Arbitrage Trading: How To Start a Profitable Crypto Arbitrage Business In Nigeria

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What Is Arbitrage Trading?

What Is Crypto Arbitrage Trading? 

Stablecoins:

Profitable Crypto Arbitrage Trading Strategies

Arbitrage trading is the buying of an asset and selling it at a higher price in a different market. Crypto arbitrage helps you buy crypto, such as bitcoin, tether, and ethereum, at better prices for a profit.

Arbitrage trading is one of the many opportunities cryptocurrency provides for Nigerians. Yet, it has risks associated with it.

This article covers all about crypto arbitrage trading and how to do crypto arbitrage trading successfully and profitably in Nigeria.

What Is Arbitrage Trading?

Arbitrage is a popular and likely one of the oldest trading strategies. Those who engage in arbitrage trading are called arbitrageurs.

The most basic form of arbitrage is buying a product in a market where the price is lower and selling it where it is higher.

For example, you can buy a shoe from China, where the price is very low, and resell it in your city, where it is higher.

Arbitrage trading is also the buying of farm produce like yams from farmers at a low price to resell in bigger food markets.

What Is Crypto Arbitrage Trading? 

Crypto arbitrage trading is a type of arbitrage trading that involves capitalising on minor price differences between cryptocurrency exchanges for profit.

During crypto arbitrage trading, crypto traders buy a particular asset on one exchange and sell it at a high price on another exchange. 

Let’s say the price of ethereum on Yellow Card is $3200 and $3300 on Kraken. A crypto arbitrage trader will buy at Yellow Card and sell at Kraken for a $100 profit.

Crypto Arbitrage isn’t new in the global space. It was the secret to the early success of crypto Billionaire Sam Bankman-Fried. With arbitrage trading, he built one of the world's largest crypto exchanges, FTX.

What You Need for Crypto Arbitrage Trading in Nigeria?

Crypto arbitrage trading depends on many factors for one to carry it out. These factors include;

Peer-2-Peer Exchanges (P2P)

The CBN’s ban on crypto activities for banks In Nigeria is one of the factors driving P2P exchange in Nigeria. It would be best if you use a P2P exchange that has favourable rates where you could buy low and sell high.

Yellow Card is a good platform where you can sell crypto at favourable rates through P2P. This makes Yellow Card the most suitable crypto exchange where you can buy crypto of any amount at cheap rates.

Yellow Card:

Yellow Card is a secure crypto exchange to meet the needs of crypto traders and users within Africa. Yellow Card offers cryptocurrencies like tether, ethereum, and bitcoin at favourable rates. You can now buy crypto and sell it at higher prices for a profit.

Stablecoins:

You will need stablecoins such as USDT and BUSD for crypto arbitrage trading. This is because stablecoins help you not lose money to quick price changes. For instance, you can make $200 on ethereum and lose it without swapping to a stablecoin.

Profitable Crypto Arbitrage Trading Strategies

Here are strategies to know and use for lasting success in crypto arbitrage trading:

1. Normal Arbitrage Trading:

This is one of the most common crypto arbitrage trading strategies that traders use daily. This involves buying a cryptocurrency at a low price and selling it to another exchange at a high price.

2. Decentralised Arbitrage Trading:

This crypto arbitrage strategy is used among market makers (AMMs) and decentralised exchanges. It uses smart contracts and data to discover the price changes of crypto trading pairs.

Triangular Arbitrage Trading:

This arbitrage trading strategy involves trading three cryptocurrencies on the same exchange. For instance, when swapping, you can exchange bitcoin, USDT, and ethereum due to slight price benefits.

Statistical Arbitrage Trading:

This crypto trading strategy uses computer data and economic techniques to carry out arbitrage trades. This may include robots and mathematical models.

How To Start A Successful Crypto Arbitrage Trading Business

To carry out an arbitrage trade successfully, you need to have the following in mind:

1. Look Out For Opportunities:

For you to be successful in the crypto arbitrage business, you need to learn how to be calculative and look for opportunities. You must learn how to buy and sell bitcoin in Nigeria at the best price as this is the number one skill that an arbitrage trader needs to have to succeed. In the crypto arbitrage business, the person that discovers an opportunity immediately will likely take more profit than others that see it late. 

2. Scrutinise The Opportunity:

 

It is one thing to find crypto arbitrage opportunities and another to vet if the option is worth it or not. Arbitrage trading strategies without checks will only lead to more losses than profits. You need to look at the transaction fees, network fees, and wallet costs. You can decide to continue to trade or look for another opportunity.

 

3. Be Time Sensitive:

 

A good crypto arbitrage trader always knows that time is key in trading. Cryptocurrencies are volatile, and the price changes fast, especially on exchanges. So, how you spend your time will determine whether you make money from trading or lose money.

The best place to buy and sell crypto at the best market rate (Using Yellow Card)

Your Arbitrage Trading Journey Begins

Crypto arbitrage trading must be done with care and proper risk management. While crypto arbitrage is not so popular in Nigeria, knowing the basic principles eases your crypto trading journey.

Yellow Card remains the best place to buy and sell crypto at the best market rate. and a platform that works to your advantage. You also need to choose a strategy that works well for you and will help you profit long-term in crypto arbitrage trading.

With these, you can make a lot of profit from crypto arbitrage trading.

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