Whats Crypto Arbitrage Trading Bot?

So you have made your way here because you are interested in crypto.  At some point you have probably heard about how risky crypto is.  But you also might have heard about the potential profits that you can gain, but you also don’t want to risk everything one day, just to have it not worth very much the next day.  If the person I am describing is you, then you might want to look at an Arbitrage Trading Bot.


The definition of Arbitrage is to buy and sell items in different markets so that there is a profit made.  So when looking at crypto currencies you also need to take into account where you are buying your coins.  Exchanges are very similar to a store.  You go to the store to buy milk, however each store has their own price of milk. For example, Store A has a gallon of milk for sale.  They might be selling their gallon for 3.50 usdt.  However, down the road a bit, Store B could be selling their milk for 3.00 usdt.

Each exchange is very similar to this, I could buy a coin on Exchange A, and it could cost more on Exchange B.  The little difference between those exchanges can add up.  So this is where an Arbitrage Bot can come into play.  People are willing to pay money for the coins at these different exchanges, so what a person can do is buy a coin on one exchange and sell it on another exchange for a profit.  How does this look with a real life example?  I will show you.

Say I want to try an Arbitrage Bot with ADA.  I will set my bot to look for the lowest price across several exchanges and the highest price across those same exchanges.  I might be able to buy ADA for 2.15 on one exchange and immediately sell it for 2.18 on another exchange.  This example is a very large example.  The difference isn’t usually that much and you usually have to either have a large amount or have a long time waiting for it to happen.

Can I Use A Bot?

The answer for this question is Yes!  Many of the exchanges work with an Arbitrage Trading Bot that will automatically scan the markets for you. Many of these transactions might happen too quickly, or there might be too many of them for a human to input the trades themselves.  You also might run into crazy fees for sending crypto to other exchanges and then back again.  However, at times these bots overlook these “withdrawal” fees, because you are still keeping the money there, but the bot is using it with other exchanges as well.

How To Find It?

Several different exchanges do have the ability to use an Arbitrage Bot.  Kraken and Pionex are the two exchanges that come to mind to begin with.  Both of these exchanges credit the user funds while having a pretty low risk on this type of investment.  There are also trading bots that have this built in.  3Commas and Cryptohopper both have this feature and those are two very popular bots as well.

So now you are probably thinking that this bot sounds like it would be great and you can’t see the downside to it.  As I have said before, crypto can be very unpredictable, so there is always a risk.  However, with this type of trading the risk can be very little.  There will not be huge payouts, but the idea is to keep your profits as profits.  Not to make a profit, and then give it away with a bad trade.  So this type of bot is perfect for individuals who want to have very little risk and a very good chance for a profit.