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Historically, exchanges that are failing have significant spreads from stable exchanges (Mt. Gox comes to mind).

So, there is risk with this strategy. One of the exchanges could fail and you lose everything you have on that exchange.




This is correct. That's why I specified market risk. Of course not all the risks are overcome.


I know. I'm pointing out that seemingly profitable arbitrage opportunities carry very significant risks besides market risk.


I agree. Exchange failure is generally something separate from "market risk", and is sometimes categorized as "counterparty risk". With bitcoin, counterparty risk with exchanges is a very real thing, and an added risk beyond what would be considered "market risk" (i.e. asset price fluctuations).




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