Arbitrage Transactions with Crypto Tokens: Effective Strategies for Maximizing Profits

We often receive questions from clients: “How to conduct an arbitrage transaction correctly, depositing a token on an exchange where it can be sold at a higher price?”

Let's figure it out together.

There are two options that can be used:

First Option

1. Withdrawal option: perform the first transaction on one exchange, then, if you find an arbitrage opportunity, withdraw tokens and USDT and perform the transaction again.

This option is suitable if:

• The withdrawal fee is small, and the potential profit compensates for it.
• You notice a good spread at the moment and can try transferring tokens. However, there is a risk similar to that when using a scanner. You might spend funds on fees without making a profit.
• If you've used a scanner and see that the spread is most common from exchange 1 to exchange 2, and most transactions look similar, it makes sense to hold coins to conduct transactions more frequently.

Second Option

2. Withdrawal-free option: This option is simple—perform a transaction from exchange 1 to exchange 2 and just wait for an opportunity to make a profitable or neutral transaction back, from exchange 2 to exchange 1.

• With this method, risks are minimal, but it may require an extended wait to make a profitable or neutral reverse transaction. Therefore, it makes sense to combine both approaches and analyze circumstances to make decisions.

Conclusion

In the end, we have two arbitrage strategies. The first involves withdrawing tokens and USDT after each successful transaction, which is good if withdrawal fees are small and potential profits outweigh them. However, be vigilant, as it's easy to burn money on fees, especially with a small spread.

The second option involves not withdrawing anything. Just transfer from exchange 1 to exchange 2 and wait until there's an opportunity to return everything to a profit or at least break-even. It has minimal risks but requires patience, like with a Christopher Nolan movie. It's probably better to combine both approaches depending on circumstances to avoid losses. In both cases, don't forget to monitor fees, spreads, and all the news in the crypto market.