FTX (with Sam Bankman-Fried & Mario Gabriele)

Bitcoin Arbitrage

Sam Bankman-Fried's journey into Bitcoin arbitrage began with a lucrative opportunity in the Japanese market. He discovered that Japanese bitcoins were trading at a premium compared to American bitcoins, allowing for significant profit margins. This opportunity, however, was fraught with logistical challenges, requiring a team of friends and acquaintances to execute the trades.

We tried to get set up to do that, and it was incredibly logistically complex to do so, but around the start of 2018, we finally were able to turn it on.

--- Sam Bankman-Fried

Despite his initial lack of knowledge about Bitcoin, Sam's financial acumen allowed him to capitalize on these arbitrage opportunities, making substantial profits during this period 1 2 3.

   

Arbitrage Potential

Evaluating the potential for profit in crypto arbitrage, Sam Bankman-Fried compared it to traditional finance trades. The arbitrage opportunities in crypto were unprecedented, with potential profits far exceeding typical trades in traditional markets. Despite the risks of fake data, the allure of high returns was undeniable.

The spreads here were just unheard of, if true. But of course, maybe they weren't true. Maybe it's all fake data.

--- Sam Bankman-Fried

Sam's decision to leave Jane Street Capital was driven by the irresistible potential of these opportunities, despite his satisfaction with his previous job 4 5.