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Suppose I have BTC at HitBtc and Poloniex. The prices and fees are:

  • HitBtc: price is 8460, fees are ~0.1%.

  • Poloniex: price is 8385, fees are ~0.2%.

The price difference is 0.9%. I can sell BTC at HitBtc by 8460 and then use this money to buy BTC at Poloniex by 8385 to make money after fees.

Is there an arbitrage opportunity here?

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    Sounds right, why not?
    – JBaczuk
    Commented Jun 8, 2018 at 2:31
  • Then why such opportunities exist?
    – 171124
    Commented Jun 8, 2018 at 21:59

2 Answers 2

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Arbitrage Example

  1. Buy 100 XCOIN for 100 EUR (1EUR/XCOIN) on Exchange A
  2. Send 100 XCOIN to exchange B minus transaction fee of 1 XCOIN
  3. Wait for X confirmations before Exchange B will let you trade to your 99 XCOIN
  4. Sell 99 XCOIN at 1.1 EUR/XCOIN for 108.9 EUR
  5. Repeat

Risks and Fees

  1. There are sometimes fees for purchasing coins
  2. Transaction fees exist on many blockchains.
  3. Confirmation times can take several minutes to several hours. During this time the price can drop below the price you bought it at, causing a loss.
  4. There are fees for selling and converting coins to Fiat.

These opportunities exist because price is set by the market. Each exchange is its own market with different people selling different amounts of coins for different prices.

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  • Thank you. I would think my previous examples take care of 1, 2, and 4. So I would think 3 is the reason.
    – 171124
    Commented Jun 9, 2018 at 1:19
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arbitrage is possible but have not a very good profit margin in this case (caused by tradingfees, networkfees, etc). furthermore you must consider the fast price fluctuation of btc cryptocurrency-markets.

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