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Crypto arbitrage

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  • 16-01-2018 11:53am
    #1
    tractortom
    Registered Users Posts: 35 ✭


    I did a lot of investigation of arbitrage between different exchanges. Because its an imperfect market differences exist between the price of coins on different exchanges, its possible to make money on the difference. Here is what i did?

    Setup a spreadsheet (lots of them available online) to query 3/4 main exchanges
    Identify price differences
    Only choose large exchanges with lots of liquidity.
    Only choose coins with high prices.
    Take account of your fees.
    Only do one trade at a time.

    Good luck.
    Tagged:


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    #2
    BrokenArrows
    Registered Users Posts: 7,498 ✭✭✭BrokenArrows


    tractortom wrote: »
    I did a lot of investigation of arbitrage between different exchanges. Because its an imperfect market differences exist between the price of coins on different exchanges, its possible to make money on the difference. Here is what i did?

    Setup a spreadsheet (lots of them available online) to query 3/4 main exchanges
    Identify price differences
    Only choose large exchanges with lots of liquidity.
    Only choose coins with high prices.
    Take account of your fees.
    Only do one trade at a time.

    Good luck.

    I suppose you would also need to take into account the amount of time it would take to transfer the coins from one exchange to another and what could happen in that timeframe.


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    #3
    banie01
    Registered Users Posts: 16,795 ✭✭✭✭banie01


    BrokenArrows wrote: »
    I suppose you would also need to take into account the amount of time it would take to transfer the coins from one exchange to another and what could happen in that timeframe.

    +1.
    I've done nicely from exchange arbritrage particularly during December.
    There are numerous factors to take into consideration other than price.
    1. The actual coin itself, is there sufficient demand/liquidity to allow quick sale and transfer?
    2. The transfer costs
    3. The Transfer time and the impact any delay in same may have on the price.

    Arbitrage is the domain of high frequency bots on equity exchanges and it is at the mercy of the mem-pool so far as crypto is concerned.

    Yes there are sometimes very significant pricing differences between exchanges, however the nature of the blockchain can make taking advantage of that difference both pricey and prone to delay particularly with the likes of BTC or ETH dependant on miner load.


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