Cryptocurrency Arbitrage Remains Profitable Amid Market Slowdown

· 03 Apr 2018 in Cryptocurrency News, Home
Carlos is an international relations' analyst specializing in cryptocurrencies and blockchain technology. Since 2017, Carlos has written extensively for UseTheBitcoin and other leading cryptocurrency sites; with over 2,000 articles published.

The cryptocurrency market is very volatile and a great option for traders that are trying to make profits with it. Of course, day trading was not the only way to make profits by participating in the market. Some countries and cryptocurrency exchanges had better prices than others, and some individuals and enterprises where making some profits with it. Despite the market slowdown, cryptocurrency arbitrage is still profitable.

Bitcoin Arbitrage a Profitable Business

If you were living in Europe or in the United States, you knew that in South Korea or China, you could sell the same Bitcoin or Litecoin that you bought, but at a premium price. During the cryptocurrency boom at the end of December, cryptocurrency arbitrage was at its most profitable point. 

At the moment, the markets are experiencing a decreased demand from the general public, but it does not mean that arbitraging bitcoin is not profitable anymore. According to Reutres, in December 2017, Bitcoin could be sold in China 30% to 40% more than in other markets.

John DeCleene, assistant fund manager at overseas Chinese Investment Management, commented:

“The market’s kind of taken a downturn; there is less general appetite in this space. It is too many players entering this market, but also less of the hype we saw in December-January, when people were paying a 30 percent premium because they expected ten times gains overnight.”

The market saw an increased amount of individuals that tried to invest in cryptocurrencies at the same time that important mainstream media outlets were promoting it as the ‘best investment of all times.’

Peter Kim, trader at KIT Trading, a hedge fund that manages $10 million digital currency arbitrage operation, explained that situations with 30% arbitrage would not last long. Furthermore, only companies with big volumes and experience with arbitrage trades would be able to be profitable with lower gains.

“In the beginning, when there is 30 percent arbitrage, obviously you can travel to Thailand, buy Bitcoins, send them to China, Japan, Korea and sell them,” explains Mr Kim. “But that opportunity is not going to last very long. And even though it is not as blatantly there, there are still many ways to profit from it, especially for someone like me who is used to making three basis points on a trade.”

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