What you are looking at here is an interesting ratio. First part is the ETHUSD/ETHEUR ratio, as given by Kraken. This simply gives the EURUSD ratio in terms of ETH. Theoretically, this should be the exact EURUSD as given by forex, but it sometimes isn't. So if we look at the (ETHUSD/ETHEUR) ratio and compare it to the real EURUSD ratio, it looks like this: ETHUSD/ETHEUR/EURUSD. When it is perfectly 1.00 there is no arbitrage opportunities, but when including commission and slippage it seems to only be profitable above 1.01 and below 0.99. In practice this would be executed in an API being triggered to move EUR to USD through ETH when the ratio is at or above 1.02 and then back to EUR through ETH when the ratio is at or below 0.98. This would roughly give you a 3% profit in your EUR holdings when this is triggered. Of course this can be done between any 3 currency pairs. BTCUSD/BTCEUR/EURUSD, BTCXRP/BTCETH/ETHXRP, or anything of the form ab/ac/cb.
yes I have noticed these arbitrages all over the place with cryptos but we need a broker to get in and out properly and in a timely fashion...if anybody has any suggestions let me know
mcbw_
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@swiftcoin, These only seem to be effective because there are no brokers that can execute this in its most ideal sense. With those who messaged me about developing APIs for this the best idea seemed to be keeping multiple funds and using a trigger to move volume through, then back once neutral. You may have a better opportunity doing this across exchanges.
Raffozor
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and if the eurusd/usdeur ratio goes down when you are holding eur or dollars waiting for another opportunity all your efforts will be useless? what do you think?
mcbw_
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@Raffozor, I think you're not seeing this correctly. It depends what you're doing with this, it's an almost entirely risk free way to make an extra 3-40% profit per month. The only time wasted is how long it takes to set up an API
kargs
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is it similar to other coins?
mcbw_
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Hey @kargs, it is possible with any 3 things you can trade between; simply set it in the form of ab/ac/cb. I just do most of my trading between ETH, BTC, and EUR,USD, GBP.