Crypto Arbitrage: Everything You Need to Know to Profit

Ready to take your cryptocurrency investing to the next level and take advantage of the constant price movements? Crypto arbitrage will probably seem like an attractive prospect.

Crypto arbitrage can literally mean making money out of thin air. But done wrong, it can mean losing huge sums, so make sure you know what you’re doing before you dive straight in. 

Crypto arbitrage means buying cryptocurrency on one exchange and selling it for a higher price on another exchange, allowing you to make a profit.

What Is Crypto Arbitrage?

Spatial arbitrage This type of arbitrage involves purchasing crypto from one exchange and immediately selling it on another for more money.

Types of Arbitrage

Convergence arbitrage Here, a coin bought on one exchange is sold short on another exchange. The goal is to see both prices converge, and which is when arbitrageur closes both positions.

Triangular arbitrage This is the most complicated strategy and involves trading across more than one trading pair.

-Variations in liquidity: Every exchange has a different amount of liquidity for each asset, depending on how many people buy or sell it.

Why is Arbitrage Possible?