Cryptocurrency arbitrage is becoming a hot topic of discussion among cryptocurrency traders and investors.
In 2021 is seeing several free and paid crypto arbitrage tools start to come online. Almost everyone seduces cryptocurrency traders with promises of guaranteed profits when buying and selling digital assets. The only question is, how does arbitrage trading work?
Simple Arbitrage
There are many reasons why you might want to try crypto arbitrage, including:
Quick profits. If everything goes according to plan, it’s a plausible way to increase your capital. At the same time, it’s all about speed so you might make money faster than with regular trades.
Cryptocurrency markets are still young and volatile. Hence, most exchanges don’t share information and work on their own. Most cryptocurrencies experience many quick rises and sharp drops, which lead to price disparities and profitable arbitrage opportunities.
There is less competition compared with traditional markets. Not every arbitrage trader is willing to give crypto a chance, which makes crypto space less competitive.
Cryptocurrency price differences tend to range from 3% to 5%, and sometimes reach up to 30–50% (in extreme cases).
How to find arbitrage opportunities between exchanges
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When comparing small exchanges and large exchanges, most arbitrage opportunities can be found, because the difference in activity means that the price of small exchanges will not change from second to second.
For example, we will use Binance and kudx exchanges:
Step 1 - compare exchange price.
look:
Step 2 - we buy 1 btc at a price of $24,257 USDT the Binance.com exchange
Step 3 - we transfer btc to kudx.com exchange
Step 4 - we sell 1 btc at a price (Market order) of $25,845 USDT on the kudx.com exchange
Our profit is $1,588 After all these steps, we transfer our USDT to the Binance exchange or any platform / wallet
Lets look at my example
I made a deposit of 0.1 btc
Transferred 0.1 BTC to spot balance and sold on Kudx exchange
Withdraw funds to Binance earning ≈150$
HOW CAN YOU START ARBITRAGE TRADING?
- Register an account binance.com invitation code:CPA_004AKJHDGM
- Register an account kudx.com invitation code: LX96MW
- We recommend starting at 2,500$ to get real profit (i started with 0.1btc)
- Do not believe? Try to exchange 15$ and you will understand everything