Hey guys, I’m wondering if I’m missing something and what are the risks here.
I was on a centralized exchange looking at a token (small volume) lets call it “RNDM” for this example, and saw something similar to:- 10 RNDM / USDT = $1.9
\- 10 RNDM / BTC = $2.5
And when I increase it from 100 RNDM to 10000 RNDM the difference seems to be the same.
I have not bought or sold any yet.
Both of these are on the same exchange.
So I’m wondering if I can just manually do the arbitrage, buy from one pair, sell from another pair, then convert BTC to USDT and repeat.
Seems too easy so I wouldn’t be surprised if I’m missing something obvious here.
Can anyone shine any light on it? And if I could do it, what are the biggest risks?
If the volume is small enough, you’ll single-handedly move the market if you go too big. Slippage, transaction fees, and the time in between trades are the three risks.
But yes, arbitrage opportunities do exist in crypto.
I think bots are probably the only things fast/efficient enough to make arbitrage trading profitable
Fees will nullify any gains. Also if it’s low market cap then there is slippage involved.
I personally wouldn’t get into arbitrage unless you’re moving massive amounts. And even then you have a huge risk in this market, go for it though if you are ballsy.
Check that when you preview the buy the exchange isnt offering a poor spread. Coinbase and others never allow trading at market value but always slightly higher or lower in their favour to make a profit from your trade while claiming they charge no trading fees.
Withdrawal/network fees will eat-up ur gains.. unless u r trading big amounts
If its too good to be true, it is not true.
Simple rule I believe in.
People profit from arbitrage. Bots usually do it faster than people can find opportunities