What is arbitrage? Why is it so profitable?


Arbitrage is the practice of making a profit by exploiting the price differences of cryptocurrencies across different exchanges or markets. For example, if Bitcoin (BTC) is selling for $60,000 on exchange A and $60,600 on exchange B, you buy on A and sell on B, easily pocketing a $600 profit after deducting fees!

Why are arbitrage profits attractive?
- Market fragmentation: Hundreds of exchanges worldwide, prices often out of sync, many arbitrage opportunities.
- High Volatility: The price of the currency fluctuates dramatically, with price differences that can reach 1%-5%, amplifying profit potential.
- 24/7 Open: The crypto market operates around the clock, allowing you to seize opportunities at any time.

How great is the potential?
Assuming you use $10,000 for cross-exchange Arbitrage, capturing a 1% price difference, and after deducting a 0.2% transaction fee, you net $80 per trade. If you operate several times a day, the annualized return could reach 10%-20%! The larger the capital, the more astonishing the compound growth!
BTC0.9%
B5.69%
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