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Crypto arbitrage guide: How to make money as a beginner

Buy cryptocurrencies at a lower price and sell it a higher price

What is crypto arbitrage?

Cryptocurrency arbitrage is a type of trading that exploits differences in prices to make a profit. These price differences commonly referred to as “arbitrage spreads,” can be used to buy a cryptocurrency at a lower price and then sell it at a higher price.

For example, if BTC ( Bitcoin) is being sold for $8,050 on Coinbase Pro and $8,200 on Binance. You could buy some amount of BTC at a lower price and sell it at a higher price.

There are different types of arbitrage that exploit price differences in different ways. However, they all involve finding these spreads and quickly acting on them.

In 2020 the types of crypto arbitrage spread anywhere from 0.2%-4%. Sometimes upwards of 20% will appear but they’re rare.

If you can act on arbitrage spreads enough times in a day though, it can be worth your time. Arbitrage is a great tool when prices aren’t moving much in a day and other crypto day trading strategies, such as swing trading, aren’t entirely viable.