Arbitrage bitcoin india
Bitcoin Arbitrage is the simultaneous purchase and sale of an asset in order to profit from a difference in the price across exchanges. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms.
Arbitrage exists as a result of market inefficiencies; it provides a mechanism to ensure prices do not deviate substantially from fair value for long periods of time. Bitcoin arbitrage is the way of buying of bitcoins from one exchange where the price is very low and selling it at another exchange where the price is relatively higher. The value of Bitcoin varies according to the countries economy. For example, after demonetisation in India in November the value of Bitcoins raised locally in India.
So many investors used this as an arbitrage opportunity to buy from other countries and sell in India for a premium. The prices of Bitcoin vary on various exchanges, due to the fact that the markets are not directly linked.
Nearly 7 percent premium stated by Joseph Young on February 3, Bitcoin offers arbitrage opportunities across different exchanges, zero transaction costs on the Chinese venues hosting most of the activity, round-the-clock trading, and co-location services allowing participants to align their servers with exchange servers. As trade volumes reached record levels this month, according to Bitcoinity.
Yet major price discrepancies do exist between bitcoin exchanges. It is not uncommon to see Bitcoin show day highs and lows that are very different than the day highs and lows at Mt. Different fees that are involved in Bitcoin arbitrage are as follows.
Understand the total cost of entering and exiting a position in the market. When buying bitcoin there are typically exchange fees variable and bank fees fixed or wire transfer fees. Check out the below comparison between buy at Intl market Bitfinex and sell at Indian market here Coinsecure. But this is not without hurdles. Till the time of writing, I could not do this yet. The problem is on both sides.
In Intl exchanges, its the verification delay, and some exchanges like bitfinex freezing wire deposits. It took about a month almost to properly get verified and ready for wire transfer.
These are all OK. You see, the main problem is in the Indian side. Due to money laundering fears, the outward remittances are too much restricted in India for wire transfer. Approach any 3rd party services or banks, they always ask you the purpose and it is expected to be some of the following: Here is the link.
But we do not know yet if bitcoin could fit there. And not many government netas the term we used to call because they feel themselves very superior to common citizen , are aware or too afraid of the same. Drop the term bitcoin as purpose, and they would stare at you like a criminal. This is a bane in India. With enough money and connections, the millionaires would go unabated, netas would "adjust" all means to achieve their target.