Crypto arbitrage is a new type of trading platform that allows users to invest in cryptocurrencies and simultaneously trade them on different exchanges for a profit. This type of trading platform is growing in popularity because it allows investors to make quick profits by taking advantage of price differences between exchanges.
What Is Crypto Arbitrage Trading?
According to Coin Decimal‘s definition of Crypto arbitrage which says that “Crypto arbitrage is a trading strategy where investors and traders buy a crypto asset from one exchange and then sell the same amount of that crypto asset on another exchange for a more profitable fee.”
This business idea can be a lucrative way to make money, as long as you can accurately predict the various cryptocurrencies’ price movements.
For example, if you notice that Bitcoin is 0.01 BTC higher at one exchange when compared to another, you can sell your coins at the first exchange and repurchase them at the lower-priced second exchange to make a profit.
How to Trade Crypto Arbitrage Using a Crypto Arbitrage Scanner
To trade crypto arbitrage, you must first find a good arbitrage scanner. There are many different scanners out there, but not all of them are created equal. Here is a list of the best crypto arbitrage scanners to consider if you want to be successful with your crypto arbitrage journey. Some of the things you should look for in a good scanner include:
- The ability to scan multiple exchanges at once
- Real-time data
- Accurate data
- An easy-to-use interface
Once you have found a good scanner, you can start looking for arbitrage opportunities. When you see an opportunity, you will need to act quickly to take advantage of it, and this is because prices can change very rapidly in the world of cryptocurrencies.
Starting with small trades is important if you are new to arbitrage trading, and this will help you to get a feel for how the system works without putting your entire portfolio at risk.
7 Best Crypto Arbitrage Trading Platforms for Day Trading
Our list of the best crypto arbitrage platforms for day trading is based on our analysis of various features, fees, and support available. These platforms are ideal if you’re looking to day trade cryptocurrencies quickly and easily.
Binance
Binance is a leading crypto arbitrage platform for day trading are some of the most popular and widely used options available today. Many people use these platforms to take advantage of the many benefits that they offer, including the ability to trade with a variety of different currencies, the ability to trade on margin, and the ability to use leverage.
Pros
- Straightforward signup process
- Support for credit and debit cards
- Free deposits
- Extremely quick transactions
- Lucrative on-site staking options
Cons
- Considerable withdrawal fees
- The exchange has been hacked in the past
- The main site is not available in the USA
- Less regulated than some competitors
BitMEX
BitMEX is a crypto arbitrage trading platform that allows users to trade between Bitcoin, Ethereum, and other popular cryptocurrencies. This makes BitMEX an ideal platform for day trading as users can quickly move between different currencies to exploit price discrepancies. Additionally, BitMEX offers traders access to various indicators and tools that help them make better decisions.
Pros
- High-trade value and liquidity level;
- simplified registration procedure;
- margin trading with leverage up to 1:100;
- you can use short positions;
- world-class security system by Amazon Web Services;
- high speed transfer speed for fund replenishment and withdrawal;
- powerful analytical and reference system integrated into your account.
Cons
- funds deposits and withdrawals are only in Bitcoins;
- the trading terms (e.g., the “liquidation trigger” is the index marking price) may be unfamiliar to some users;
- the risk of severe losses due to the high leverage abuse.
Kraken
Kraken is a leading crypto arbitrage platform that instantly allows users to exchange between multiple cryptocurrencies. With over 1 million registered accounts, Kraken is among the most popular exchanges, and users can also use Kraken to trade fiat currencies and commodities.
Pros
- Large selection of digital assets.
- Low fees for advanced traders.
Cons
- Limited options for funding accounts.
- Not available in all U.S. states.
Coinbase Pro
Coinbase Pro is a well-known crypto arbitrage trading platform that lets users trade multiple cryptocurrencies simultaneously. The platform offers low fees and a variety of features, making it an ideal choice for day traders. Coinbase Pro also supports margin trading, allowing users to leverage their investments up to three times.
Pros
- Fully regulated with excellent security measures
- Wide range of supported cryptocurrencies
- Intuitive Android & IOS mobile app
- Low to zero fees for large-scale transitions
Cons
- It can be overwhelming for complete beginners
- Not directly supporting most local payment methods
- Sub-optimal customer service
Kucoin
Kucoin is a cryptocurrency trading platform that allows users to arbitrage between different coins. This allows users to make profits by trading one coin for another, as the prices of these two cryptocurrencies vary. Kucoin also has an extensive list of available tokens, making it a great option for day traders and investors.
Pros
- Anonymous trading
- Secure
- Supports a variety of cryptocurrencies
Cons
- Low trading volume
Gemini
Gemini allows users to buy and sell cryptocurrencies quickly and easily, making it perfect for day trading. The platform also has low fees and a user-friendly interface, making it easy for even novice traders to get started as the market continues to grow more complex.
Pros
- More than 50 cryptocurrencies.
- Site insurance of digital assets against exchange hacks.
- Available in all U.S. states.
Cons
- Higher fees than some other crypto exchanges.
OKEx
OKEx is one of the most popular crypto arbitrage platforms. It allows users to trade various digital assets with each other. This makes it an ideal platform for day trading. In addition, OKEx offers excellent liquidity and has a wide range of coins available for trading.
Pros
- Allows a wide array of fiat currencies to open an account
- Educational materials
- wide range of services
- Numerous trading pairs, High Staking APY
- Simple to use buy/sell dashboard
- rapid online chat response from technical support
Cons
- Residents of several nations, including the United States.
- Very complex, multi-tiered fee structure
Conclusion
The crypto arbitrage trading platform allows traders to take advantage of price differences between different cryptocurrencies. The platform is easy to use and provides detailed information on the current prices of each cryptocurrency.