Different Ripple rates Gatehub VS Poloniex

[idanr84]

Hey,

I want buy my first ripple coins.

I'm not in a possession of any other coins right now so I rather buy directly using USD. (I'm also not a US citizen)

I see the ask rates in Poloniex and Gatehub are very different.

minimal ask price in poloniex is 2.68...

minimal ask price in gatehub is 2.429...

How can there big such a big difference ? am I missing something ?

Thanks 

 

Edited January 6, 2018 by idanr84

[Tonnie]

Most frequently asked question. Different still young markets and with different volumes...

[idanr84]

Poloniex should have a much higher volume than Gatehub as far as I understand, and still its ask prices are higher.

[Guest1]

There is an arbitrage opportunity there but the risk required to reap the benefits is quite large. You could theoretically purchase XRP from Gatehub, send it over to Poloniex and sell it. However, once you have sold XRP to LTC for example, then you would need to send LTC back to Gatehub and then sell it off to fiat (assuming Gatehub supports LTC).

There are risks associated with this because of:

1. Transactions fees that will be incurred with all the buying and selling

2. LTC transaction fees to send it from Poloniex to Gatehub

3. Price could have moved unfavourably while you are out of position. For example, price at Gatehub for LTC could have moved down while you are undertaking the above processes, causing break-even or even losses.

4. Exchanges can have technical issues or bottlenecks with certain coins and your transaction being held up could cost you if price moved unfavourably as mentioned in 3 above.

 

So while theoretically it is possible to take advantage of this arbitrage opportunity, and I must say some people would have succeeded, it is not a set formula that can be used repeatedly to give you large gains every time. If that was to be the case, market efficiency would ensure that such arbitrage disappears.

Edited January 6, 2018 by Streamliner

[idanr84]

@Streamliner Following your example, why can't I just sell my XRP back to USD on Poloniex (After buying them at Gatehub and moving them to Poloniex) ? (Assuming I'm interested in a one time gain let's say)

Also, do you know if both provides an API or one has to do it manually ?

And last, if I just one to buy ripples and hold for long term, do you know of a website (similar to this for Stellar : http://stellar-price.com/#all-prices) that can show me the best exchange currently to get them ?

 

[techpeter]

its all about liquidity , they may have a head line rate with a difference but for only a few dollars . 

[Guest1]

6 hours ago, idanr84 said:

@Streamliner Following your example, why can't I just sell my XRP back to USD on Poloniex (After buying them at Gatehub and moving them to Poloniex) ? (Assuming I'm interested in a one time gain let's say)

Also, do you know if both provides an API or one has to do it manually ?

And last, if I just one to buy ripples and hold for long term, do you know of a website (similar to this for Stellar : http://stellar-price.com/#all-prices) that can show me the best exchange currently to get them ?

 

If you already own XRP on Gatehub then one time profit would be possible.

However, if you don't have XRP on Gatehub, then you have to deposit USD into Gatehub first and this could have a delay and the price could move unfavourably during that time.

Once you sell on Poloniex, you would need to take that USD and bring it back into your bank account which could also take time.

The risk that you take in this case is the opportunity cost of not holding XRP. Lets assume you did the above and made 5% gains. If XRP price moved up by 30% while you are waiting for the USD to arrice into your account, then you would have actually lost out by 25%.

I've used Bittrex API just to check balances so I think there would definitely be one for Polo. Not sure about Gatehub. Also I'm not sure whether there are API commands for buying and selling.

For obtaining the best rates, you can click on Ripple in coinmarketcap.com and click on Markets. That will give you all XRP prices for all listed exchanges. 

[Guest1]

Another important point is that it's easier to deposit USD or Fiat in some exchanges compared to others. The longer it takes to get Fiat into an exchange, the more risk you take in terms of missing out on a price rise while your money is stuck in the deposit pipeline.

Edited January 6, 2018 by Streamliner