Arbitrage opportunities are not difficult to find in the world of Bitcoin and cryptocurrency right now. Korean Bitcoin exchanges are showing a rather large price discrepancy compared to the rest of the world. But taking advantage of this US$125 arbitrage gap is not as straightforward as people may think. Plus, the lower volume across Korean exchanges would make it rather difficult to take full advantage of such an opportunity.
Korbit Is An Arbitrage Opportunity Waiting To Happen
It has to be said, the current Bitcoin price on the Korean Korbit exchange is quite appealing for traders. With the value per BTC over US$125 higher compared to the rest of the world, this is a golden opportunity for people to take advantage of. However, the allure of making a lot of money quickly comes with caveats as well.
Setting up an account on the exchange is not as easy as entering your regular address, and they do perform thorough identity checks. Right now, Korbit has the Bitcoin price at US$1,140, which is well above the global market average of US$1,022. Although it is not uncommon to see specific regions display higher Bitcoin prices, such an arbitrage gap is rather unheard of.
In fact, the Korean price is also much higher than the “standard” premium price range found across Chinese exchanges. On paper, it would make perfect sense to buy cheaper Bitcoins in the US and sell them on the Korean exchanges right now. As a result, this would slowly drive up the USD price, while bringing the Korean price down a bit due to increasing liquidity. The reality is however, that process is far from simple.
For starters, the local law requires users to have a utility bill linked to a Korean address. Additionally, Korbit will require the ID card number, a bank name, and the account number you plan to use. It is the residency proof of ID that is most difficult to obtain. This also prevents foreigners in Korea from setting up an account and take full advantage of the arbitrage opportunities.
But the arbitrage opportunity is only one part of the bigger story. It is unclear why this gap exists in the first place, although it seems safe to assume this is due to lower market liquidity. Speculation hints at certain wealthy individuals buying up Bitcoin whenever they can, driving the average price higher as a result. These rumors are only speculation for now, though, and should be taken with a grain of salt.
It is clear the whole world is keeping a close eye on the Bitcoin market, and new arbitrage opportunities are on the horizon. Unfortunately, one cannot take advantage of all of them in quick succession, which may be a good thing as well. Things are looking bright for Bitcoin as we venture into 2017, but it remains unclear if this trend will continue.
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