Who will lend me a few billion $ for this arbitrage?

ScroogeMcDuck said:
Step 1: Buy a bunch of spot bitcoin and get 6-10% APY on it as a demand deposit at a regulated exchange
Step 2 (optional): Short an equal amount of CME bitcoin futures and get paid 15% APY in contango.
That's a 25% return on a delta neutral positon, just for taking some counterparty risk with the exchange and some liquidation risk. If bitcoin spikes up enough to squeeze you on the short futures position, then you cover some of the futures and sell some of the bitcoin at the same time, and wire the proceeds from the bitcoin exchange to the broker, which takes an hour or less during business hours. But I guess if too many people do that then the spread blows up whenever bitcoin spikes so it's no longer a safe arbitrage unless you have deep pockets to cover the collateral on the futures.
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Seen this before (most recent in a series, first is here). Worth reading for a better understanding of the risks involved (not saying the OP doesn't understand them of course).

GAT
 
globalarbtrader said:
Seen this before (most recent in a series, first is here). Worth reading for a better understanding of the risks involved (not saying the OP doesn't understand them of course).

GAT
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It covers about 1/3rd of the risks and hassles involved. I'm not going ahead with this, since it's beyond the scope of ET anyways. The trades focus is primarily backoffice and clearing related and that's definitely not the forte of the average small fry gambler.

Hint: try onboarding at BAKKT warehouse as an individual to actually deliver the BTC.
 
MrMuppet said:
It covers about 1/3rd of the risks and hassles involved. I'm not going ahead with this, since it's beyond the scope of ET anyways. The trades focus is primarily backoffice and clearing related and that's definitely not the forte of the average small fry gambler.

Hint: try onboarding at BAKKT warehouse as an individual to actually deliver the BTC.
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Sure, I mean I would never do this trade myself.

GAT
 
tsznecki said:
I've told you this before along with @destriero and @MrMuppet but you don't seem to learn. There's a reason the carry exists.

Also, I want to add this point, I can get 10-15% yields in Defi and Cefi on cash. Why would I need to put on a carry trade?
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Can you shed some light on the Defi/Cefi arbitrage? Sounds very interesting. Thank you.
 
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