Compared to most financial markets, crypto is among the newest assets in the space. To that end, investors keep discovering new ways to profit from the digital assets market. Traditionally, people have been buying the coins they perceive to have profit potential, then waiting to sell them when their price spikes significantly, in what is called “hodling.” Whilst there is nothing wrong with buying low to sell high, there exists another method that’ll allow you to take advantage of price differences across different exchanges instantly. Enter arbitrage trading.
About arbitrage in crypto
If you hold a variety of crypto assets, take some time to check out the prices they are listed at on different exchanges. You may notice a slight difference in prices, either lower or higher. This can be attributed to various factors, such as the trading fees charged by different platforms, their trading volumes, and their liquidity levels.
Large exchanges usually enjoy high liquidity and high trading volumes, thanks to their large number of participants. Therefore, they tend to charge lower prices than their smaller, less popular competitors. Arbitrage trading aims to take advantage of this price discrepancy by buying from the low-cost exchange and selling on the expensive one. However, you need to be on the lookout for trading costs and other hidden fees, for they could turn any potential profits into losses.
Top 6 arbitrage crypto trading platforms
1. Bitsgap
This is an automated platform for trading crypto. Based in the cloud, it boasts a variety of arbitrage trading bots, an intuitive user interface, and a short tutorial video for onboarding beginners. It supports more than 25 exchanges, including household names like Binance, Coinbase, and Kraken. It also supports a wide range of digital tokens, as well as fiat currencies.
To participate in arbitrage trading on Bitsgap, you would first have to deposit fiat in one exchange and crypto in another. The bot then tailors your arbitrage trades according to your account balance. The fees applicable to you will depend on the exchanges you choose and, consequently, your profits. When it comes to security, Bitsgap allows you to keep the API keys to your wallet, which is hosted right on the exchange.
2. Pionex
This is a popular exchange platform for cryptocurrencies. Among its several attractive features, the most touted are its crypto bots, including arbitrage trading bots. Additionally, they charge exceptionally low trading fees, at only 0.05%. What’s more, if you wish to utilize their arbitrage bot, you can do so free of charge.
This bot utilizes a spot-futures trading strategy to execute its trades. This is where it buys a crypto coin on the spot market while shorting the same amount of the coin on the futures market. This way, the investor earns funding fees from the short while maintaining a market-neutral position. You can monitor the performance of your arbitrage trades right from their mobile app.
3. Cryptohopper
Duly registered in the Netherlands, this is a trading bot that is known for its efficiency and seamless experience. It features a simple-to-use interface, where you can access all popular indicators in the market. Their arbitrage offering features a BTC arbitrage bot. This allows you to profit from different pairs listed on the same exchange. They also have an exchange arbitrage feature, which lets you profit from price discrepancies across different exchanges.
There is also a marketplace feature, where traders on the platform interact and share ideas and strategies. However, its subscription model is a tad expensive, but its breadth of features makes the high cost worthwhile.
4. Quadency
This is a platform that boasts of being a one-stop-shop for all your crypto trading needs. Its intuitive interface makes it suitable for beginners and experts alike. It supports all popular exchanges, and with just a few clicks, you can be well on your way to investing your coins for maximum profits. What’s more, you can access their arbitrage bot for free, which you can use to trade more than 1500 cryptocurrencies.
Since the crypto industry is constantly evolving, the Quadency platform also features regular updates. You can also access your portfolio’s analytics in real-time to help you keep track of your investments.
5. Coinrule
This is an automated arbitrage trading software that supports the 10 biggest exchanges. It features an intuitive interface coupled with top-notch security features. What’s more, to create a trading strategy or customize your trading bot, you will need no coding experience. You can arbitrage trade all the major cryptos on Binance, BitMEX, Poloniex, and many others.
What’s more, the bot is available for free, but you can also subscribe for additional features. Whichever plan you choose, you will benefit from round-the-clock trading, quick customer support, several indicators, and many other features. Their website also contains several tutorials and lessons for beginners in the space.
6. Napbots
This is a crypto automation platform that features several indexes and bots, among them arbitrage trading bots. What’s more, it supports copy trading, which means you can tailor your arbitrage strategies following professional traders on the platform. This makes the platform especially suitable for novices and seasoned traders. Additionally, with one subscription, you can manage multiple trading accounts, which is a feature you’re not going to find anywhere else.
Conclusion
Arbitrage trading involves taking advantage of price differences of cryptocurrencies across different exchanges. These differences are often slight, but they make for instant profits. However, you should always consider the trading fees and any other hidden costs applicable to the transaction before proceeding, as these could eat into your profits. You cannot go wrong with any of the bots we’ve discussed above, seeing as they are the reigning market leaders in the space.
