However in a volatile market I can't do that because the buyers and sellers (there will be far more of them and far more active) reach a spread that I can't sit in between to fix a price. These exchanges are sharks.
There is always arbitrage. People use multiple exchanges and there will often be a disparity between prices on each. Some people sell their BTC on one exchange, and buy back in on another. Nobody is limited to switching between BTC/USD on one exchange. I can remember when i dabbled the BTC price on btc-e always used to be significantly lower than on mtgox, and people used to buy BTC on btc-e, transfer crypto to mtgox and then convert into dollars... rinse and repeat.
I always used to have more success playing the BTC/LTC market to build up the amount of BTC I had when the BTC price was rising, and then converting that BTC into cash. Nobody is limited to just switching between crypto and fiat. That was when LTC was the 2nd biggest crypto by market cap. When BTC rose LTC did too, but the LTC price would often take a little while to catch up when BTC rallied so plenty of opportunities to win. This was 2014, so BTC/USD has never been the easiest to day trade.
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