Clarify this bit? Which price of BTS (external?) and affected how?
Say BTS on BTS/bitUSD is trading at a discount (compared to bitUSD) on the internal exchange compared to the price of BTS in BTS/USD on an external exchange. Arbitrage means that there is a profit opportunity to buy up the BTS from the internal exchange and sell them on the external exchange, thus affecting the price and therefore the feed price.
OK, but I think its important to be specific here. That's not quite an arbitrage because you've started in one security (bitUSD) and ended up in a different security (real USD), so you need to take account of their relative pricing before you assume a profit. In principle, you then still need to switch back to bitUSD (where you started) at the market price to complete the cycle, and when you do that I don't see where the arbitrage profit is. Let's take a discount scenario...
Let's suppose the market consensus is that a bitUSD is worth less than a real USD, maybe 0.90 USD. On the internal exchange, a bitUSD will exchange for $0.90 of BTS (measured in real dollars). And on the external exchange, a bitUSD will also exchange for $0.90 of BTS or $0.90 real USD. Because they trade the same level inside and outside there is no arbitrage, is there?
Even if traders inside the exchange believed unrelentingly in the parity of the bitUSD, and exchange it internally for $1.00 of BTS, the arbitrage is to buy bitUSD outside and sell it inside, a behaviour that will cause the bitUSD prices inside and outside to converge somewhere between $0.90 and $1.00 of a USD, which is still a discount. And I'm not sure how this has an impact on the external price of BTS at all.
Are we on the same page, or am I on a tangent?