I decided to figure out cryptocurrency arbitrage because I constantly hear about it in the community, and I’ve only been studying it theoretically so far. The essence is simple: buy crypto cheaper on one platform and sell it more expensive on another, earning on the difference. It sounds logical, but it’s not as straightforward as it seems at first glance.

Why do these price differences even occur? It turns out that prices for the same coin can vary significantly depending on the exchange. There are several reasons: the number of active buyers and sellers isn’t the same everywhere, prices update with delays, plus different countries have varying demand and legislation affects the cost.

Now about the types. Inter-exchange cryptocurrency arbitrage is when you simply buy a coin on one platform and transfer it to another for sale. For example, buy Ethereum on a major exchange, send it to another platform, and sell it for a higher price. The second type is intra-exchange, where you work with different trading pairs on the same platform. Like, if ETH/USDT is cheaper than ETH/BTC, you convert and profit from the spread.

There’s also triangular arbitrage, where you exchange currencies in a chain through several pairs in a row. Say, convert USDT to Bitcoin, then to Ethereum, and back to USDT, earning on each step. And regional arbitrage — when you buy crypto on an international platform and sell through local channels in your currency with a markup.

How to get started? First, you need accounts on several exchanges — I’ve already done that. Second, it’s easiest to fund your account with stablecoins like USDT or USDC. Next, you need to constantly monitor prices through special websites or bots. It’s critically important to calculate all fees — for deposits, withdrawals, exchanges — otherwise you risk ending up in the red instead of making a profit.

Transaction speed also matters. While you transfer crypto from one exchange to another, the price can change, and the scheme may no longer be profitable. I read that for quick transfers, it’s better to use TRC-20 or BSC networks.

I did a simple example calculation: if Bitcoin costs $96,000 on one platform and $96,100 on another, theoretically, you can buy cheaper, transfer, and sell higher, earning $100 minus all fees. But here’s the catch.

The downsides I see: fees can be so high that they eat up all the profit. Transfer delays — the price can drop while the crypto is in transit. Many exchanges limit withdrawal amounts. And there’s always a risk of suspicion of fraud or regional restrictions.

So, cryptocurrency arbitrage is a working method, but you need to be very careful with calculations. Am I missing something? I’d like to hear from those who have already tried it in practice. Maybe there are some life hacks I don’t know?