Is instant profitable arbitrage impossible? Case #1: Trade coins after an arbitrage opportunity appears.


Buy Coin B with Coin A at a low price.
Move Coin B to the buyer's market.
Sell Coin B for Coin A at a higher price.


However, transaction fees, withdrawal fees, the time withdrawals take, and the presence of other arbitrage bots ruin its success. I've monitored the market for opportunities and tested this case, and so far I've only found the impracticality of it: stuck-withdrawals, opportunities that disappear, transaction minimums and fees, etc...

Case #2: Hold 50/50 coins and instantly trade them.

This case puzzles me. It is simply not practical. 


There are over one hundred alt-coins of which one would have to have funds.
Apart from the alt-coin opportunity funds, one would need a proportional amount of LTC &amp; BTC.
Most (if not all) of the alt-coins' value is volatile. It makes no sense to steadily hold funds in those "currencies". Whatever small gains acquired by arbitrage would soon dilute.
If one had the hundreds of alt-coins required, and some (mysterious) way to manage their volatility. The size of the arbitrage opportunities available wouldn't match the ROI a traditional investment offers.


Edit 1: Nitpicking the issue, it is possible to perform arbitrage on counted occasions. But I'm referring to the fact that #1 is not instant, and it's riskier and possibly not profitable. And case #2 is flawed in the sense that is not straightforward to hold (and increase) value in a portfolio of crypto-currencies.

I've seen some "professional" crypto-coin arbitrage services, but they look more like scams than anything else. Is there any truth to crypto-coin arbitrage? Is there a case #3, 4, 5, ..., n?
Both are possible; in fact, I do both when the opportunity arises.

For #1, for example, I have successfully conducted an arbitrage on UTC, by buying in at Crypto Rush for 0.00018 and selling it on Mintpal for 0.00019. You definitely have some risk here of not executing the trade quickly enough, so look for markets that are reasonably liquid (i.e. relatively low bid-ask spread). I've done similar arbitrages at least five times. It's not going to be super profitable, but it's a nice opportunity to take advantage of.

For #2, it all comes down to what kind of a long position you wish to hold. So for instance, if you wanted to hold 0.2 BTC and 100,000 DOGE in the first place, then it makes sense to spread them across two exchanges, with 0.1 BTC and 50,000 DOGE at each. When the bid of one becomes higher than the ask of the other, execute the arbitrage ASAP. Of course, it goes without saying that you should not attempt this strategy on a coin that you did not intend to gain exposure to in the first place.