Cryptocurrency arbitrage is a trading strategy used by crypto traders to make profits in the market. It involves buying a particular crypto asset on one exchange and then selling it quickly on another crypto exchange for a higher price.
The simultaneous action of buying and selling the same asset on two different platforms is known as arbitrage, a widely used strategy in the financial market. While crypto arbitrage restricts the strategy to the world of digital assets, arbitrage is also used by traders for other financial assets, such as commodities.
Crypto arbitrage trading is a good strategy if you can perform high-frequency trading but with low risk. However, the crypto arbitrage trading strategy returns are also on the lower side.
Several leading cryptocurrency exchanges also offer P2P marketplaces, which can provide attractive opportunities for arbitrage trading. Arbitrage traders can buy crypto assets on P2P platforms from one buyer and then sell to another user at a higher rate to make small trade profits.