#ArbitrageTradingStrategy
What Is Crypto Arbitrage?
Crypto arbitrage is the process of buying a cryptocurrency on one exchange at a lower price and simultaneously selling it on another exchange at a higher price, profiting from the price difference.
⚙️ Types of Crypto Arbitrage Strategies
1. Spatial Arbitrage (Cross-Exchange) ✅
Most common type.
You spot a price difference between two exchanges.
Buy on Exchange A, transfer, sell on Exchange B.
📉 Risk: Network fees, transfer time delay (prices may change).
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2. Triangular Arbitrage 🔁
Within a single exchange, take advantage of price imbalances between three pairs.
> Example:
Convert BTC → ETH → USDT → BTC to end with more BTC.
📉 Risk: Slippage, fees, latency.
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3. Decentralized Arbitrage (CEX vs DEX) 🌉
Buy on centralized exchange (CEX) and sell on decentralized exchange (DEX) or vice versa.
📉 Risk: Gas fees, DEX liquidity slippage.
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4. Statistical Arbitrage 📊
Uses quantitative models & bots to identify mean reversion or correlation-based opportunities.
More advanced, requires programming + machine learning.
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5. Funding Rate Arbitrage (Futures) 📈
In perpetual futures, funding rates create arbitrage:
If funding rate is positive, shorting perpetuals while holding spot can earn profit.
