Crypto Arbitrage Strategies and Practical Tool Selection
Summary
The article introduces cross-exchange arbitrage, spot-and-futures funding or basis trades, and arbitrage between centralized and decentralized venues. It emphasizes checking whether a price spread remains profitable after fees and transfer costs, and whether execution latency will erase the opportunity. It also recommends restricting exchange API permissions to trading, reflecting a basic operational risk control.
The piece names several bot and scanner products and claims that one scanner tracks more than 75 centralized exchanges, but its product rankings and regional popularity claims are promotional and lack supporting comparative results. The discussion is incomplete: it gestures at a fourth strategy without explaining it and cuts off during its platform review. It gives no measured returns, backtests, slippage estimates, or detailed treatment of settlement, inventory, funding-rate changes, and execution failure. The strategies are useful as a basic taxonomy, not as evidence that arbitrage is dependable or reliably profitable.
Key ideas
- Cross-exchange arbitrage seeks to buy on a cheaper venue and sell on a more expensive one.
- Spot-and-futures basis strategies can seek funding payments while holding opposing exposures.
- Differences between centralized and decentralized venue prices may create short-lived opportunities.
- Fees, transfer costs, and execution latency can eliminate an apparent spread.
- The article’s tool recommendations are not supported by comparative performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.