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CRYPTO TRADING PLATFORM OPENS AN ARBITRAGE TRADING SOFT FOR BEGINNERS

crypto arbitrage trading

April 26, 2021 | 

JOHN K MWANIKI |  0 Comments| 

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Get Into Cryptocurrency Trading Today

Arbitrage trading refers to professional trading in that the user purchases and sells the same assets to take advantage of differing prices in the market and generate profits. Simply put, it is taking advantage of inefficiencies in the market. When it comes to cryptocurrencies, arbitrage is possible because the prices of assets fluctuate over time. 

For instance, if there is a price difference of assets in the same exchange or different exchanges, a user can purchase and sell the same asset in a profitable way. The new platform aims to help newbies in crypto trading and also those working with smaller budgets.

Wide coverage

According to the company, the network has been tried and tested by the first investors since the end of 2017. Arbitao's CTO, Karen Mirrin, during a press release, further affirmed that Arbitao is a different platform from many initial coin offering projects that don't have a working product and possibly never will. Their objective was to establish a tested and functional product before the initial coin offering starts, and they have managed to deliver exactly that.

Currently, the platform offers a comparison of prices from 19 exchanges and can maximize the user's investment to trade, hence gaining more profits. The good thing about automated trading software is that it makes it possible for those outside a closed-loop arbitrage to make profits.

The primary challenge that the platform aims to solve is to make arbitrage trading accessible to beginner traders and provide them with the opportunity to compete with established day traders. According to the company's representatives, the platform targets inexperienced users and arbitrage traders with no resources to scale up to higher levels. They provide the service by decentralizing the user's coins via the arbitrage channel.

The company has two teams based in their two operational offices. One is in London, the other is in Moscow, and the company also outsources to Shanghai.

How to make profits in Arbitao platform

There is very high volatility in the crypto market, and many pairs are experiencing a lack of liquidity. That results in inefficiencies and price differences between exchanges. According to the Arbitao white paper, one can note price differences of specific pairs are up to 5% by tracking different exchanges. Fortunately, the platform offers various ways of learning for inexperienced users and more benefits.

  • Daily profits

A user can profit from arbitraging every day by executing trades on various exchanges at a daily interest of 0.5-0.75%.

  • Sending invitations to friends to join Arbitao

Another way of making profits from the Arbitao is by inviting a friend to join the platform. The company promises to reward every user that invites someone else to participate with 18% of their invitee's investment. The Arbitao team emphasizes that the platform is all about the community.

  • Staking with Arbitao

A user can also earn benefits by staking with Arbitao. The platform offers a reward of up to 5%. The Arbitao website states that staking is a fundamental part of Arbitao's sustainable development. It is valuable for the Arbitao system as it provides benefits like boosting decentralization and improving the blockchain's security. The platform also had a plan to reward all its early investors with special bonuses.

  • Speculating ATAO's price fluctuations

The company also created its blockchain coin called ATAO and an internal exchange called TAOx. By speculating ATAO's price fluctuations, gives a user gets an opportunity to make profits. 

How to calculate an arbitrage opportunity

The first step is to pick the order book data on every exchange for the assets one wishes to evaluate for an arbitrage opportunity. Then place funds on two exchanges that will be monitored for arbitrage opportunities. The funds are used to execute a trade or a simple arbitrage whereby the same asset is bought and purchased instantly whenever an arbitrage opportunity comes up. It is wise to have funds at multiple exchanges since that presents a chance to strike at opportunities the second they occur.

Then one can calculate the arbitrage opportunity in the crypto market by establishing the overlap between the highest bid prices and lowest ask prices for the assets they are evaluating. Whenever the bid price on one exchange is higher than the ask price for another exchange in cryptocurrency markets, that is an arbitrage opportunity. Anything that is overlapping is possibly an arbitrage opportunity.

The third step is selling the asset at the exchange where the price is higher and then purchasing the asset where the price is lowest. One continues selling and buying as long as the arbitrage opportunity is available to take maximum advantage of it.

When the arbitrage opportunity is no longer available, the user starts looking for another opportunity to do it all over again while enjoying their profits. Below are the most common types of arbitrage opportunities:

  • Simple arbitrage

Simple arbitrage involves buying and selling similar crypto assets on different exchanges as quickly as the user can to take advantage of varying price ranges across various exchanges. This type of arbitrage does not need any extra trades to swap the two assets shared by the asset pair with an arbitrage opportunity.

  • Triangular arbitrage

On the other hand, triangular arbitrage refers to a situation that can occur in single or multiple exchanges whereby the price ranges between three different cryptocurrencies present an arbitrage opportunity. That presents a long list of triangular trading patterns that the user can leverage to benefit from differences in an individual exchange pricing.

CONCLUSION

The crypto market is highly volatile, but the rapid price actions present a wide range of opportunities with cryptocurrency arbitrage and trading. The Arbitao platform allows newbies and low-budget traders to benefit from arbitrage opportunities and scale while making profits.

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Total Market Cap The Total Market Capitalization (Market Cap) is an indicator that measures the size of all the cryptocurrencies.It’s the total market value of all the cryptocurrencies' circulating supply: so it’s the total value of all the coins that have been mined.

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Price Cryptocurrency prices are volatile, and the prices change all the time. We are collecting all the data from several exchanges to provide the most accurate price available.

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