Simply, “Arbitrage in crypto market” is difference in prices of a crypto currency on different exchanges. For example, lets compare this with good reselling, lets take for instance apple magic mouse 2. Now we see a seller on alibaba.com selling at a price of $50, while on amazon one is selling it at $53.5, what might a trader do is buy these mouse from alibaba.com and sell them on amazon, taking advantage of the price difference. Now, there is a transfer fee on transferring tokens from one exchange to another, lets view this as the delivery charges that the seller from alibaba.com will charge per transaction, say $5. Then this trading becomes more of a loss deal than what we what we were looking for. Well to over come, or reduce the effective profit, we can simply increase the number of articles that we are ordering from alibaba.com. If we buy only 1 mouse, we resell it on a loss of $1.5, while if we order 2 of these, then the effective price becomes $52.5 and we get a profit of $1. This is what we originally intended to have. To further decrease the effective price, we can simply increase the number of articles.
Even though the arbitrage concept is not a original to crypto market, the emergence of multiple exchanges, in a short (very, very short) period of time led to the high chaotic environment all over the crypto market and real price gaps amongst them.
The EOS-BTC case can easily be considered as follows:
Now we can easily look at the difference in prices on binance and Cryptopia to have a difference of 34.56%.
With price chart of EOS-BTC on binance as:
And price chart of EOS-BTC on cryptopia as:
We need to make out from the price charts the arbitrage opportunities, which might be as a result of multiple factors such as potential listing of a cryto on an exchange. This might become time consuming and laborious. Comes into picture platforms such as Cryptoz.ai, which have all the arbitrage opportunity listings for you. All ready and easy to use., where you can easily target the cryptocurrency and/or market to view all arbitrage opportunities.
So the arbitrage opportunities are proved to be used to get decent profits, though with high risks due volatility of cryptocurrency which you are trying to trade might even take the whole concept down for you, thus you must be aware of what you are doing, initially explore from Cryptoz.ai and then confirm from the exchanges you want to trade.