Cryptocurrency arbitrage is all the rage in the investment world right now, and for good reason.
It offers the ability to earn great returns by leveraging inefficiencies in the market, and this is making savvy investors healthy returns.
However, this does not mean there are no risks involved and it is important to understand – and consider – these risks before starting your cryptocurrency arbitrage journey.
These risks are highlighted below.
It is difficult for individuals to leverage the vast range of cryptocurrencies available for arbitrage.
This is primarily due to regulations that may be in place which limit the number of exchanges and currencies you can invest in as an individual.
It is therefore possible that you attempt a certain arbitrage action, but your plan is thwarted by regulatory action.
This red tape is not limited to regulations, however.
Many exchanges will charge hefty fees for the deposit, withdrawal, and trading of cryptocurrencies – and if these are high enough, they can result in you making weak profits or even a loss.
It is therefore important to have a full understanding of the fee structure of the exchange you are trading on.
Trading on time
Finally, the nature of cryptocurrency arbitrage is such that it requires fast trading.
Many opportunities will appear and disappear in a short period of time, meaning if you are slow off the mark, the opportunity may disappear before you can complete your trades.
Transactions that have long waiting times can, therefore, seriously harm your arbitrage efforts.
How OVEX can help
These risks shouldn’t stop you from taking advantage of cryptocurrency arbitrage, however.
Leading cryptocurrency trading platform OVEX simplifies the entire process by providing an intuitive interface and platform where they take all the risk and do all the heavy listing.
“Our mission from the start was to take as many risks out of the arbitrage process as possible, and we have done just that,” said OVEX founder Jon Ovadia.
OVEX makes arbitrage trading easy by using TUSD and leveraging its partnership with Trust Token – an American stablecoin platform with a market cap of over $350 million.
This allows customers to buy stablecoins at their international prices without ever having to exit the OVEX platform.
OVEX also boasts the largest cryptocurrency Prime Brokerage and OTC desk in Africa – making it easy for high-net-worth individuals to conduct arbitrage trading over a secure and private channel.
This sheer size enables OVEX to offer a flat 1% fee across all investments, which is a small percentage of your profit and therefore makes it easier to leverage arbitrage opportunities.