USDT and USDC Arbitrage: Spreads Between Exchanges and Networks

USDT and USDC Arbitrage: Spreads Between Exchanges and Networks

USDT and USDC arbitrage sounds boring: both stablecoins are pegged to the dollar, so where would a difference come from? In practice, the rate between them and against fiat keeps drifting by fractions of a percent across venues.

Below we look at where these gaps come from, how much fees eat up and how to calculate a trade before entering it.

Why USDT and USDC are not worth exactly $1

The peg is held by the issuer: it mints coins against reserves and redeems them at par. But redemption is mostly available to large clients, while the exchange price is set by supply and demand on a specific venue.

If everyone on one exchange rushes to buy USDT to ride a market rally, it gets more expensive there. On another exchange, people may be withdrawing USDC en masse at the same moment, and it gets cheaper.

From what we see, on a calm day deviations are measured in hundredths of a percent. On days of sharp market moves they stretch out.

Where spreads between stablecoins appear

The USDC/USDT pair on exchanges

The most direct option. On one exchange you can buy USDC for USDT slightly below par, and on another sell it slightly above.

Local fiat pairs

Pairs against the ruble, lira, real and other currencies live their own lives. The stablecoin rate there depends on local demand, banking restrictions and the P2P market, so the gaps can be wider.

Different withdrawal networks

The same USDT exists on several networks. If an exchange has closed deposits or withdrawals on one of them, the coin on that venue may drift away from the market rate until transfers reopen.

How much it costs to transfer USDT and USDC between exchanges

The network fee depends on the blockchain and how busy it is. On top of it, the exchange charges its own withdrawal fee, which is often fixed rather than a percentage.

• the trading fee on both the buy and the sell
• the exchange's fixed withdrawal fee
• slippage if your size exceeds the order book depth
• transfer time: while the coins are in transit, the gap may close
• moving capital back to the first exchange - one more withdrawal

A fixed withdrawal fee hurts most on small amounts. On large sizes its share falls, but slippage grows.

How to calculate USDT and USDC arbitrage: a hypothetical example

All the numbers below are hypothetical and only meant as an illustration. The capital is 10,000 USDT; on exchange A the USDC/USDT pair trades at 0.9975, and on exchange B at 1.0010.

The price difference was about 0.35%, but what is left in hand is roughly 13 USDT, or 0.13%. More than half of the spread went to costs.

In our view, this is a typical picture for stablecoins: the trade works on large sizes with low fees, while on small amounts fixed charges eat it up.

What risks stablecoin arbitrage carries

The first risk is a freeze. The issuers of USDT and USDC can block an address linked to a hack or fraud; we covered the mechanism in detail in a separate article on freezes.

The second is withdrawal delays. An exchange may put a transfer under manual review or suspend a network, and the spread closes before the coins arrive.

The third is a network mistake. Sending on a network the receiving exchange does not support can cost you the entire amount.

We believe it is wiser to keep capital on both exchanges and in both stablecoins in advance. Then the trade is closed with offsetting orders, and the transfers happen afterwards, without any rush.

How to find spreads between USDT and USDC

Comparing a dozen exchanges by hand is inconvenient: a gap of a fraction of a percent often lives only a few minutes. It is easier to watch all venues at once and immediately see the volume available at the best price.

Our tools

Spreads between USDT and USDC are measured in fractions of a percent and do not last long, so they are easier to catch when you see the rates on all exchanges at the same time. Our arbitrage screener keeps dozens of venues in one window, refreshes quotes every second and shows each gap together with the volume actually behind it. The spread calculator helps you check what survives fees, network costs and slippage at your size. The bot is fully manual. It never connects to your exchange API keys.

To test the tools on a live market, ArbitrageScanner offers one day of free access to the whole ecosystem.

FAQ (Frequently Asked Questions)

1. Why is USDT not worth exactly $1?

The exchange price is set by supply and demand on a specific venue. Redemption at par with the issuer is mostly available to large clients, so the rate on exchanges drifts slightly.

2. Can you profit from the difference between USDT and USDC rates?

A spread does appear, but it is small, and a large part of it is eaten by trading fees, withdrawal charges and slippage. Calculate the whole trade before entering.

3. Which network should I use to transfer USDT between exchanges?

One that both exchanges support and where deposits and withdrawals are currently open. Compare the final withdrawal fee on the specific exchange.

4. What should I do if a stablecoin withdrawal is stuck?

Check the network status on the exchange and the transaction hash, then contact support. To avoid depending on transfers, keep capital on both venues in advance.

5. Can an exchange freeze USDT during arbitrage?

An exchange may hold a deposit for review if the coins came from a suspicious address. The issuer can block the address itself, but for an honest trader this risk is small.

Conclusion

USDT and USDC arbitrage relies on small demand imbalances between exchanges, local fiat pairs and withdrawal networks. The gaps are usually measured in fractions of a percent and close quickly.

Profit here is decided by costs: trading fees, withdrawal charges, slippage and transfer time. Calculate the whole trade, keep capital on both venues and check network status before every transfer.

IMPORTANT! We are software developers. We do not give recommendations or promises of earnings and we do not advise you to invest your money anywhere. Our software is fully manual, all your money stays under your own control. We show examples of how our clients have earned on arbitrage in the past, but we do not advise repeating those actions one to one. Your earnings depend solely on your own actions and on market factors.