What is crypto arbitrage Software and how does it work?

What is Crypto Arbitrage?

Crypto currencies gained popularity in the start of 2010s. Soon there was a barrage of crypto assets and exchanges, all offering the best utilities and services. Decentralised exchanges mushroomed all over the world, giving global access without time-bound limits.

A single crypto asset is listed on many exchanges and there is often price-difference in the market value of that asset over multiple exchanges. Traders take the benefit of these price variations by buying from one exchange and selling at another exchange simultaneously. This is called Crypto Arbitrage.

To sum it, Crypto Arbitrage is a trading strategy where you employ High frequency trading to buy and sell a crypto from multiple exchanges and gain profit through the price differences. You buy where the price is low and sell where the price is high. Crypto Arbitrage is a simple and low risk strategy. Moreover, you only need a crypto arbitrage software and trading knowledge to set your own arbitrage trading.

Arbitrage trading is best for crypto assets as crypto assets are highly volatile and the exchanges offer 24*7 access as explained above. Therefore, there is more possibility to find price variations in crypto markets than in traditional markets.

Why there is price difference in exchanges?

Lack of global boundaries and 24*7 availability of exchanges is one reason the prices vary. There are more reasons for difference in price of a crypto on various exchanges.

Centralised Exchanges – Pricing of assets on centralized exchanges depend on the order books latest selling price. The most sale price of the latest transaction through which an asset is sold is considered the market price of that asset. However, the demand can be slightly lower in another exchange which means the selling price would be lower too or vice versa. This results in price discrepancy over those two exchanges and traders leverage this through crypto arbitrage strategy.

Decentralised Exchanges – Decentralised exchanges don’t use order books instead they use the Automated Market Maker system to provide Liquidity pools. If an investor wants to buy a crypto from a DEX they have to do it through liquidity pools. Liquidity pools consist of two digital assets only. To buy one you have to put another in the pool and this decides the price of those assets. There are separate pools for every crypto trading pair.

Liquidity providers fund their own crypto in a pool to create liquidity. In return they get a proportionate share of the transaction fee. The prices are maintained automatically by mathematical algorithms. The balance is restored whenever a crypto asset from the trading pair is bought. However, prices are affected if there are sudden high-volume orders.

What is Crypto Arbitrage Software?

Crypto arbitrage software is a computer program that helps a trader conduct arbitrage trading. It helps take advantage of price variations through different data feeds and real-time price tracking. Manual check on multiple exchanges for multiple crypto assets price variation is not possible therefore you need an automated software for crypto arbitrage.

There are many crypto arbitrage software present in the market. However, look at these features before you choose one –

Safety – Safety should be paramount while considering a crypto arbitrage software. These programs have your keys to conduct high frequency trades and if hacked you can lose your funds within seconds. Withdrawal function option, offered by PTX software, helps make the software even more secure.Integration – If you have not enough exchanges linked then how would you take advantage? In crypto arbitrage the more is the better. There should be big, high traffic exchanges as well as smaller exchanges integrated with the software.Price/Fees – Various companies charge in different methods. You have to pay at the time of downloading or there is monthly, yearly subscription fee. Then there is volume traded fee also or integrations options availability option for premium. Consider all this before you buy a crypto arbitrage software.Speed – Arbitrage software must be fast to take advantage of the price differences. It should be faster than bots to earn profits.

PlatinX Technology offers the best crypto arbitrage software as it has all the above mentioned and more functionalities that a trader needs. PlatinX Technology is a market making firm that has made its mark on the crypto ecosystem with customized crypto and trading solutions. Their Arbitrage software is user friendly and swift with integrations from the world’s top exchanges both centralized and decentralized ones. For more details, visit www.platinx.io

 

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