<p>The force keeping the exchange rates of various currencies in balance is the same force keeping the exchange rates the same across multiple exchanges: Arbitrage.</p>

<p>When the value of Bitcoin is different enough that one could buy cheaply for one currency then sell for a profit in another, or in the same currency across multiple exchanges, people will do just that. This kind of transaction is referred to as arbitrage. The important part is that if there are enough arbitreurs their actions will eventually move the markets they are playing in, forcing them to meet in the middle and thus agreeing upon a price.</p>

CC BY-SA 3.0
2013-03-16T06:41:53.297Z
2013-03-16T06:41:53.297Z
David Perry
<p>Mtgox uses a multi currency trading engine that matches trades between the different currency pairs. All trades are drawn from the one pool. Trades in one currency are matched against trades in another currency using ECB exchange rates, and tacking on a 2.5% fee. See Mtgox FAQ for further info: <a href="https://support.mtgox.com/entries/20800336-Multi-Currency-Trading" rel="nofollow">https://support.mtgox.com/entries/20800336-Multi-Currency-Trading</a> </p>

CC BY-SA 3.0
2013-03-18T12:18:21.203Z
2013-03-18T12:18:21.203Z
Bittrade
<p>MtGox supports many different currency formats. I'd like to know if each currency/BTC trade is independent of any other and the valuation isn't always perfectly aligned.</p>

<p>If someone wants Yen for BTC, but many other people want Dollars for BTC there is a supply / demand problem.  One way to fix this is to automatically convert dollars for yen and absorb a currency conversion fee.</p>

<ul>
<li><p>Does MT Gox internally automatically equalize these market forces?</p></li>
<li><p>Does a Bot perform these actions (at a rate of .60% per trade)</p></li>
<li><p>What are the computations used to ensure the bot is profitable?</p></li>
</ul>

<exchanges><mtgox><arbitrage><exchange-fees><bots>
Are each of the currency trades at MtGox independent from the other? Who or what is the equalizing force that aligns the markets?
makerofthings7
# Are each of the currency trades at MtGox independent from the other? Who or what is the equalizing force that aligns the markets?

(Asked by: username_0 on 2013-03-16)

MtGox supports many different currency formats. I'd like to know if each currency/BTC trade is independent of any other and the valuation isn't always perfectly aligned.

If someone wants Yen for BTC, but many other people want Dollars for BTC there is a supply / demand problem. One way to fix this is to automatically convert dollars for yen and absorb a currency conversion fee.

* Does MT Gox internally automatically equalize these market forces?
* Does a Bot perform these actions (at a rate of .60% per trade)
* What are the computations used to ensure the bot is profitable?

**Tags:** exchanges, mtgox, arbitrage, exchange-fees, bots


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## 2 answers

### Answer by username_2 on 2013-03-18. Score: 4 | Accepted answer

Mtgox uses a multi currency trading engine that matches trades between the different currency pairs. All trades are drawn from the one pool. Trades in one currency are matched against trades in another currency using ECB exchange rates, and tacking on a 2.5% fee. See Mtgox FAQ for further info: <https://support.mtgox.com/entries/20800336-Multi-Currency-Trading>


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### Answer by username_1 on 2013-03-16. Score: 2

The force keeping the exchange rates of various currencies in balance is the same force keeping the exchange rates the same across multiple exchanges: Arbitrage.

When the value of Bitcoin is different enough that one could buy cheaply for one currency then sell for a profit in another, or in the same currency across multiple exchanges, people will do just that. This kind of transaction is referred to as arbitrage. The important part is that if there are enough arbitreurs their actions will eventually move the markets they are playing in, forcing them to meet in the middle and thus agreeing upon a price.


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