converted using the prevailing R/ exchange rate. Arbitrage is defined as the buying and simultaneous selling of assets in different markets to take advantage of differing prices for the same product. Although it is easy to speculate about the causes for the Bitcoin premium seen from time to time, it is important to realise that you are not trading exchange bitcoin to ripple kraken directly with Luno, said van Rooyen. Similarly, when the arbitrage expanded to above.5 (red dotted line showing very bullish sentiment) the price of Bitcoin normally corrected shortly after. As van Vuuren outlines, arbitrage gives incentives to sellers of crypto in a small market like South Africa to make higher-than-average returns. Buy more "cheap" coins on the USD exchange and repeat for a hefty profit. More recently the arbitrage expanded to 14 (we saw 17 intraday) and Bitcoin put in a top almost immediately thereafter. The price of Bitcoin can vary greatly from one exchange to the next, depending on the individual markets of these platforms. This means that the Bitcoin-to-rand exchange rate shown by Google is the US dollar value converted to rand, and is not representative of local markets.
You exploit the difference in price on different exchanges, and keep the change as free money.
Bitcoin arbitrage is the buying of bitcoins on an exchange where the price is very low and selling it at an exchange where the price is relatively higher.
Bitcoin vary on various exchanges, due to the fact that the markets are not directly linked, and the trading volume, on many exchanges, is low enough that the price does not adjust to the average right away.
The Future of Bitcoin in South Africa.
The higher the arbitrage, the higher the local South African bullish sentiment.
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When the local demand outstrips local supply, the local price has to rise to coax holders to part with their Bitcoins. If you have access to both USD bitcoin exchange and the South African bitcoin exchange I imagine you could sell your bitcoins on the South African exchange. But we find this arbitrage much more useful in reflecting local sentiment. Read: Bitcoin and other cryptocurrencies are still too risky Reserve Bank. Van Vureen, in this piece then, unpacks why prices on luno are much higher than the global average owing to the arbitrage phenomenon(arb for short). While it is possible to make money from this arbitrage, van Vuuren said the price discrepancies are more useful in how they reflect market sentiment. Trading bitcoin is risky business, this is a fact.
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