This is a multi-part series of my experience with triangular cryptocurrency arbitrage. It has been zero risk and extremely profitable so far.
Post any questions you might have in the comments and I will reply to all of them.
Standard cryptocurrency arbitrage is pretty much well known. You buy Bitcoin in one exchange and sell on another. You can profit when there is price difference (margin) between the two exchanges.
Two currencies are involved, the crypto currency and the fiat currency you used to buy the crypto currency and made back (with profit) when you sold it.
The problem with this traditional arbitrage is that it is easy to do. That means that everyone can do it, and when it comes to arbitraging the more people do it the smaller the profit margin and opportunity gets.
Time to make things more complicated. Enter Triangular Arbitrage. Arbitrage = 2 currencies, Triangular Arbitrage = 3 currencies.
Standard arbitrage works like this:
- Buy Bitcoin in Exchange A by spending USD
- Sell Bitcoin in Exchange B and make USD
- Transfer USD back to Exchange A
Triangular arbitrage works like this:
- Buy Bitcoin in Exchange A by spending USD
- Sell Bitcoin in Exchange B and make EUR (not USD)
- Convert EUR to USD and transfer USD back to exchange A
Three currencies involved: 2 fiat currencies, 1 cryptocurrency.
Believe it or not there is lots of money to be made using this strategy. But it is not that simple. You will need bank accounts in two countries, cryptocurrency exchanges in two countries and those countries should have favorable capital controls so you can convert and wire transfer your money.
Upvote for more details and detailed examples in the next posts.