Crypto Arbitrage is a cryptocurrency trading strategy that exploits the difference in prices of the same coin on different exchanges

This difference arises due to different levels of supply and demand on these platforms

The basic idea of Crypto Arbitrage is to buy a coin where its price is lower and sell it where the price is higher, making a profit from the difference.

Example of a Crypto Arbitrage deal:

Lets give an example of a deal, a trader found a crypto arbitrage signal and he has information that Bitcoin is trading at $50,000 on one exchange (Exchange A) and $51,000 on another exchange (Exchange B)

- Trader bought 1 Bitcoin on Exchange A for $50,000

- Trader transferred Bitcoin to Exchange B and sold it for $51,000

The difference in prices is $1,000 - this is his net profit for one deal, given the fact that his working deposit allows him to buy 1 BTC, the trader can also work with a smaller deposit, but his profit will be less.

Let's take an example if a trader's working deposit does not allow him to buy 1 BTC,

If a trader deposit is, for example, $10,000, then he will not be able to buy a whole Bitcoin, which costs $50,000. Instead, he will be able to buy 0.2 Bitcoin,

So, if the price difference between the exchanges is $1,000 (for example, buying for $50,000 and selling for $51,000), then when buying 0.2 Bitcoins, his profit will be proportional.

Let's calculate the profit:

- Trader buy 0.2 Bitcoin on Exchange A for $50,000. This costs him:

0.2 × 50,000 = $10,000

- Trader sell 0.2 Bitcoin on Exchange B for $51,000. This brings him:

0.2 × 51,000 = $10,200

- Profit from one trade:

10,200 − 10,000 = $200

- Thus, on each trade the trader earns $200 with his deposit of $10,000. Lets imagine that a trader made 10 such transactions per day, his total profit will be:

200 × 10 = $2,000

So, with active trading with a deposit of $10,000, a trader can earn $2,000 per day.

In addition, after each successful trade, his deposit gradually increases, so after 10 trades, a trader can already work with a working deposit of $12,000.

Yes, Crypto Arbitrage is a full legal trading strategy, as the user simply trades assets on cryptocurrency exchanges using legitimate market opportunities. Arbitrage trades do not disrupt any energy, as they are based on complex market processes, such as price differences across markets.

Cryptocurrency exchanges themselves may periodically adjust the price of coins to lower or increase liquidity on the platform. This allows them to maintain resistance to trading and incentivize market participants. Such actions are also legal and regulated within the framework of their natural operating rules.

In this way, arbitrage operations essentially help the market to move towards equilibrium, promoting competitive pricing and increasing the efficiency of trading between exchanges.