Simple Guide to Cryptocurrency Arbitrage
Cryptocurrency arbitrage is becoming a hot topic of discussion among cryptocurrency traders and investors.
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
As the name implies, this is the easiest form of сryptocurrency arbitrage and one of the most common. You buy a particular cryptocurrency, such as Bitcoin, on one exchange at a low price and you sell the same cryptocurrency for a higher price on a different exchange.
Why Crypto Arbitrage Might Be Lucrative
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
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 — we buy 1 btc at a price of $24,257 USDT on the Binance.com exchange
Step 2 — we transfer btc to kudx.com exchange
Step 3 — 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
How can I start arbitrage trading?
- Register an account binance.com invitation code: SXUTSUMY
- Register an account kudx.com invitation code: US19C2
- We recommend starting at $ 2,500 to get real profit
- Do not believe? Try to exchange $ 15 and you will understand everything
