Crypto Arbitrage: Profiting from Price Differences
Bitcoin is $50,000 on Binance but $50,200 on Coinbase. Can you buy on Binance and sell on Coinbase for a risk-free $200 profit? Yes. That's Arbitrage.
Types of Arbitrage
- Inter-Exchange: Buying/selling the same asset on different exchanges.
- Triangular: Trading 3 pairs (e.g., BTC -> ETH -> USDT -> BTC) on a single exchange to exploit pricing inefficiencies.
The Risks
- Transfer Times: Crypto transfers can be slow. The opportunity might vanish while you move funds.
- Fees: Withdrawal and trading fees can eat the entire profit margin.
Check if an opportunity is actually profitable with the Arbitrage Calculator.