The Beginner’s Guide to Bitcoin Arbitrage
Crypto arbitrage trading 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 crypto 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
Most arbitrage opportunities can be found when comparing smaller exchanges with larger exchanges, as the difference in activity means the price on the small exchange isn’t changing second by second.
As an example, we will use the binance and bitkey exchanges
As an example, we will use the binance and bitkey exchanges
Step 1 — we buy 1 btc at a price of 36,000 usdt on the Binance.com exchange
Step 2 — we transfer btc to Bitkey.vip exchange
Step 3 — we sell 1 btc at a price (Market order) of 37,853 usdt on the Bitkey.vip exchange
Our profit is 1,853 usd. After all these steps, we transfer our USDT to the Binance exchange or any platform / wallet
What is usdt?
Tether (USDT) is a popular stable coin which is tied to the US Dollar at a 1:1 exchange ratio.
Is Arbitrage Illegal?
Arbitrage is completely legal as the only thing that is being done is exploiting price gaps between exchanges. A person conducting arbitrage is just buying and selling as any other trader would do.
Is KYC required to start arbitrage?
Binance — limit 2 btc without KYC
Bitkey.vip — 2 btc limit without KYC
How can I start arbitrage trading?
1- register an account binance.com invitation code: R3S3WQA
2- register an account Bitkey.vip invitation code:
3- we recommend starting at $ 10,000 to get real profit
