By: Neilson– How to do arbitrage
When Marcus first heard about crypto arbitrage, he thought it sounded a little… shady. “It felt like a loophole,” he says now, laughing. “Buy low on one exchange, sell high on another? Too good to be true, right?”
But curiosity got the best of him. With some savings in stablecoins and more than a few Reddit tabs open, Marcus decided to find out exactly how to do arbitrage — and whether it was a legit money-maker or just another crypto pipe dream.
A Crash Course in Arbitrage, Courtesy of YouTube and Trial-and-Error
In the simplest terms, crypto arbitrage is buying a coin for a lower price on one exchange and selling it for a higher price on another. The catch? You need to move fast. Prices shift. Fees sneak up. Network congestion can ruin everything.
“I figured I’d start small,” Marcus says. “Ethereum was showing a $15 difference between two platforms, so I thought: why not?”
Sounds easy, right? Not exactly.
How to Do Arbitrage Without Losing Your Shirt (Marcus Edition)
Marcus quickly learned that there’s more than one way to play the arbitrage game. Here’s how he broke it down after several weeks of testing — and a couple of near-misses.
1. Spot Arbitrage — The Gateway Drug
The first method Marcus tried was straightforward: buy ETH on Exchange A where it’s cheaper, send it to Exchange B, and sell it for a small profit.
“I made like $12 the first time,” he laughs. “But the transfer fees were almost half that. Still, it worked!”
He realized timing and fees were everything. Delays in blockchain confirmations? Game over. Profits gone.
Lesson learned: Pre-load funds on both exchanges to act fast. And triple-check those gas fees.
2. Triangular Arbitrage — A Math Puzzle
Next came the more advanced play: triangular arbitrage. It happens all on one exchange, where a trader loops through three coins—like BTC to ETH to USDT and back to BTC—to take advantage of mismatched pricing.
“It’s like solving a Rubik’s Cube while the colors are changing,” Marcus says. But it paid off. No transfer delays. No cross-exchange risks. Just math.
Still, he warns it’s not for the faint-hearted. One wrong move in the chain and you’re stuck with losses.
3. Automated Arbitrage — Bots vs. Humans
Marcus eventually dabbled in automation. “There’s a whole universe of bots out there,” he says. He rented one for a month and set it up to scan for micro-differences between exchanges.
The bot made trades around the clock — but not all were winners. Between monthly software costs and trading fees, the margin got razor-thin.
“I liked the idea of passive income, but it wasn’t really passive. You’ve gotta babysit these things.”
Where It All Goes Sideways
Marcus doesn’t sugarcoat it. Arbitrage sounds clean in theory, but in reality?
- Delays: One time he bought BTC cheap but couldn’t transfer fast enough before the price dropped.
- Fees: “You don’t realize how quickly they add up until you’re down $20 on a $10 profit.”
- KYC limits: Some exchanges capped his withdrawals, locking up funds.
- Slippage: A frequent, sneaky culprit. “You think you’re getting a deal, then the price shifts mid-order.”
Still, he doesn’t regret it. “It forced me to really understand how exchanges work, and that’s valuable.”
So… Was It Worth It?
If you ask Marcus, it was — but not for the reasons you might think.
“I didn’t make a fortune,” he says. “But I didn’t lose one either. Arbitrage taught me discipline. It’s a game of patience and detail, not adrenaline.”
He believes how to do arbitrage today isn’t about hacking the system. It’s about understanding it better than most. And in a space filled with hype and scams, that counts for something.
Final Thoughts: Why Learning How to Do Arbitrage Still Matters
Marcus’ story isn’t unique — but it’s real. And for anyone considering crypto arbitrage, it’s a grounded reminder that while it’s not a magic money machine, it can work with the right approach.
So if you’re wondering how to do arbitrage in crypto, start like Marcus did: small, careful, and curious. The profits might not be huge — but the lessons? Those are worth their weight in Bitcoin.
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