Arbitrage is an integral part of the cryptocurrency ecosystem. While not everyone may benefit from these price spreads, the process is set to become a whole lot easier owing to a new tool that has been released by Arbitraj which lets anyone benefit from cryptocurrency arbitrage opportunities at all times.
Can Arbitraj Succeed?
There are many reasons as to why cryptocurrency arbitrage can make people a lot of money in the years to come. Arbitrage has been an integral part of all financial markets for quite some time now, and it is no different in the cryptocurrency industry. Even so, there are only limited opportunities to take advantage of since the gaps usually close themselves fairly quickly. Moreover, not all trading platforms welcome users from all over the world either.
With Arbitraj, that is expected to become a lot easier. The tool itself is built to let users compare price spreads of the various cryptocurrency exchanges available today. Once the platform and tool come together in its official capacity, taking advantage of the differences across trading platforms will become a lot easier. This will undoubtedly bring even more volatility to the cryptocurrency sector, yet it may also introduce a lot more liquidity in general.
The Crux of the Matter
With price spreads of 5-6% occurring on quite a regular basis, it is only normal for more people to want to be exposed to such opportunities. It is not easy to take advantage of such spreads when dealing with multiple exchanges, especially those outside one’s country of residence. How Arbitraj plans to tackle that aspect exactly, remains a bit unclear, as the project is still under development at this time.
Although a web app and Google Chrome plugin exist, there is still a lot of work to be done. Around 500 beta users have been given access to this tool, which is not exactly a high number. Additionally, the company is still working on having more exchanges added in the future, as new trading platforms continue to pop up on a regular basis. Moreover, the tool may not become public anytime soon either, as it will be mainly used as a “private” service for the coming few months.
Given all of the crazy price momentum affecting the global cryptocurrency market this year, it is only to be expected there will be even bigger price spreads moving forward. When that happens, a lot of traders will seek to tighten these gaps as quickly as possible. In the long run, more arbitrage tools can help reduce overall volatility as well, albeit it seems the opposite effect will be more apparent during the initial stages. Arbitraj may set a very peculiar precedent in the cryptocurrency industry, assuming they can deliver on their initial promise.
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