Crypto Arbitrage Legal or not?
The question of the legality of crypto arbitrage and its potential risks is of concern to many of our members. Let's break it down together today in this post.
Legality: Crypto arbitrage is a legal type of crypto trading. It is based on taking advantage of price differences between different cryptocurrency exchanges. It is a common practice used by traders to make profits.
Reasons for Price Differences:
1. One of the reasons for price differences on exchanges can be the activity of big players When a big player makes a big buy or sell, it can lead to a price change on that exchange. Recently such a case happened with crypto exchange
BitMEX when one guy decided to immediately sell his
400 BTC which caused the bitcoin price to drop to
$8,900 for 1 Bitcoin. We wrote about it in THIS POST.
Experts estimate that the total profit of happy crypto traders who engaged in crypto arbitrage amounted to more than
50 million dollars, but these figures could be much higher.
2. Another reason is the manipulation of crypto exchange owners, sometimes crypto exchange creators specifically raise or lower the price of a any coin to increase the trading volume and liquidity of a certain coin on the crypto exchange. This is also a common case, more often than not, traders are actively following crypto exchanges and looking for potential profits.
Conclusion: Crypto arbitrage is an important tool in the cryptocurrency market, now the market is in a bull cycle and this gives even more opportunities for crypto arbitrage traders. Stay tuned, we will further expand on the topic of crypto arbitrage and teach you how to find profitable trades!
