That easy to do cryptocurrency arbitrage? What am I missing?

opscurus · Feb 21, 2022

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 - about 500k) 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?

Sassify · Feb 21, 2022

opscurus said:
opscurus said:

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 - about 500k) 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?

Click to expand...

you forget about exchange rate of buy & sell and this will eat your whole profit because in the end you will spend and loose it

by the Which exchange it is ?

opscurus · Feb 21, 2022

Sassify said:
you forget about exchange rate of buy & sell and this will eat your whole profit because in the end you will spend and loose it

by the Which exchange it is ?

Exchanges charge fees when I trade cryptocurrencies between each other? And the fees are high enough to make what I'm trying to do redundant?
I'm not going to be withdrawing since everything is happening on the same 1 exchange

Sassify · Feb 21, 2022

opscurus said:
Exchanges charge fees when I trade cryptocurrencies between each other? And the fees are high enough to make what I'm trying to do redundant?
I'm not going to be withdrawing since everything is happening on the same 1 exchange

Yes obviously to buy and sell any coin you should have to give the fee and yes fees are depends upon exchange to exchange

Withdrawal part is different because we are just talking about trade coins against one to another inorder to make profit

you should check the buy fee , sell fee of both coins and you will get to see the difference and you will have to answer of this question

opscurus · Feb 21, 2022

Actually

opscurus said:
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 - about 500k) 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?

CORRECTION: The exchange shows the volume to be much less, for this example lets say its $1,500 for one of the pairs, and just $150 for another. In this example lets say I'm planning to do $100 transactions (buy/sell orders), does that change anything? Could that move the market and invalidate the whole thing?

seomaster5 · Feb 21, 2022

Fees will eat up all the benefits. If something like this appears on some exchange, it will be patched in minutes.

opscurus · Feb 21, 2022

seomaster5 said:
Fees will eat up all the benefits. If something like this appears on some exchange, it will be patched in minutes.

What fees? I'm not withdrawing anything since its all on one exchange. Also maybe the tiny(?) volumes are the reason its not very scalable / unprofitable altogether?

Royal96 · Feb 21, 2022

I can't see your screen, but when something looks to good to be true, it usually is, especially when it comes to crypto.

RottenApple · Feb 21, 2022

opscurus said:
What fees? I'm not withdrawing anything since its all on one exchange. Also maybe the tiny(?) volumes are the reason its not very scalable / unprofitable altogether?

You pay fees to the exchange for buying and/or selling crypto within the same exchange.

In your example: If you want to buy 1 RNDM for 10 USDT. You will be charged 10.02 USDT for 1 RNDM or (depending on the exchange) will receive 0.98 RNDM for your 10 USDT. That difference you are paying extra or receiving less is the exchange fee.

If you want to withdraw, those are different fees.

EAY · Feb 21, 2022

There's a possibility. I think you should try it with small amounts and see for yourself.

lotsofmoney · Feb 23, 2022

kelaynak33 said:
There's a possibility. I think you should try it with small amounts and see for yourself.

No there will be no profit. All the profit will go in fees. O ly one party will earn from this exercise and that is the exchanges involved.

opscurus · Feb 23, 2022

lotsofmoney said:
No there will be no profit. All the profit will go in fees. O ly one party will earn from this exercise and that is the exchanges involved.

In this example I'm doing everything one the same exchange, so there won't be any withdrawal fees.
I am slightly concerned with volume though, as one of the trading pairs has a 24hr volume of only $200 (not thousand), but I think I can still make a small amount from it, like $40 or something.

Miriel · Sep 23, 2022

I think you doubt too much, there is more to be gained than lost, that's for sure

Followlix · Sep 23, 2022

Arbitrage trading changed my life, so I can guarantee it exists.

From your example the difference seems to be too huge to not have been eaten out by bots before you saw it, so it makes me believe the order book is empty and there is no liquidity to actually do that arbitrage, but I could be wrong as I don’t see your screen

Funny how people think a 0.075% fee will eat your profit when your example is a +31% gain.

That easy to do cryptocurrency arbitrage? What am I missing?

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