Crypto Arbitrage

Crypto arbitrage is a strategy exploiting price differences between exchanges or instruments — in theory risk-free, in practice requires fast tools.

Types of arbitrage:

1. Spot arbitrage (CEX-CEX) • BTC on Binance: $30,000, on Kraken: $30,050 • Buy on Binance → transfer → sell on Kraken • Problem: transfer time + fees + price equalizes before transfer

2. Triangular arbitrage • On one exchange: BTC→ETH→USDT→BTC • Exploit mini price disparities in the currency triangle • Requires bot — manually impossible

3. CEX-DEX arbitrage • Difference between DEX (Uniswap) and CEX price • MEV bots do this in seconds (frontrunning)

4. Funding rate arbitrage • Perp funding rate positive → long spot + short perp • See: basis trading

5. Cross-chain arbitrage • Same token, different price on different chains • Problem: bridge costs and time