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You may or may not believe this about Bitcoin

But it is true that given the collapse of FTX there’s free money to be had in Bitcoin arbitrage:

There’s a certain joyous circularity in the idea that the FTX collapse – Sam Bankman-Fried’s implosion at FTX and Alameda – means that there’s now, again, free money to be picked up in Bitcoin arbitrage.

Note that this is arbitrage, this is nothing to do with BTC/USD, the actual price of Bitcoin or even of the US dollar.

Also, note what we’ve said before about arbitrage. Buying and selling something at the same time, in different markets, in order to lock in a profit. That’s pure arbitrage but this is a little different here, this is time arbitrage.

The circularity’d joy is that FTX started out doing Bitcoin artbitrage……

14 thoughts on “You may or may not believe this about Bitcoin”

  1. Isn’t GBTC a favoured way of shorting bitcoin? That would partly explain the price differential.

    Also if it doesn’t actually own a load of bitcoin but is “exposed” to it in various different ways (which might not actually equate to owning it when the shit hits the fan), then that will undermine the price.

    Might I ask how much are you investing in this free money opportunity?

  2. Dennis, Inconveniently Noting Reality

    The second you hear “free money”, you know you’re dealing with a huckster or a fool.

  3. I’d say you’re very wrong here. You’re doing the same as everybody else & treating BC as a tangible. So you can arbitrage it like tangibles. But BC isn’t a tangible. It’s an abstract. It’s just an expression of confidence. In that sense it’s no different from fiat. But with fiat there’s so much being continually used in commerce it behaves like a tangible. With BC, the whole thing could blow away in an instant. Like a puff of smoke. So then where’s the other side of your arbitrage? What happened to your money?

  4. I’ve said this all along with crypto. The only value it can possibly have is that you can confidently exchange it for goods & services. The value being the g & s you can buy/sell with it. If you can’t do that it has no value. Apart from that assigned by the stupidity of the people been speculating in it. You want to price stupidity? Be my guest.

  5. Dear Mr Worstall

    You are a vile promoter of Bitcoin derivatives to UK retail customers (according to, so we are not permitted to read your pearls of wisdom:

    You are being redirected to’s UK pages.

    The page you were looking for contains information about cryptocurrencies. The sale and promotion of cryptocurrency derivatives to UK Retail clients has been banned by the FCA since 6 January 2021.

    How lucky we are to have our beloved government™ to look after us and tell other folk what we are not to be allowed to do or read about.

    All hail OBG™.


  6. We got free money when we had a low interest rate mortgage with a Building Society and simultaneously a Cash Isa paying a higher interest rate from the selfsame society. So there!

    I suppose “free money” is distinct from a great bargain such as spending a few quid to repair omissions from your National Insurance record so that you get a larger State Retirement Pension. You can only tell in hindsight whether that worked well.

  7. DP, just change the site to Smart Forex Broker LLC with the drop down list and then scroll down to the Crypocurrencies section

  8. Thank heavens I never scrolled down further than the ForX pages. There’s sufficient free money there to satisfy my needs

  9. Can you do the violation of Covered Interest Parity next?

    “as Keynes said, markets can stay irrational longer than you can remain solvent. That risk means that time arbitrage isn’t in fact free money however tempting any specific trade is.”

    Why not do the cross-currency basis, which has kept arbitrage open for decades now? If you want free money just borrow at the dollar borrowing rate then swap into Euros or whatever at the currency swap rate and voila`, do you have a guaranteed free money trade?

    P.S., doesn’t the persistence of the cross currency basis make a mockery out of all derivative fair price formulas?

  10. Can I educate you ignorant mofos on the cross currency basis?

    “USD fixed-income investors can benefit when foreign currencies have a negative basis versus the USD by swapping USD for foreign currency and investing in foreign currency denominated bonds and using a currency swap to convert the returns back to USD. Using this strategy, a USD investor can earn a higher return than simply investing in the USD denominated bonds.”

    Do those in the know such as Goldman Sachs, etc. do carry trades and add cross currency basis on top of that, the latter just widening in a mania, panic, or recession?

    Does the size of the currency swap market dwarf your bitcoin trade volumes?

  11. A double currency swap? I’d be surprised if you got more out of that than you lose in exchange fees. Someone pays them after all.
    Unless you have many people holding lots of each currency and willing to swap for nothing at a retail level?

  12. Why is Credit Suisse using currency swaps?

    “While the outflows have been “reduced substantially from the elevated levels of the first two weeks of October 2022,” they have yet to reverse, the bank [i.e. Credit Suiss] said.

    This massive run on deposits explains why the Swiss National Bank hit up the Federal Reserve for over $20 billion in dollar swaps in October. In the space of just one week, 17 Swiss banks were allocated $11.09 billion, the largest amount requested in a single operation since the Global Financial Crisis.”

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