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RE: This biggest reason steem prices are falling: The Arbitrage Sabotage Steem-Dollar Teeter-Totter
It works both ways, but now it is only profitable in this way.
If there would be sudden buy presure at poloniex, this strategy wouldn't be profitable. But you could start do the opposite, with profit.
Usually the internal market react much slower than poloniex, so basicly those who offer liquidity at the internal market lose money to the arbers.
could you please expound on this, because ive been trying to figure out why this would be the case. I can look and see whos doing it, and i can see they're only doing it one way, but i cant figure out why, for example, if steem decreases in price, the exact reverse of what im describing doesnt happen.
It really depends on the actual prices, now selling steem at poloniex and buying at the internal market works, but a month ago it wasn't profitable. The opposite was profitable, buying steem at poloniex and selling at the internal market.
If you check the prices 1 month ago, you can see the opposite strategy worked.
Here is a post from steemit archive:
https://steemit.com/steem/@cryptorune/steem-dollar-poloniex-pump-is-a-arbitrage-goldmine
I need do more research in this subject but I assume the main problem is that the witnesses set the price feed (sbd/steem ratio) and they are not so good in that.
yeah that was when it first started right... when polo. first opened up to SBD and steem and the SBD was like 1.40 on there... If SBD got up again really high, i could see something like that happening again.
But i was thinking an opposite effect driven by a decline in steem price. So steem price starts to go down, but then the reverse direction arbitrage kicks in and pulls it back up... but that never seems to happen.