The reason why geographical arbitrage exists in the bitcoin market is due to the fact that bitcoin is not traded on a single exchange. Instead, it is traded on multiple exchanges around the world, and each exchange has its own supply and demand dynamics, which can result in price inefficiencies.

Also, different regions/countries have different laws and regulations on crypto currencies making it harder or easier for people to obtain Bitcoin, depending on their location which has a direct impact on the supply and demand of that specific location. As a result, this can cause the price of Bitcoin to be higher in that specific location. Most of the supply and demand is usually completed by crypto exchanges; however not all countries allow crypto exchanges, including China, Nepal, Bangladesh, Morocco, Algeria, Egypt etc. For example, even though China has banned crypto exchanges, people can still use Chinese electricity to mine Bitcoin. Furthermore, Hong Kong’s status is a special administrative region of China and it allows limited Bitcoin transactions. In conclusion, even though China has technically banned crypto exchanges, Bitcoin and any crypto transactions you can still sell Bitcoin Peer to Peer to private vendors in Hong Kong who then distribute it throughout their clients at inflated rates. This is how Geographical Bitcoin Arbitraging would work in China.

Just because this works in China, does not mean this is the case with all other countries that disallow crypto exchanges, Bitcoin, or cryptocurrency transactions. Different locations/countries have their own legal loopholes that make Geographical Arbitrage possible. Unlike Bitcoin or Triangular Bitcoin Arbitrage, Geographical Arbitrage does not work by using an algorithm. It is based on direct supply and demand from certain locations and is executed by either Invictus Arbitrageurs or remote agents.