The negotiation/trading capacity within the cryptocurrency marketplace is on a constant rise. For the past few weeks, Blockchain technology draws the attention to more and more investors and traders.
Since it is a new market on the rise, we will encounter countless opportunities of arbitrage due to some inadequacies. However, before embarking on this new adventure, it is important to fully grasp the concept of buying and selling cryptographic currency.
It is safe to say that only a tedious market analysis will minimize risks and actually improve the return on investment. Also, the best trick to succeed in an arbitration is the actual access to big gaps within the trading volume of different transactions.
Bitcoin, Ethereum and Bitcoin Cash as leaders of arbitrations
Etherum and Bitcoin are very popular cryptocurrencies with large amounts of liquidity at their disposal. The unexpected success and fast development of digital currencies have allowed the implementation of several assets for trading experts; which has made them extremely liquid to perfectly meet the user needs.
At the moment, Etherum capitalization is estimated at around 72 billion USD, and 252 billion USD for Bitcoin. That is why both currencies are the leaders on the market.
Most of the arbitrations that have the potential to bring about the most benefits are focusing on these types of currencies only.
Arbitration risks for cryptocurrencies
Fraud is the first thing to avoid when dealing with the trade within the cryptocurrency market. Indeed, the scam is the number one inconvenient of this technology, without taking into consideration the potential hacking.
However, these risks seem to decrease when the asset class evolves. A well-researched arbitrary represents a smart solution in order to be successful while investing very little.
It is important to know that cryptocurrencies rely primarily on the code so it is important to get started with that. Only then we add the extraction of the chosen cryptographic currency within the trading strategy set in place.
The arbitrage between Bitcoin, l’Ethereum and Bitcoin cash
As a general rule, there are two strategies for cryptocurrency arbitration: one is related to the arbitration between the different prices for the chosen cryptographic currencies and the second is related to the arbitration between the trades within different localities. To actually showcase the real value of Bitcoin,Ethereum and Bitcoin Cash, depending on the development of the marketplace.
In order to simplify the process of arbitration between currencies, the users can trust “bots open sources” that are working very well. These tools give the possibility to have a closer look at the ratio of cryptocurrencies and to plan buy and sell transactions at the right time in order to maintain a flat rate.
Bots arbitrage examples for cryptocurrencies
The exchanges between cryptographic currencies are creating arbitrage opportunities that need to be harnessed in order to fully take advantage of the actual benefits. However the gap between currencies is really hard to notice, especially when the process is done manually.
In these particular situations, the arbitrary robots are having an important role and really manage to simplify the process.
Among these tools, we can encounter for example Blackbird, an open source arbitrary bot using C++ language, Bitcoin arbitration with a flexible interface, and Bitcoin Dealer that can only be used for a certain exchange.
We have also Tapibot that offers a source code available on GitHub.
This is just a way for the company to provide support to their expert users for other transactions.