa 5% higher. Even EOS is getting some finex love.
People are obviously converting their dollars or USDT into cryptos and presumably are taking them out of Bitfinex.
Volumes there have dropped considerably. While once Bitfinex managed $1 billion for just bitcoin, now it has circa $160 million in trading volumes for all cryptos.
Even Coinbase is handling more, with Bitfinex suffering a huge reputational damage after it was revealed about $1 billion was seized with the exchange then borrowing this money from Tether.
Meaning the latter is not fully cash backed, but that it is backed in any way and at what appears is 100% in total, is a bit surprising.
Anyway all that stuff is their business. We’re interested here in some fly by night arbitrage. Let’s see if we can do some.
So, we buy one bitcoin at let’s say Coinbase at $5,700. We sell it at finex for $6,040. We buy 35.52 eth at $170 each. We sell this eth at $160 and we made a loss as we’re left with $5,683.2.
So then it’s best we just convert it to Tether. Ohh… look at that. One USDT is worth $1.05 there. Danke New York General.
We won’t go through the rest because we’d probably lose money in all of them as it looks like the bots have already taken all the opportunities.
This quick exchange of any coin for any other coin where there is gain probably explains why cryptos seem to move in unison until they don’t.
Sometime there is actual demand for any one crypto for whatever specific reason. But there are also times where btc/crypto keeps both in check as bots run to fiat, btc, and the crypto, streamlining everything.
Meaning while we here are a bit like horse carriages trying to do all this arbing manually, the lambo traders send their bot armies to tiff, taff, vruuuuum.
Yup, we left with nothing. Sorry boys. Wait for the New York General to bring more bad news and maybe then you can scalp a penny before vruum bots take everything without any care about silly things like fully backed fractional money printing reserve banking.
Wait, they’re actually backed 74%? And they the ones that should go to prison? The power of making laws eh. Who wouldn’t like a general to keep competition out. How dare they print money? Our monopoly!
Not any more. Viva la bitcoin!