Quote from: JoelKatz on September 08, 2012, 06:20:10 AM

This kind of reads like word salad to me. The price of Bitcoins is roughly constant, just volatile. So all it does is add additional risk. Any additional profit potential could equally well be realized with loans in dollars. Just use the dollars to buy Bitcoins, profit with the Bitcoins, sell the Bitcoins to pay back the loans. Even the best arbitragers in the most volatile markets don't make 1%/week.

First off, the largest stability there was in price since it was <.25 was this spring/summer when BTCST was in full swing. From June to July, it gained 20%. July to Aug it gained 30%. Aug to Sept it gained nearly 50% before losing that much. That isn't constant.

Most lenders here are long in bitcoins, which means they don't want to convert their position to USD and lose out on coin appreciation, so your scenario doesn't fit. Convincing a traditional bank to fund your bitcoin business really isn't going to happen, not necessarily because its a bad business idea, but because bitcoin is an unexplored minefield and no bank wants to be the guy out there exploring it first.

As to the market arbitrages, there is certainly at least one other way to make more than 1% a week in bitcoins.