International Crypto Price Gaps

A crypto arbitrage strategy exploiting international price differences in Bitcoin, particularly focusing on markets with restricted currency flows. The strategy generated hundreds of millions in profit through systematic trading of price differentials between countries.

Core Strategy

• Buy Bitcoin in US markets at lower prices
• Sell in premium markets (like Korea) at 10-50% higher prices
• Convert local currency back to USD
• Repeat daily at massive scale ($25M/day)

Key Implementation Details

• Required setting up legitimate-looking business structure
  • Created "Alameda Research" for credibility
  • Hired local language speakers to work with banks
• Banking Infrastructure:
  • Worked with rural banks more open to large transactions
  • Had to manage currency conversion limits
  • Required physical presence in multiple countries

Execution Challenges

• Had to manage all legs of transaction:
  • Buying Bitcoin in US
  • Selling in premium markets
  • Converting local currency back to USD
• Large currency conversions triggered money laundering concerns
• Required constant monitoring of:
  • US spot prices
  • International market prices
  • Currency conversion rates
  • Transaction bottlenecks

Results

• Generated hundreds of millions in profit from arbitrage
• Scaled to handle 10% of all Bitcoin trading volume
• Led to creation of FTX exchange
• Ultimately built into $10B total value combining trading profits and exchange business