WHAT IS ARBITRAGE?
Arbitrage is the practice of taking advantage of a price difference between two or more markets or pricing inefficiencies to generate a profit. It involves simultaneously buying and selling the same or equivalent assets in different markets or in different forms to capitalize on the price difference.
HOW DOES ARBITRAGE TRADING WORK USING CRYPTO?
Arbitrage in the cryptocurrency market involves identifying and taking advantage of price discrepancies between different cryptocurrency exchanges. Here’s how it typically works:
1. Identify the price difference: Arbitrageurs monitor the prices of a particular cryptocurrency, such as Bitcoin, across multiple exchanges. They look for situations where the price of Bitcoin is lower on one exchange compared to another.
CAN I DO ARBITRAGE AS A BUSINESS?
Yes, it is possible to pursue arbitrage as a viable business model, including in the cryptocurrency market. Here are some key points about running an arbitrage business:
1. Identify profitable opportunities: The core of an arbitrage business is finding and capitalizing on pricing inefficiencies across markets. This requires continuously monitoring prices, spotting discrepancies, and acting on them quickly.