Cryptocurrency arbitrage is one of the options for making money. The idea of arbitrage is to benefit from market inefficiencies.
If there is a difference in the price of one asset on different exchanges, a trader can benefit from buying and selling it in different markets. The difference in rates will become the reward of the trader. This approach works for any security that has different prices at least for two exchanges (crypto-arbitrage is also available in the same exchange). Arbitrage can also be used for international currencies, metals, etc.
How Does Crypto Trading Arbitrage Work?
Consider arbitrage trading step-by-step:
Find a cryptocurrency that is traded on at least two exchanges (it is also possible to arbitrate on a single exchange, but it is easier to consider two different exchanges).
Gather order books from both platforms to evaluate the interest of traders.
Compare the opportunities for both exchanges and find the perfect correlation between them.
Buy the asset at the lowest price on the exchange.
Remove the crypto asset from the second exchange.
Sell the cryptocurrency for the second exchange.
Keep buying and selling until your chosen correlation is over.
Some Top Exchanges To Make Arbitrage
Binance is, without a doubt, the most famous crypt exchange. It charges relatively low fees and is one of the most secure trading platforms. Binance operates worldwide, which is proof of its reliability. If you want to know how to use Binance for successful trading, read the article How to trade Binance.
Extoid Exchange is founded by a community of blockchain enthusiasts and focuses on cryptocurrency trading. They deliver tools and features that match the needs of even the most challenging and sophisticated traders. They have the most secure exchange to buy & sell cryptocurrencies.
Zeabit is among the top secured exchanges for arbitrage too. They are offering the best rates in the market. It offers a platform for purchasing and selling cryptocurrencies. It’s also one of the most secure platforms that operates significant funds and provides a high-level of security to protect the funds of its clients.
You can buy BTC, ETH, BCH, BTG, or LTC in just a few minutes. They process transfers very fast, and in no time will you have your coins ready for trading. Their withdrawal process is just as fast.
Their trading interface is very intuitive, so even newbies can exchange without any issues. The website has all the main features specifically set out for consumers who are making trading a breeze. It also offers a lot of insightful knowledge about how to sell better and improve your odds of making a profit at home.
The cryptocurrency exchange website is well built and responsive to all platforms. If you're trading on a laptop computer, a tablet, or a phone, the user interface is the same. To make it much simpler to exchange, Zeabit has a very useful mobile app that is lightweight and small enough to run on any mobile device.
Bitfinex is one of the leading crypto platforms that provides a convenient interface and 24/7 support to its clients. In addition, you can customise the app interface that will serve your purpose. This platform offers a demo account that you can use to test trading strategies. You can find price and trade volumes for coins on the website.
You should certainly use crypto arbitrage if you want to make a return on the crypto market. It's a perfectly legitimate way of making money. In addition, bots and software would make trading simpler and more effective. But even though this trading approach is not difficult, there are some pitfalls that you should be aware of before joining the market.