Bitcoin is trading like a physical precious metals gold trade. Why say similar to buying and selling gold? because when you trade buy bitcoin with a Bitcoin exchanger (for example Indodax) the actual Bitcoin that you have is yours and can be stored wherever you want: safety box, laptop, cellphone, or Indodax account. As with gold, after you buy at the store you can store the gold in any place you like: safety box, bank, home, office, or wallet (like my friend who everywhere carries 10gram of Antam gold in his wallet – he said for emergency)
As with gold, bitcoin trading benefits can be exploited using arbitration/price differences. For gold trading, even though the world price of gold has a price guide, it is not uncommon for the price difference to be very striking between the X country gold shop and the gold shop in country Y. Either because of taxes or because of different supply demand in the country.
Gold arbitrage traders/traders generally trade a very large amount to buy gold from a country, put it in a suitcase, and sell it in a different country. The difference of several hundred thousand rupiahs per gram is a huge profit figure when making billions of rupiah transactions. But conducting gold arbitration is not something that is easy to do because of several limitations: the country’s law, the weight of gold, the cost of travel to the destination country and taxes.
Now what about the arbitration of Bitcoin?
Bitcoin trading is one of the extraordinary trading revolutions. Utilizing the internet network one can buy bitcoin thousands of dollars to hundreds of thousands of dollars from a bitcoin exchange in any country just by sitting quietly in front of the computer.
By utilizing this technology, we can actually benefit millions of rupiah to tens of millions of rupiah.
- Choose Two Bitcoin Exchange
Choose two exchangers where you want to take advantage of the price difference. Our advice is one from the international market, one from the local market. Just mention Indodax and Btc-e.com / Bitstamp.net, the two exchangers that you choose must have two conditions: trade on Bitcoin and can be withdrawn in fiat money (USD or Rupiah or Euro). The local market has the appeal of arbitration because it tends to be slower in adjusting prices so that movements are easier to guess and exploit. For examples in this article I will use Indodax and btc-e.com
- Deposit money
Deposit the same amount of money at Indodax and btc-e.com, for example 10 million + 1 BTC at indodax.com and $ 1,000 +1 BTC at btc-e. Or you can also only deposit at Indodax because if you are only interested in one direction. The balances on both exchanges must be equal so that in arbitrage you don’t have to wait long for deposits and transactions can occur instantly. Let’s just say the money you put in is capital arbitrage on the exchange. You can also put a smaller capital according to your ability.
- Observe the price
Observe the price of bitcoin on both exchangers.
If we compare Indodax’s purchase price of 2 million rupiahs it will be hit at the price of 6,980,000 and if we sell it directly on btc-e it will get a price of 7,279,500 ($ 1 = Rp 11,500) or it can be said to get a profit of Rp 300,000 only by buying at Indodax 1BTC and selling it directly to overseas markets.
Then what if the prices in Indonesia become more expensive than abroad? Then you need to do reverse arbitrage (buy abroad, sell bitcoin domestically)
Factors that need to be aware of
- Trading Fee for each exchanger
Indodax’s trading fee is one of the lowest (0.3%) so this is not too much of a problem but trading fees abroad sometimes apply a slightly higher trading fee so take into account these factors in making arbitase.
- Withdraw Fee for each exchanger
Each exchanger applies a withdrawal fee in bitcoin trading. This can make your arbitration profits disappear. Try to withdraw as much as possible. Make a withdrawal after making several arbitase trades. If necessary, only profit is withdrawn.
Happy Bitcoin Trading!