ᐅ Cryptocurrency Arbitrage ⚡ Simple Guide

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Cryptocurrency Arbitrage - What Is It?

Cryptocurrency Arbitrage - What Is It?

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Cryptocurrency arbitrage is the comparison of cryptocurrency asset prices with the aim of profiting from exchange rate differences.

There are two types of cryptocurrency arbitrage:

Intra-exchange. This involves buying cryptocurrency at a lower rate and then selling it at a higher rate within the same exchange. It works on a simple formula: buy low, sell high, and the difference is your profit.
Inter-exchange. In this case, there's no need to wait for the coin's price to increase after purchase. The fact is that the same cryptocurrency can be traded on several exchanges, and its rate can vary significantly from one platform to another. Therefore, inter-exchange arbitrage involves a trader comparing cryptocurrency prices across all exchanges, then buying where it's cheapest and selling where it's most expensive. The difference in rates, minus transfer fees, is the profit.