Mt Gox Bitcoin: An Instant 80%+ Arbitrage Profit, Or Dunce Cap
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The big question in Bitcoin-land is if you should buy the virtual currency on the Mt. Gox exchange as it is trading at $346, or at a 46% discount to the price of $637 on bitstamp and a 43% discount to the $609.29 price on BTC-e. Buying the bitcoin on Mt Gox can give you an instant profit of up to 84%.
There is one big problem ---- you can't withdrawal your Bitcoin on Mt Gox currently and there is a growing chance you may never see your Bitcoin ever again.
Mt Gox is in some serious trouble after the exchange stopped sending Bitcoin withdrawals last week, citing a "software bug." Meanwhile, although other bitcoin exchanges have seen issues they continue to allow for withdrawals. On February 11, Bitstamp too suspended withdrawal citing a denial-of-service attack. However, today Bitstamp said they found a fix and will start processing withdrawals later today. To our knowledge, BTC-e has not stopped withdrawls.
Earlier, a Mt Gox customer confronted the CEO of the exchange and it wasn't pretty. That customer doesn't believe he will see his bitcoin again. Mt Gox could have lost all their Bitcoin in a hack, or the company could have been stealing them. Alternatively, Mt Gox could be telling the truth and everything is a-ok. It is still unclear.
While the risk of buying bitcoin on the Mt. Gox exchange appears extremely high, some see it as a chance to buy Bitcoin on the cheap. Bitcoin traded as low as $302 on Mt Gox before recovering somewhat, suggesting buyers are stepping in as they see the chance for a large arbitrage profit. That said, these buyers may be buying nothing more than air.
There is one big problem ---- you can't withdrawal your Bitcoin on Mt Gox currently and there is a growing chance you may never see your Bitcoin ever again.
Mt Gox is in some serious trouble after the exchange stopped sending Bitcoin withdrawals last week, citing a "software bug." Meanwhile, although other bitcoin exchanges have seen issues they continue to allow for withdrawals. On February 11, Bitstamp too suspended withdrawal citing a denial-of-service attack. However, today Bitstamp said they found a fix and will start processing withdrawals later today. To our knowledge, BTC-e has not stopped withdrawls.
Earlier, a Mt Gox customer confronted the CEO of the exchange and it wasn't pretty. That customer doesn't believe he will see his bitcoin again. Mt Gox could have lost all their Bitcoin in a hack, or the company could have been stealing them. Alternatively, Mt Gox could be telling the truth and everything is a-ok. It is still unclear.
While the risk of buying bitcoin on the Mt. Gox exchange appears extremely high, some see it as a chance to buy Bitcoin on the cheap. Bitcoin traded as low as $302 on Mt Gox before recovering somewhat, suggesting buyers are stepping in as they see the chance for a large arbitrage profit. That said, these buyers may be buying nothing more than air.
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