Arbitrage in relation to cryptocurrency is the idea of purchasing coins on one exchange and then selling them on a different one so that you can make revenue on the price difference between the two platforms.
This can be achieved by either purchasing on one exchange, transferring your funds over to the other, and selling for a profit, or by doing everything on one exchange that’s going to do all the transferring for you, so that you can keep it simple and fast.
This approach to cryptocurrency trading is pretty simple when you compare it to other methods because there isn’t as great of a need for technical analysis.
It also works pretty well in the cryptocurrency space, compared to other more traditional financial assets, because of the constant volatility of the market.
It is especially helpful with smaller coins which can fluctuate rapidly, and often leave exchanges trying to catch up.
Best Crypto Arbitrage Bots 2022
So, with all this in mind, let’s take a look at what we believe to be the best crypto arbitrage bots in the industry right now so that you can have a go at this relatively simple way of crypto trading, and hopefully make a profit from it.
Pionex It is easily one of the most popular crypto arbitrage bots right now, because it is a completely different type of bot trading platform compared to other trading bots out there.
This is because they have built-in bots in their system, and they have more than 16 for you to choose from. The other thing is that they are completely free for you to use.
They also make sure that their crypto arbitrage trading bots are easy for you to use, so if you’re someone who is in the beginning stages of your trading career, you aren’t going to get confused or miss out on great trading opportunities.
They say that you can make between 15% and 50% APR with their crypto arbitrage bot, which is really good considering crypto arbitrage is a low-risk trading strategy.
If you want to make the most of the arbitrage bot that you find on this exchange, then you’ll need to go to the bottom of their bot list, and choose the arbitrage bot.
Next, you’ll need to choose your preferred leverage and target cryptocurrency, and then fill in your investment amount and select ‘create bot’.
It is going to transfer some of your funds to your futures account, and then create a position for you in the spot and futures market.
Coinrule is another great choice for people looking for a crypto arbitrage bot, but you want the entire process to be super easy and straightforward because you don’t know too much about the cryptocurrency trading industry right now.
They say that they make automated trading really easy for their clients, and they also empower traders to compete with experts in the industry, which means that they are one of those platforms that root for the underdog, which is always nice.
They also talk about how you can get started for free with their platform, and they work with the top ten most popular exchanges and have military-grade encryption and security when it comes to your personal assets, so you don’t have to worry about them being hacked.
They also let their clients have access to their platform 24/7, so that you can develop and create automated trading rules around the clock, and never miss out on an opportunity to trade.
We love that you can back-test your arbitrage trading strategies so that you don’t have to make a trade without knowing whether it is going to be profitable or not.
You can either choose from among 150 existing rules they have, or you can build your own.
Bitsgap is a great choice if you’re looking for a crypto arbitrage bot, and you want to make sure that you align yourself with an existing platform that has a really good reputation.
Considering that these guys have been around since 2017, we think that they have a really good idea of what they need to provide their clients in terms of successful trading strategies and security.
They combine their platform to be a cryptocurrency exchange, as well as an arbitrage platform, and they integrate themselves with more than 25 different exchanges, which can be used to purchase and sell coins with arbitrage.
They say that they offer their clients hundreds of opportunities to make a profit with their features every day and they say that sometimes, their clients are able to make a profit of more than 15%.
They also talk about the issues with arbitrage trading that we have discussed above and say that most of these issues can be solved by using their automated trading software, so you never have to miss an opportunity to trade well.
They have a range of different trading plans you can choose from, and the cheapest pricing plan is going to cost you $44 a month.
Quadency is another super helpful crypto arbitrage trading bot that can simplify your digital asset experience.
They say that they are hopefully a management platform and an unified trading exchange for investors of all different skill levels.
They say they can help their clients easily connect professional tools like analytics and bot strategies so that they can really implement the best trades for their assets.
They say that they have more than 15 bots and strategies available for their clients, as well as 35 exchanges and wallets.
If you are brand new to this platform, you can open a free account with them, and they even have a portfolio rebalancer, so you don’t really have to think about what’s going on with your assets, and you can spend more of your time focusing on your trades.
They provide a boosted portfolio analytics, so that you can see what’s going on with their trading strategies, and they even personalize everything for each one of their clients.
TradeSanta is a really helpful arbitrage trading bot because they say they can help their clients trade cryptocurrency like a professional through their trading bots and powerful terminal.
They want you to be able to trade automatically with proven strategies, bots, and signals, and they also want you to be able to trade quicker so that you can maximize your results.
They say that the first thing that you’ll need to do is create an account, and then connect to an exchange that you prefer, and then choose the pair that you want to trade, so that you can set up your crypto arbitrage bot in just two minutes.
They say they can help their clients with spot and trading futures, as well as long and short strategies, signals and indicators, and even risk management so that you don’t have to throw all your chips in one basket, and lose it all.
They walk you through the process of setting up your bot, and you can even join their community if you want to be part of a group of like-minded people who are all trying to implement the same trades.
The Risks of Crypto Arbitrage
There are a few risks when it comes to arbitrage trading, which you need to think about if you want to start making a profit from it.
The first is slippage. Slippage is how much the price of the coin you are wanting to purchase has changed since you went to execute your trade.
Usually, the amount is going to be pretty insignificant, which means that because you are trading with super tight margins, with arbitrage, every cent is really important.
Slippage is a bigger issue when it comes to smaller coins, because a lot of the time, they can experience liquidity issues, which can result in you paying a less-than-favorable price.
The next thing to think about is price movement. The traditional volatility of cryptocurrency is a double-edged sword in this example.
Of course, it can provide you more opportunities to make a profit, but it can also get rid of them really quickly, and some of the time can leave you with fewer coins than you began with. This kind of volatility is more common with smaller coins.
Another thing to think about when it comes to arbitrage trading is fees. Most cryptocurrency exchanges have charges whether it is to deposit, withdraw, or trade.
When you trade with arbitrage, your margins are so slim that you have to take these fees into consideration.
If you manage to purchase a coin on one exchange, and then you sell it on a different exchange for a gain of 1%, but that exchange charges you a 0.3% fee, then you have already had to give up 60% of your profit , which is going to be even less if you aren’t the trade on a centralized platform, and you need to pay withdrawal and deposit fees.
What Is Arbitrage Trading?
Arbitrage trading is where you purchase and sell the same asset in different markets, so that you can take advantage of the difference in price between the two exchanges.
For example, if you are currently trading Bitcoin, you might want to purchase your Bitcoin on one exchange, and then sell it on another, where there is a considerable price difference.
This is an effective type of cryptocurrency trading, and it has been used in conventional stock markets as well.
It is a great way to make small profits consistently, but you’ve got to keep your eye on the market and know what it’s doing at all times.
Why Use an Arbitrage Bot?
As we have just mentioned, one of the slight disadvantages to arbitrage trading is that you have to be on the ball when it comes to the market.
Arbitrage trading relies on being able to detect small differences in value, which means that if one exchange goes down slightly, you will want to quickly swoop in and purchase your cryptocurrency.
On the other side of this, if another exchange increases the value of the cryptocurrency coin, you will want to be aware of this, so that you can quickly get rid of your assets.
Of course, you can’t be at your computer all day and all night, so the best way to take advantage of this type of cryptocurrency trading is to invest in an arbitrage bot.
An arbitrage bot can automate the entire process for you, so all you need to do is implementing your crypto strategies with your arbitrage bot, as well as what you’re wanting them to do for you, and then set it to automatic.
Is Using an Arbitrage Bot Illegal?
Using an arbitrage bot is definitely not illegal, but one thing that you need to know when you are trading cryptocurrency in general is the local rules and regulations around doing so.
The more you are aware of this, the better you are able to make safe trades, and don’t forget about the tax season either.
The bottom line is that there’s nothing wrong with using a bot to automate your arbitrage trades, you’ve just got to make sure that you’re working with one that is worth your time.
As you can see, there are a few exchanges and platforms out there that you can make the most of when it comes to crypto arbitrage bot trading.
Hopefully through showing you those that are going to be most suitable for your needs have given you a little bit more insight into arbitrage draining in general, so that you can put your best foot forward, and learn how to make informed trades in a way that is going to bring in small amounts of profit on a regular basis.
Naturally, trading of all different kinds comes with its risks, which means that arbitrage is no different, so make sure that you are only investing and trading funds that you can afford to lose and make sure that you do the necessary research, so that you know exactly what you are doing with your assets.
Crypto arbitrage bots can be profitable, but you need to choose a good arbitrage bot if you want to be successful.