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.
- A wide range of opportunities. There are more than 200 exchanges where you can buy and sell cryptocurrencies, which means a plethora of profitable arbitrage opportunities.
- 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).
Needless to say, cryptocurrency arbitrage works best when you trade high amounts. Lesser amounts may result in minuscule earnings that may not be worthy of your time. Indeed, cryptocurrency arbitrage can be a highly lucrative activity, but only if you do your research, estimations, and calculations.