Crypto arbitrage is profitable?
Many of us have heard the word “Cryptocurrency arbitrage” especially the LUNA TERRA arbitrage, many times in our internet browsing we find articles or videos on Youtube that talk about this, but the truth is that I do not think it is a good idea to invest in this, if it is true, we can earn income in the short term, but we must take into account that this will take much of our time, today I will talk about the associated risks and some strategies that we can use in this type of business.
What is cryptocurrency arbitrage?
Cryptocurrency arbitrage is a form of speculation or trading with low profit percentage that we can do many times a day, that is, we can exchange our cryptocurrencies in different exchanges to obtain a short term profitability, it is not much, but what has caught my attention of this type of investment is that we can do this several times a day.
In order for you to understand this better I am going to explain more in depth how this type of cryptocurrency investment works. Let’s suppose that we have 100$ in Monero (XMR) in Binance, in this exchange the price of Monero (XMR) is 21$, so far so good, but in another exchange the price of Monero (XMR) is 22.50 US dollars, that is the price of buying and selling in the exchange varies a lot, then traders usually benefit from this.
Here we can see that the commissions of the exchanges usually vary in our favor if we make this type of investment. In some exchanges the commission for trading cryptocurrencies is very low, as low as 0.10% in some cases, but the purchase or sale price is usually much higher, which we can obtain a considerable profit.
What are the risks of cryptocurrency arbitrage?
In this world of cryptocurrency arbitrage the most common risk is fraud, I would like to mention that in cryptocurrency arbitrage there are bots that we can install to obtain benefits in our favor, but this is where it becomes more complex, because this type of investment has received many complaints, I would also like to mention that we have to be very careful to whom we give our money when investing.
Here is a list of some of the most common scams in the world of cryptocurrency arbitrage.
Bots that are usually lies or simply do not exist.
Platforms that offer high returns in this type of investment and are usually ponzi schemes.
Web pages that do not give you back the money unless you deposit more, but when you deposit more they ask you for more money, and so on.
Is cryptocurrency arbitrage completely legal?
Cryptocurrency arbitrage is 100% legal, there is no authority that prohibits this type of investment, we can make this type of investment with peace of mind.
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