Bitcoin Arbitrage

Bitcoin is one of the widely traded cryptocurrencies. Hence, for expanded opportunities traders look for bitcoin arbitrage windows. Bitcoin arbitrage involves buying bitcoins from one cryptocurrency exchange and then selling them on another exchange. Typically, you would buy bitcoin from a cryptocurrency exchange that has a lower trading price for bitcoin. Then, you would sell it at another exchange where the market price of bitcoin is higher at that time. Thus, you buy bitcoin at a lower price from one exchange and then sell at another for a higher price. The difference between the price at which you bought, and the price at which you sold, is your potential profit. Apart from this, you can even trade across cryptocurrency pairs. This involves equating the value of bitcoin against another cryptocurrency. You buy from an exchange that offers more bitcoin for a particular number of tokens of another cryptocurrency. Subsequently, you sell at another exchange that offers more units of the other token per bitcoin. These calculations do not include any brokerage or transaction fees. So, you have to determine such factors in order to evaluate the exact amount of profit you have made.
Spotting Bitcoin Arbitrage Opportunities
With Bitcoin arbitrage crypto traders can make money, but actual profits may depend on how well crypto arbitrage traders can spot arbitrage opportunities. Especially for beginners, spotting these opportunities can be challenging. You need to find a cryptocurrency exchange where the prevailing market price is below the current intrinsic value of bitcoin. Once you have found such an exchange, you buy bitcoin from it. Then you try to find another exchange where bitcoin is trading at a price that is at par or above the intrinsic value. Then, you sell the bitcoin bought earlier, on this second exchange. Thus, the profit that you can make directly depends on how well you can spot crypto arbitrage opportunities, also known as arbitrage windows.
If you don’t wish to look at the intrinsic value while attempting bitcoin arbitrage trading, you can just trade based on the prevailing prices. This involves just looking at the current market prices of bitcoin across different cryptocurrency exchanges. You look for an exchange with a lower prevailing price and another with a higher prevailing market price. Then you buy from the one with the lower price and sell at the one with the higher price. This method involved holding bitcoin for a short duration. However, if you choose to try this then you must also look at the depth of the order of books. This will help you determine if there is enough liquidity on the two cryptocurrency exchanges for you to execute your trades. Once you find the two exchanges with a suitable price difference and enough liquidity, you can go ahead with your trade if you deem fit.
The Torex Crypto Trading Platform Advantage
It can be challenging to manually parse through different exchanges in order to spot bitcoin arbitrage windows. Additionally, the bitcoin prices are volatile so they may change by the time you are done going through all the exchanges while searching for an opportunity. Since bitcoin arbitrage relies on trading in larger volumes to potentially maximize profit, even small price fluctuations impact your profit margin. To make this process easier, you can create a free account on Torex within minutes and use their Arbitrage Tool, Price Checker and Price Notification.
Torex’s Arbitrage Tool supports multiple exchanges and multiple currencies. It automates the entire process of looking for a crypto arbitrage window thus helping you find arbitrage opportunities much faster.
Price Checker cryptocurrency tool allows traders to check the price of precelected cryptocurrency pairs on supported crypto exchanges.
Price Notification allows you to receive instant notifications of cryptocurrency price changes via Telegram messenger.
Torex supports Binance, Bittrex, BKEX, Coinsbit, Crex24, Huobi, Poloniex, Bitfinex and KuCoin cryptocurrency exchanges. More exchanges are considered to be added in the future. Torex cryptocurrency trading app is already available at Google Play.