When Bitfinex announced that they had to pause USD withdrawals, it meant that customers who wanted to send USD out of the exchange weren’t able to, essentially locking in their fiat on the exchange. The only option at the time would be to buy bitcoin for example, and move it off the exchange.
Earlier this week, Bitfinex also announced that in addition to pausing withdrawals, they had to also pause USD deposits. So all USD coming in-and-out of the exchange was halted. Bitcoin exchange OKCoin paused their USD deposits too this week, both citing the same banking issues.
Bitfinex published a new update today, stating that they “continue to experience temporary delays in the processing of outbound fiat wires” and are working on a resolution. In the meantime, as funds are essentially locked on the exchange for USD customers, it has created quite the spread from Bitfinex to other exchanges.
As pictured above in the Bitcoin Exchange Price chart (in USD), you can see the large spread in price from Bitfinex (top brown line) and other major Bitcoin exchanges.
This has created a unique arbitrage opportunity for traders. The old saying “buy low, sell high” comes to mind.
If you can buy low on one exchange, and sell high on Bitfinex, the potential for profit is available to anyone willing to take the risk. As of this writing, the price on Bitfinex is $1307.50 USD. On GDAX (Coinbase exchange) the price is $1239.40 USD; a spread of $68.10 USD.
To take advantage, all a user would need to do is have accounts on both exchanges. You can buy bitcoin low on GDAX, then transfer the bitcoin to Bitfinex. You can then sell high on Bitfinex, raking in the profits. The only problem would be moving your USD back off of Bitfinex, which at this time is not possible.
It’s a risk someone would have to take, but it’s completely possible. In addition, Bitfinex made it clear in their update today that domestic transfers within Taiwan are not experiecing any problems. So users who can transfer in-and-out of the Taiwan dollar (TWD) could take advantage.