How to earn money on arbitrage between BTC-e and MtGox

Since MtGox disabled coupon codes many arbitrage guides become obsolete. When I advice to do the arbitrage people ask me how do I get USD back from MtGox to BTC-e.

You don't have to transfer USD from MtGox to BTC-e in order to do the arbitrage and it's possible even with no coupon codes. However this makes the arbitrage more difficult and long. But this is the good way to earn profit during a long-term and slow down-trend with minimal risks. You just need a patience and accuracy to do this, and some USD.

First of all, here are the fees you should take into account:
1) Buy and Sell Bitcoins on BTC-e: 0.2% + 0.2% = 0.4%
2) Buy and Sell Bitcoins on MtGox: 0.55% + 0.55% = 1.1%
3) BTC-e to MtGox transfer fee: 0.001 BTC
4) MtGox to BTC-e transfer fee: 0 – 0.0005 BTC (pay it if you need your transfer to be completed quick to minimize the price change risk)

So in total your direct and reverse arbitrage transaction margin should be greater than 1.5% in order to be profitable.

Also I assume you avoid keeping too much Bitcoins to avoid the price drop risk so you are mostly in USD.

How to proceed:
1) Calculate the average difference between MtGox and BTC-e Bitcoin price for the last 3-4 weeks. Let's assume it is equal to 4% at the moment with the Bitcoin price at MtGox higher than at BTC-e
2) Calculate the current price difference between MtGox and BTC-e. We will consider two examples: when the difference is 2% lower than average and when the difference is 0.5% higher than average.

Case 1: If the current price difference is lower than average you should transfer funds from MtGox (the source exchange) to BTC-e (the target exchange) if you have any. If you have no funds on MtGox then just wait for a case 2. It could take 1-2 weeks.

Case 2: if the current price difference is higher than average you should transfer funds from BTC-e (the source exchange) to MtGox (the target exchange). If no funds on BTC-e – wait for the case 1.

How to transfer funds:
1) Buy Bitcoins on the source exchange – do this as low as possible to avoid the volatility risk, place a buy order, do not fulfill a sell order.
2) Transfer Bitcoins from the source exchange to the target exchange. It usually takes 10-30 minutes.
3) Sell Bitcoins on the target exchange – do this as high as possible, place a sell order, do not fulfill a buy order

The example given:
1. Week #20, Bitcoin price at BTC-e = $100, at MtGox = $102, difference=2%, average difference = 4% (MtGox higher)
2. You have 1000 USD at MtGox.
3. You buy Bitcoins at MtGox and transfer to BTC-e: $1000 – 0.55% = $994.5, $994.5 / 102 = 9.75 btc, 9.75btc – 0.005 btc = 9.745 btc.
4. You sell Bitcoins at BTC-e: 9.745 btc * $100 = $974.5, $974.5 – 0.2% = $972.551. So far you have loss of $27 (2.7%)
6. You wait 2 weeks when Bitcoin price on BTC-e is $90 and on MtGox is $95, difference=5.5%, average difference = 5%.
7. You buy Bitcoins at BTC-e and transfer to MtGox: 972.551 – 0.2% = $970.61, $970.61 / $90 = 10.7845 btc.
8. You sell Bitcoins at MtGox: 10.7845 btc * $95 = $1024.5275, 1024.5275 – 0.055% = $1018.8926.

So here are your $18 profit (1.8%). In fact you can gain up to 7% if you are patient and accurate!
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What is Namecoin? CryptoRally version.

First of all I need to say that I like this coin more than other altcoins. PPC, TRC, NVC, FTC, CNC will exist but they won't catch the mainstream of Bitcoin and Litecoin. The question will Namecoin be in the mainstream currencies?

People say Namecoin has its own value. Yes, but its value is not formed by dot-bit domains. You can buy dot-bit domains either with BTC or LTC.
The value of NMC is formed by supply and demand, and the speculations as the value of any other coin.

I was trading Namecoins and want to share some concerns I was thinking all this time.
The problems of Namecoin are more fundamental comparing to BTC and LTC.

Dot-bit is not integrated with common DNS. It means people have to do some tricks to browse dot-bit domains and this makes the traffic of dot-bit web-sites much lower comparing to the common internet sites. People just buy domains cheap in case sometime in 2015 the integration will take place.

Uncensored and distributed DNS is a great idea, but imagine U.S. Federal Reserve started use of Bitcoins, so why than does anybody need Feds? The same appears to be with dot-bit domains. If the existing system allows the integration with dot-bit it means everybody doesn't need them anymore, so they will definitely put all their effort to do not allow this to happen. In addition, the states don't want uncensored internet when they are not able to seize a web-site.

Another problem with Namecoin is that the software is not yet released. It's still in beta for two years. It means people have to do some tricks just to keep NMC in a wallet on their computer and should only rely on e-wallets.

Project tasks (http://dot-bit.org/Main_Page)

Complete	Name	Summary	Updated
90%	Namecoin	Software for the decentralized domain name system	2011-11-02
10%	Namecoin GUI	GUI to manage domain names	2011-11-20
70%	DNS Tools	Tools to build your own DNS server with .bit domains	2012-03-07
70%	Easy browsing	Easy end user tools to browse .bit domains	2012-03-07

And the problem which makes me paranoid while thinking about long term perspective of Namecoin. There are no major updates from the development team since May 2012 when NamecoinJ was released. Just a new build from September 2012. For you to know: new build doesn't mean new version neither code changes. It's just a new compilation of the existing code.

I suspect they were keen in 2011 when Namecoin and Bitcoin just started, in 2012 when Bitcoin prices exploded, but something happened later.
I don't know what happened, I've been searching the forums, including bitcointalk.org and I found no major updates since early 2012.
Don't you find it strange?

Got an answer from previous LTCPP.net domain owner

After contacting Michael Stramara we got the following answer.
See the subject here: http://www.viewdocsonline.com/document/x9qmtg

"I'm sorry but due to the nature of the transfer, I'm in no position to give out any details of the owner switch. The transfer is behind closed doors and neither me, nor the new owner are allowed to disclose any information about the transfer agreement for LTCPP."

This is what we expected. If he registered the domain by occasion and then sold it to Tibanne he would sign some papers to do not disclose the new owner.

CryptoRally Public Declaration

Who are you? CryptoRally is a company founded by the group of friends.

Where are you from? We are from former USSR countries. Our friends live in Russia, Ukraine, USA, UK

What is you mission? It is to promote crypto-currencies like Bitcoin, Litecoin, Namecoin, altcoins.

What you do? We provide the most important Bitcoin and Litecoin news, cryptocoin exchange news, BTC-E
news, price forecast, and buy or sell recommendations.

How you can help me? Follow us on twitter and stay updated. We try our best to provide you with everything that can help you investing in BTC, LTC, NMC and earn profits on a long-term basis.

How to contact us: here or on Twitter: https://twitter.com/CryptoRally

What are our incomes from: We invest into crypto-currencies and trade, we have mining farms, we have web-service businesses.

What is your buying power: We do not disclose this information.

Do you pump and dump?: Not in common meaning of this. We don't like the fast pumps as we want to serve as a reliable source of the information and we want our followers to trust us. And we prefer the stable growth of our assets in Bitcoin, Litecoin, Namecoin rather than the fast pump and dump strategies.

What is Bitcoin? Try to do a google search and look here: http://bitcoin.org/en/
What is Litecoin? … look here: http://litecoin.org/
What is Namecoin? … look here: http://namecoin.org/

DISCLAIMER:
Remember, we never press buy/sell button for you.

This is not an offer or solicitation for investment advisory services, brokerage services, or other products or services. Any views expressed are provided for informational purposes only and represent only the opinions of Cryptorally team and should not be construed in any way as an offer, an endorsement, testimony, or inducement to invest.

All the information we use is obtained from Internet and from open sources. We do not have possibilities to verify all the information and links we use and post.
The only thing we can verify is that the link we post doesn't bring any harm to MacOS based PC if you click to the link.
It means we do not verify the page content neither the page download links.

The responsibility for the information and content of web-pages we post links here and tweet on https://twitter.com/CryptoRally is on the web-site owners.

Please do not download any software from the internet and do not install it to your computer until it is verified by antivirus software and tested in a safe environment. Do not pass your BTC-e and MtGox accounts and passwords neither API key to any application until it is 100% verified.