Cryptocurrency Arbitrage Strategies. Risk-Free Strategy

We've been asked many times, both in webinars and our closed client chat, about which arbitrage strategy is best for me.

Today, we will discuss a risk-free approach. It's suitable for those with a starting capital of $500 or more.

Here's a small guide that we provide to all our clients:

Choose coins that you would buy for the long term, and this is crucial. Don't pick obscure coins that always have a huge spread. With this strategy, you need to thoroughly research the project.

To arbitrage such coins, you don't need withdrawals. The classic method comes into play.

You buy the coin on one exchange and sell it on another.

To sell the asset instantly, you must have a balance on both exchanges.

Let's break it down with an example of the Hedra coin:

1. Suppose you bought 1,000 coins at a rate of $1 per coin.
2. You studied exchanges and found a pair on CoinBase and Kucoin.
3. You deposited 100 Hedra on CoinBase and around 1,000 USDT on Kucoin.
4. You put the coin in our scanner and simply monitor the spreads.
5. The bot sends you the pair, stating that on CoinBase, Hedra is trading for 1.01 USDT, and on Kucoin, it's 1.00 USDT.
6. Pay close attention to the fees; let's assume they are 0 here.
7. Be sure to check the order volumes in the order book.
8. Someone is willing to buy on CoinBase at 1.01 for $2,000.
9. On Kucoin, they are selling at 1.00 for $8,000, and the price is stable for a long time.
10. The rule is to close the order that is smaller first.
11. You sell 1,000 Hedra on CoinBase for $1,010 and buy 1,000 Hedra on Kucoin for $1,000. Profit: +$10 without using withdrawals.

It's also important to mention that you should not execute a trade for more than 25% of the orders in the order book.

This is how risk-free arbitrage works. You don't need to make a withdrawal, and the trade is completed in 3-5 seconds, so the price doesn't drop. It's important to understand that you are buying for the long term, even if withdrawals are closed, and you've confirmed that the token is not a scam. There might be a situation where it starts to drop, as was the case with LUNA, but even with closed withdrawals, you can arbitrage and profit from a token's decline. Therefore, always consider investment risks and invest in verified projects.

12. Either wait for a reverse arbitrage opportunity to appear or transfer tokens and USDT between exchanges if you see that the spread remains in the same direction.

That's the entire risk-free arbitrage strategy. Read about other strategies on our blog.

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