Today we will talk to you about cryptocurrency arbitrage. While some speculators are trying to mine cryptocurrencies, others are successfully making money in this area without investing in hardware. They manage to make money through arbitrage on the cryptocurrency exchange, which is suitable for any speculator.

Speculators make profit due to the difference in quotes on different trading platforms, which appears as a result of decentralization of the activities of individual exchanges.

The principle of making money on arbitrage

Let's first look at how you can make money on arbitrage. Due to the fact that the value of cryptocurrencies is constantly changing, quotes fluctuate, but on different exchanges this happens at different speeds, as a result of which the cost of cryptocurrencies can differ significantly. The main tasks of speculators are as follows:

• Buy cryptocurrencies at the best possible price.
• Transfer to the exchange where the cryptocurrency costs the most.
• Exchange cryptocurrency for dollars.
• Transfer funds to the site where the cryptocurrency was purchased at a favorable price.

After this, the process described above is repeated again.

Pros and cons of arbitration

Arbitration has the following advantages compared to other ways to earn money:

1. A trader does not need fundamental knowledge and features of the financial market.
2. There is no need to conduct a market analysis.
3. No experience needed.
4. Minimum level of risk.

It is worth noting that there is still a risk. And it is impossible to completely eliminate risks. The main risks are present at the time of transfer cash to another exchange, where the trader plans to sell the cryptocurrency, since the price may fall sharply, as a result of which the trader may not only lose profit, but also incur losses.

In order to minimize the level of risks, it is recommended to trade during periods of calm in the market. In this case, the trader will calmly carry out transactions and receive his profit. Now let's look at the types of strategies based on arbitrage.

Traditional Strategies

This type is classic; it involves trading one asset on different exchanges. This is classic speculation - you buy cheaper and sell more expensive. Traders manage to earn income due to the lack of an effective technical base due to the slow processing of orders. For these reasons, the use of classical arbitrage strategies is almost completely safe.

The essence of this style of trading is to monitor quotes on different exchanges and look for cryptocurrencies with different values. After this, you need to calculate the potential profit, taking into account the conversion and the size of the commission. If a positive result is received, the trader takes action. The operating principle is as follows:

1. Wallets are opened in popular electronic payment systems.
2. The prices of cryptocurrencies from different exchanges are studied.
3. As soon as it is revealed advantageous offer, cryptocurrency is being purchased.
4. The funds are then transferred to another exchange where the value of the cryptocurrency is higher.
5. Cryptocurrency is sold at more than favorable exchange rate, after which the money is withdrawn.
6. Then the whole process is repeated again.

The key to success

Considering today's market conditions, to make money on arbitrage you need:

1. Possess initial a sum of money at least 100 dollars.
2. Find exchanges with favorable conditions and convenient withdrawal methods.
3. Conduct transactions during calm periods in the market, when risks are minimal.
4. Carry out transactions if you find a price difference of at least two percent.

Specific example

For a clearer understanding, I suggest considering concrete example. Let’s say in May 2017, 1 bitcoin on LiveCoin cost $1,810. At the same time, on EXMO its price was $1,830. The difference between the prices was as much as 20 dollars. And this is approximately 1 percent, and not 2, as the strategy recommends.

However, the difference is not bad, and you can make a good profit if you buy Bitcoin on one exchange and sell it on another. If we subtract the commission and transfer fees from this difference, we get $15 in net profit.

You can look at the cost of Ethereum on the same exchanges, we see that on the first it costs 207 dollars, and on the second 201. The difference is almost three percent, and these are ideal conditions for arbitrage.

Statistical arbitrage strategies

The second type of strategy is based on the theory that cryptocurrencies on different exchanges are correlated with each other, so that an increase in price on one exchange will lead to an increase in quotes on another. This style of arbitrage is familiar to many speculators in the Forex market, as this trading tactic brought good profits several years ago. In this case, the speculator’s main task is to find the fastest-updating quotes, and to trade on the exchange where prices are updated with a delay.

The principle of trading cryptocurrencies is the same as any other asset. But in this case, certain risks arise, since the trader has no guarantees that an increase in prices on one exchange will lead to an increase in quotes on another exchange. But more often than not, this trading tactic brings profit.

You can trade in this way either one currency or several. You can use the connection between Bitcoin and Litecoin. There is a certain connection between these currencies, and it is quite strong. If you superimpose these 2 charts on top of each other, then at the moment of a significant divergence in quotes you can find good points to enter the market.

The principle is as follows: as soon as the quotes of one cryptocurrency drop excessively in price, you need to purchase it. If Bitcoin has fallen excessively, then you need to buy it, and if Litecoin has fallen in price, then you need to buy Litecoin.

Automation of the process of identifying optimal places to open orders

Experienced traders put a huge amount of effort into creating the first type of arbitrage applications. Today there are several working applications that can handle this task. Unfortunately, they are paid, and their actual effectiveness is quite low.

Whether or not to buy such applications is up to you. But it should be remembered that such applications rarely justify their cost. It is best to wait until truly effective applications appear that can automate cryptocurrency arbitrage trading.

Conclusion

Arbitration on a cryptocurrency exchange is a fairly effective method of generating income. If you decide to use this technique to make money, you should remember that it is associated with certain risks. Relatively recently, many traders used the BTC-E exchange for arbitrage trading, but as a result, its accounts were seized, and all clients lost their capital.

To avoid such a scenario, it is necessary to take the most responsible approach to choosing an exchange for trading cryptocurrencies. You should also periodically withdraw your profits so that if any problems arise at the exchange, you do not lose all your capital.

While some people prefer to invest a lot of money in hardware to engage in mining, others manage to make money on arbitrage without investing a penny in this business. And only you can decide which opportunity to take advantage of.

Arbitrage is a low rate and sale on an exchange that offers crypto coins at a high rate. And so on several times until the desired amount is reached. Each cryptocurrency exchange sets its own rate due to the fact that they are decentralized and not controlled by anyone. Sometimes this difference can reach up to 10%, or even higher. Therefore, the question of how to make money on the difference in different rates is not worth it. To do this, you don’t need any specialized knowledge or any investments. All that is required from a trader is to monitor the difference in rates and catch the moment in time when you can buy or sell assets. Let's try to figure out how to become successful in arbitration.

The principle of making money on arbitrage

The principle of making money on Bitcoin arbitrage is very simple - use the difference in quotes of various digital coins to your advantage. The fact is that arbitrage cryptocurrencies have quite a noticeable difference in price on different cryptocurrency exchanges. Therefore, the principle of making money on arbitrage is quite simple - buy cheaper and sell more expensive. Even a child can master this.

In principle, it is precisely because of the simplicity of operation that this method of earning money has gained such wide popularity. In addition, this is facilitated by the fact that the price of cryptocurrencies is constantly changing. Even throughout the day, exchange rate fluctuations can be 20% or even more. And if you wait a couple of days, you can even get rich several times over.

To summarize, arbitrage allows you to get maximum profit for a very short term. In this case, you do not need to make complex mathematical calculations, as for a standard game on the stock exchange, or invest a lot of money, as in mining. Quotes on different exchanges constantly fluctuate, and since they do not do this at the same speed, you can make money on this phenomenon. In fact, this is ordinary speculation.

Let's look at how to make money on cryptocurrency arbitrage:

You can repeat such operations countless times, but not all exchanges allow you to quickly withdraw money from your account. This can slow down your earnings. In addition, knowing what cryptocurrency arbitrage is, a speculator must understand that the more coins he exchanges, the greater the immediate profit will be. Doing Arbitration small amounts, you won’t get much profit, but you may even end up at a loss.

Classic arbitrage

Classic cryptocurrency arbitrage is a type of spatial exchange. Operations are carried out on the same financial instruments, but the majority of arbitrage transactions are carried out on different ones. In any case, the goal of classical arbitrage is one – to make a profit.

The user receives money due to the inefficiency of the execution system and aggregation of price quotes. Thus, classical type arbitration becomes virtually risk-free.

We’ll talk about how to make money on cryptocurrency arbitrage below.

But classical arbitration will be effective only if:

An example of successful cryptocurrency arbitrage transactions can be seen in the following table:

Exchange STEEM/BTC
Pair	Exchange	Buy	Sell	Last course	Volume 24
steem_btc	bittrex	0.00048091	0.00047591	0.00047599	983419.2
steem_btc	poloniex	0.00043743	0.00043735	0.00043735	255075.7
8.7968360652
Exchange LTC/EUR
ltc_eur	exmo	133.999732	133.11	133.11	251126.6
ltc_eur	wex	123.763	122.853	123.763	586318.7
7.5523379362
Exchange ETH/EUR
eth_eur	exmo	730.47999999	726	726	1397317.5
eth_eur	wex	675.41916	673	673	565766.3
eth_eur	sex	679.99	672.01	671.61	1105.4
7.4888073948

Statistical arbitrage

If everything is more or less clear with the classic version, then statistical inter-exchange arbitrage of cryptocurrencies remains an unexplored area. It’s not surprising, because this arbitrage strategy is noticeably different from its counterpart. Main task a person who is engaged in this type of trading is to find a pattern observed in the price movements of various cryptocoins, and use this find in trading.

To conduct statistical arbitrage on cryptocurrency exchanges, you need to do the following:

1. First, you need to select the cryptocurrencies with which you will conduct transactions. Moreover, it is not necessary to immediately grab the top cryptocurrencies. Of course, Bitcoin transactions are profitable, but many experts believe that the market is too overheated.
2. For analysis, you can use the correlation coefficient. It will help you figure out which currency is overvalued and which is undervalued.
3. Next, buy/sell one or another currency and make a profit.

The most common example of such trading is pair trading, in which cryptocurrency arbitrage takes place on two exchanges using two instruments. True, in this case one cannot count on high operational efficiency, but the system looks flexible.

Something like a flexible strategy is being formed, within which you can work with virtually no risk and trade within the limits of what is permitted. Profit is floating, so you most likely will not see stability here. But statistical arbitrage between cryptocurrency exchanges is more often used by professionals, since it is noticeably more complex than its classical counterpart. But if you believe the theory, then using this strategy, you can create a stable artificial instrument, using dynamic scales to calculate the size of positions that are opened.

But there is a problem in forming this tool, and it lies in the search for relatively stable inefficiencies. The cryptocurrency market is too volatile and unstable, which means the dependencies are the same. And if an unstable dependence is used for the graph, it simply will not correspond to reality. A chart that has moved to the side is ineffective, and the package collected by the trader will lose its neutrality in relation to the market.

To engage in arbitrage, you need to select a list and exchangers that are suitable for this activity. To do this, you need to pay attention to several factors. First of all, on the course of crypto coins, because this is where we will make money. Then be sure to pay attention to the commission that the online exchange charges for working on it. Most sites do not require a commission when you deposit money on them, but you will have to pay for withdrawal. And the commission in exchangers is even higher.

Let's take a look best exchanges cryptocurrencies for arbitrage:

But exchanges are not the only place for cryptocurrency arbitrage, because there are also exchangers:

Conclusions

Earnings from cryptocurrency arbitrage in 2018 could be truly large amounts, if you skillfully approach the execution of speculation. The cryptocurrency market is developing, so it is still possible to engage in arbitrage trading. But in developed markets such speculation is no longer effective.

Even beginners can engage in such activities, since even primitive strategies can be used. In addition, there is no need for additional costs. This is a promising direction for traders. Minimum risks and profits for one trade of $7 (with an asset of one hundred dollars) are far from the limit. Within a day, the investment will pay for itself, especially since, in fact, you have nothing to lose. But there are risks, albeit minimal ones. Therefore, it is advisable to undergo training before starting to fully work with digital money.

The principle of classical arbitrage is based on making a profit from price differences in different markets.

The demand for cryptocurrency is constantly growing, and it is gradually becoming a worthy analogue of official money. At the same time, as a trading instrument, it is beginning to arouse more and more interest among traders, which cannot be overlooked by the explosive growth in the number of crypto exchanges and trading turnover.

The cryptocurrency exchange market is still quite young, but is actively developing. The fact that the market is still in its infancy plays into our hands, as it opens up large number arbitrage opportunities. Below is current list cryptobridge, sorted by trade turnover. As you can see, the undisputed championship is now held by OKCoin with 54 thousand daily turnover.

The principle of classical arbitrage

No one will argue that the most attractive strategy for trading on the stock exchange is arbitrage. At its core, it involves minimal or no risk. Thus, even minimally profitable strategy with sufficient turnover it should bring tangible profits.

The principle of classical arbitrage is based on making a profit from price differences in different markets. This is a type of so-called spatial arbitration, where transactions are carried out by representing the same instrument traded on different exchanges. Usually the task comes down to a banal thing - buy cheaper in one place and sell more expensive in another.

Prices on exchanges vary due to the natural effect of decentralization and the still weak development of the market, primarily from a technical point of view - exchanges still operate on rather slow web technologies. Since profits often come from inefficiencies in the execution and quote aggregation system itself, classic arbitrage strategies are considered almost win-win. Of course, we do not take into account the risk of a simple technical error, which could negate all the benefits.

Arbitrage, long familiar to Forex traders

We buy the catching up currency and sell the leading one, and at the moment of their contact we close the deal.

This strategy should be very familiar to traders on the decentralized Forex market, where there is also no single order book. This method of work allows any broker to give arbitrary quotes, which is why leading and catching up ones begin to appear absolutely naturally, that is, the price of the same instrument can change with a noticeable delay. Naturally, the number of people who want to “restore justice,” that is, to bring prices on all exchanges to equilibrium, is growing, and the difference is gradually equalizing until trading in an instrument completely loses its economic meaning.

Unlike Forex, crypto exchanges are more like traditional ones exchange offices, since in the end you receive real currency in your hands. Since the cryptocurrency itself has emerged relatively recently, and liquidity on exchanges is not yet high enough, arbitrage situations occur much more often than on instruments with higher turnover. Add here the problems with reverse conversion of funds, that is, withdrawal back into fiat (official) money, and we get market leaders and outsiders that are obvious to the naked eye.

Simple trading arbitrage strategy

Actually, the simplest arbitration looks something like this:

1. We buy currency 1 for currency 2 at a low price
2. Transferring currency 1 to another exchange
3. We sell currency 1 for currency 2 at a higher price
4. Profit.

Let's set the situation. Let's say the rate for BTC/USD on the BitStamp exchange is at the moment is $700, and on MtGox the same pair is $720. Theoretically, if we bought one bitcoin for $700 on the BitStamp exchange and sold it on MtGox at 720, we would receive a net profit of 20. We transfer dollars back to BitStamp and repeat the whole process from the beginning.

Of course, in the real market the situation is somewhat different, and the calculations should take into account the commissions of payment systems and the exchanges themselves, but the principle should be clear.

An example of arbitrage on cryptocurrencies

How an arbitrage strategy breaks down

At the dawn of the formation of the exchange, it is precisely this scheme that brings the greatest profit. Over time, when the number of people willing to profit from the free feeder reaches the limit, the difference between the courses disappears. Various commissions and restrictions on transfers begin to eat up all the profits. Add to this the time it takes to wait for the withdrawal of funds, which can simply be frozen, and arbitrage is almost completely destroyed.

For some time, arbitrage between the two largest cryptocurrency exchanges MtGox and BTC-E was a very popular topic. The price of mtgox lagged significantly behind that of BTC-E, creating a seemingly ideal situation.

In fact, long-term arbitrage is quite a rare situation in a highly liquid market. At the end of 13, the spread between exchanges increased by an order of magnitude, but this difference was mostly caused by an artificial method, including restrictions on withdrawal from MtGox.

Statistical arbitrage – more flexible

Statistical arbitrage is very different from its classic friend. In essence, statistical arbitrage has much more in common with conventional trading strategies that rely on probability calculations. The main task is identify patterns of price movements of different instruments and use them in trading.

It looks something like this: first, we select a portfolio of dependent instruments, for example, using the coefficient to assess dependencies. Then, having a basket of interrelated instruments, we can determine which of them is currently undervalued and which is overvalued, and make a sale or purchase of one or another instrument.

A particular example of such trading is pair trading, when only two instruments are traded. And although the efficiency of statistical arbitrage is much lower, the strategy itself seems to be much more flexible than trying to equalize prices across different exchanges. The solution often comes down to creating a market-neutral portfolio, the floating profit graph of which moves in a certain channel, allowing risk-free transactions to be made on its boundaries.

In theory, statistical arbitrage allows you to build a stable synthetic instrument using dynamic weights for the size of opened positions. Main problem consists of finding stable inefficiencies. If the relationship is unstable, the chart will quickly move to the side and the portfolio will no longer be market neutral.

Statistical arbitrage on various exchanges

And although Bitcoin still holds the lead in terms of total liquidity, many consider it a highly overheated asset, so you can see an unprecedented variety of different currencies on the market. Surprisingly, the greatest demand for OKCoin is now the LiteCoin pair against the Chinese Yuan.

On BTC-E, the result is more predictable.

This is what a snapshot of the entire market looks like at the moment:

A typical example is pair arbitrage between Bitcoin and Litecoin. The correlation between Bitcoin and Litecoin, as you can see in the image below, is high. Thus, currencies change places from time to time - leading/catching up. We buy the catching up currency and sell the leading one, and at the moment of their contact we close the deal.

If we know for sure that the currencies will come to some parity, then this is a transaction without risk as such, since we make a profit in any case. The problem is that the dependence is not constant and, most likely, such a scheme will not always work perfectly. This does not mean that the method itself is incorrect, but still such work requires some effort to determine stable patterns.

Disadvantages of statistical arbitrage All the same disadvantages inherent in other trading strategies can be attributed. Here we are again playing with probability. And the likelihood that the difference between currencies will remain fixed for a long time or, even worse, begin to increase, remains high.

Conclusions that will bear fruit

If in developed markets arbitrage no longer looks like such an attractive investment, then in emerging markets there are still enough inefficiencies available for ordinary traders to trade.

Trading traditional arbitrage on cryptocurrencies, as happened previously with Forex, loses its meaning due to the costs of additional costs. In turn, there are a lot of simple patterns, which is why even primitive trading strategies should show better results in comparison with foreign exchange market. In any case, studying the nuances of trading on crypto exchanges is a promising and far-sighted direction that will definitely bear fruit.

I present to you the program inter-exchange cryptocurrency arbitrage, which is designed to search for arbitrage opportunities between different exchanges. Before I move on to describing the program for making money on arbitrage, let’s talk about arbitrage in general.

Inter-exchange cryptocurrency arbitrage

So, what is inter-exchange arbitrage? Trading arbitrage is a series of strategies that is based on the divergence in the value of an asset on different exchanges. Thus, in general situation, the trader looks for the moment of price divergence and buys where it is cheaper, and sells where it is more expensive, when the price converges, the trader closes positions and takes profit. This is the simplest and ideal case, but it is not always possible. Therefore, let's look at how you can make money on cryptocurrency arbitrage.

At the moment, I can offer three types of trading arbitrage:

1. The most simple circuit(but still working) - purchase+transfer of cryptocurrency. That is, we buy crypto where it is cheaper, bring it to the exchange where it is more expensive, and sell it there. Thus, we fix profits. I’ll warn you right away, there is a risk in this scheme (although in general, they are absent in arbitration) - this is time. That is, while money is moving from one exchange to another, the price may change, so if you are trading this type of arbitrage, you should choose opportunities with a large divergence.
2. A faster scheme is cryptocurrency margin arbitrage. In this scheme, when quotes diverge, we buy on one exchange and sell on another - margin (i.e., where you can open short positions). In this case, cryptocurrency does not need to be transferred between exchanges, so there are no risks. In fact, this is the most ideal option.
3. And the last type is one-legged arbitration. Its essence is that, if the quotes diverge, buy a crypto pair that is cheaper, and sell it when the quotes converge. Thus, we immediately receive a mathematical advantage (in the amount of the divergence of quotes), i.e., even if there is a series of negative and positive transactions, then in total we will make a profit due to the mathematical advantage.

It is to help you make money on arbitrage that the Inter-Exchange Cryptocurrency Arbitration program was created. The program scans quotes between crypto exchanges at a given frequency and looks for arbitrage opportunities. In the program, you can select the exchanges that the robot scans, the currencies to watch, the currencies to exclude, and also keeps statistics on arbitrage opportunities so that you can find the maximum discrepancies between quotes. You can see in more detail in the video:

With the Inter-Exchange Cryptocurrency Arbitration program, making money on arbitrage will become much easier, and moreover, the efficiency of the trading result will be much higher! Crypto arbitrage is now available to everyone.

The Inter-Exchange Cryptocurrency Arbitrage program is a dynamic program, and new exchanges and new functionality will be constantly added to it, and every user who once purchased the program will receive all updates absolutely free!

The cost of the arbitration program is 345$

Buyers decide which exchanges to add; simply, during operation, they simply write which exchanges are needed, and by counting the number of votes, the priority for adding exchanges will be chosen. Moreover, each trader can order the addition of one exchange out of turn. Together we will make cryptocurrency arbitrage between exchanges more convenient!

!!! ATTENTION!!!

Due to the popularity of the program, scammers have appeared online who offer “hacked” versions of the program. These fraudulent schemes are offered through forums and telegram channels. I've already had people contact me who bought a pacifier. Before you “save”, think carefully - I cannot help anyone, since I do not give discounts to victims, I do not provide support if you did not purchase the product from me and you will not receive updates.

02/26/2019 New release

What's changed:

• 5 new exchanges have been added, now the list of exchanges is as follows (25 exchanges):

• Binance
• Bittrex
• HitBTC
• BitFinex
• Cex.io
• LiveCoin
• Yobit
• Poloniex
• CoinExchange
• Huobi
• Kucoin
• Cryptopia
• Gate.io
• Mercatox
• Bibox
• Coinex
• Kraken
• BitForex
• TradeOgre
• TradeSatoshi

Bibox and Kucoin exchanges have also been fixed (the exchange API has changed)

03/01/2019 New release

What's changed:

• New exchanges have been added, now the list of exchanges is as follows:

• Mercatox
• Bibox
• Coinex
• Kraken
• BitForex

• Due to bankruptcy, the BitFlip and WEX exchanges were removed

30/10/2018 New release

What's changed:

• new exchanges added:

• CoinExchange
• Huobi
• Kucoin
• Cryptopia
• Gate.io

04/28/2018 New release

What's changed:

• added the ability to get demo access for a day to familiarize yourself with the program

04/07/2018 New release

What's changed:

• Poloniex exchange is available for scanning
• Added the “Best Selling Mode” function to search for the best price for selling a crypto asset among exchanges
• Added the ability to disable automatic sorting

02/04/2018 New release

What's added:

• Volumes have been added - volumes for requests in asks and bids are now available in the program
• Added the “Maximum profit threshold” filter - this is a good tool to weed out clones ( different currencies, but with the same tickers)
• Added filter “Min. volume" - set the minimum volume, and if the ask or bid order contains less volume, such an arbitrage opportunity will not be included in the results

Greetings to all blog readers! This time I will tell you about a relatively simple, fast and virtually risk-free way to make money through crypto exchanges. This is earnings on the difference between the cost of the same asset on different trading platforms. Herself The process diagram is simple: we buy crypto on one exchange (where the price is lowest), sell it on another (where it is the highest), return and repeat the process in a circle. It takes little time, does not require deep knowledge of the crypto market and trading experience, and the risk is minimal.

What’s the catch, you ask, exactly what’s wrong! Without going into technical details, the difference in price for the same asset between crypto platforms is determined by the peculiarities of the crypto market. In particular: decentralization, slow transactions, high volatility, lack of a single price order book, etc. The main thing for us is that you can and should make money on this phenomenon. Cryptocurrency arbitrage is usually divided into classical and statistical. Let's take a closer look with an example.

Classic Arbitration 2018 (simple)

This is a type of so-called spatial exchange, where transactions are carried out with the same financial instrument, traded on different platforms. Our goal is to make money. The task: buy cheaper in one place and sell more expensive in another. Since the profit is obtained due to the inefficiency of the execution system itself and the aggregation of price quotes, the classical arbitrage method is considered practically risk-free. Minimal risk Of course there is, but more on that later.

First, you need to monitor quotes on different trading platforms and find crypto pairs with the greatest difference in price between them. Then calculate your expected profit taking into account commissions. If the calculation result is positive, we make a double exchange. The full cycle looks like this:

1. We create and replenish digital wallets in Internet payment systems (Yandex.money, webmoney, payer, etc.)
2. We buy the required crypto coin for fiat (rubles, dollars, euros) on the exchange with the lowest price
3. We transfer it to another, where the rate is noticeably higher. We sell for fiat.
4. We are looking for the most profitable way convert fiat into crypto asset.
5. Repeating the arbitration process

Classic cryptocurrency arbitrage is still relevant in 2018 under the following conditions:

• Your funds for arbitrage are more than $100
• Commission for transactions and transfers between exchanges is less than the probable profit
• Arbitration during low-active trading periods
• The difference in currency pair quotes is more than 2%

Example of an arbitrage exchange

At the time of the publication of the post (05/19/2017 at 22.30), the cost of Bitcoin against $ on Livecoin was 1812 USD, and on Exmo – 1830 USD. The difference is $18 (1%). The arbitrator’s task is to buy on livecoin and quickly sell on exmo. As a result - net profit about $15 (minus 2x0.2% per transaction and transaction fee). Let's look at eth/usd, in livecoin the cost is 206 dollars, in exmo -200; difference 3% (206/200=1.03).

Static arbitrage earnings

Static cryptocurrency arbitrage involves analysis current state crypto market, where a participant buys the most promising asset for growth. Unlike the classical scheme of work, there is a risk of making the wrong choice with subsequent financial loss. In fact, statistical arbitrage earnings have much in common with conventional trading strategies that rely on calculating the probability of profit. The main task is identify patterns of price movements of different instruments (correlation) and use this in trading.

In practice, this is done like this: first, we select several dependent instruments (trading portfolio). We can then determine which of them is currently undervalued and which is overvalued, and make a sale or purchase of one or another instrument. The efficiency of the statistical method is much lower, but the strategy itself seems more flexible than trying to equalize quotes on different exchanges. The solution often comes down to creating a neutral portfolio whose floating profit chart moves in a certain channel.

A typical example is pair arbitrage between Bitcoin and Litecoin. The correlation between Bitcoin and Litecoin is high. Currencies change places from time to time - litecoin goes up, bitcoin goes down and vice versa. We buy the catching up currency and sell the leading one, and at the moment of their contact we close the deal. If we believe that the currencies will come to some parity, then this is a transaction without risk as such... The problem is that the dependence is not constant and such a scheme will not always work perfectly.

Free cryptocurrency arbitrage robot

An equally interesting manual and automated bot is provided by Arbitraging. I started working with it on November 1 and published a review of the arbitration bot.