Is there any Bitcoin arbitrage across countries ?
There is definitely Bitcoin arbitrage across countries over the world. But first have a look what arbitrage exactly is. Arbitrage is when you buy Bitcoin in one country and simultaneously sell it in another country for a higher price. You then profit between the difference in prices of Bitcoin between countries. So let’s say 1 Bitcoin is 6500$ in South Korea but 6200$ in the United States. You can buy Bitcoin in the United States and simultaneously sell it in South Korea with profit. This is Bitcoin arbitrage across the United States and South Korea.
Does the price of Bitcoin differentiate between different countries ?
The price of Bitcoin can be different in other countries. The reason the price of Bitcoin can be higher of lower in other countries is often because of availability and regulation in those countries. Let’s have a look at Bitcoin in South America, where a financial crisis happening and people are trying to trade their currency into cryptocurrencies. The price of a Bitcoin in Venezuela will be higher then the price of Bitcoin in Europe. Due to the fact that the demand is higher in South America at the moment.
Bitcoin arbitrage between exchanges
The price of Bitcoin can also differentiate between different exchanges. October 2018 we have seen a crash of the USDTether on the exchange Bitfinex which made traders switch their USDTethers to Bitcoin. The price of 1 Bitcoin was significantly higher then on other exchanges. The difference in price went up to hundreds of dollars.
Is it profitable to arbitrage Bitcoin ?
Arbitrage Bitcoin is definitely possible, but you need to be prepared. The price of Bitcoin can heavily fluctuate between countries and exchanges. You would need to have an existing account at all exchanges and for different price in countries you would have to use Localbitcoins. Let’s take the last example, the USDTether crash. The price of 1 Bitcoin on Bitfinex was 6700$. On Coinbase the price stayed 6300$. To arbitrage between those two exchanges you need to buy Bitcoin on Coinbase, transfer it to Bitfinex and sell it there again. There are traders who are making profits just by trading Bitcoin between different countries and exchanges.