Right now bitcoin prices are:
Bitstamp 645
BTC-e 623.4
Bitfinex 645.5
Huobi 671.68
...which means there are spreads near 8% from the lowest to the highest price.
What this implies, in turn, is that legacy banking is so obsolete that it's not even funny.
In trading, arbitrage opportunities are essentially a way to make "free money" as long as you can move money fast and take advantage of price differences. You see bitcoin trading at 670, you sell a few bitcoins at that market, then you move to another market, buy more bitcoins at 620 and return to the 670-priced exchange to sell again at 670. But for this to happen, you must move fiat money quickly - which seems to be impossible with the legacy banking system.
If you have ever engaged in altcoin trading there might have come a time when arbitraging altcoins can be "problematic" due to slow BTC transfers ...it could be half an hour for a couple confirmations. But if one is arbitraging BTC with fiat money, then BTC appears lightning-fast compared to how slow and bureaucratic the legacy banking system is.
Selling BTC to move fiat around from one exchange to another, in order to take advantage of arbitrage opportunities, can take DAYS - and that's supposing there are no government regulations and laws that prevent the banks from moving capital around the world. Two weeks ago, in the first BTC pump, we saw that it needed almost 3-5 days to get the exchanges to "sync" in terms of prices.
So BTC trading and the speed of BTC compared to legacy banking, which in turns creates paradoxes like 7-8-10% arbitrage opportunities (=free money) really exposes legacy banking for its deficiencies:
-extremely slow speed (days)
-few working hours/days per week - unlike 24/7/365 operation of BTC
-government issues in moving capital around
...and I'm not even mentioning the cost of transferring money around - as this is not a factor that is exposed in the same way by arbitrage opportunities...
Just some food for thought....
I think anyone who is serious about arbitrage would have BTC & fiat sitting on several exchanges. They would also likely have a bot to execute the trades when the opportunity arises. Anyone needing to move money BTC or fiat to take advantage of the arb has probably already missed the opportunity.
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Which is a testament to how fundamentally slow the fiat legacy system is. If you need to have your deposits ahead of time in there, well... that pretty much says it all.
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