Utilizing the right tools for arbitrage trading is crucial to becoming profitable in the cryptocurrency market. CScalp explores insights into popular crypto arbitrage screeners and evaluates their functionalities as well as operations.
What Is Arbitrage Trading?
Arbitrage trading involves profiting from price differences in exchange assets. For instance, if BTC is trading at $20,000 on one exchange and $20,300 on another, buying BTC on the first exchange and transferring it to the second allows for selling it with a 1.5% profit (excluding commissions). Traders can seek out pairs of assets that, through cyclical trading, yield a positive return. These pairs can arise both between exchanges and within a single exchange.
Arbitrage trading stands apart from other forms of trading. It lacks technical analysis, Stop-Loss orders, and risks in the traditional sense. Profit opportunities arise not from price movements but from momentary differences in asset prices. Beginners might perceive it as "easy money," but in reality, that's not the case. Arbitrage faces intense competition, especially in recent years. Exchange bots often outpace "live" arbitrageurs and substantial earnings require significant capital. Nonetheless, in one form or another, arbitrage is accessible to anyone interested in exploring this arena.
Arbitrage can be practiced on exchanges and P2P platforms. Cryptocurrency arbitrage is technically simpler, as blockchain transfers allow for swift fund transfers between exchanges with minimal fees. P2P arbitrage often offers better earning opportunities, but intermediary fees – payment systems, banks, etc. – can eat into transaction profits. Additionally, some payment methods may take a while to process transfers. Hence, an ill-considered P2P deal could easily result in a loss.
Importance of Crypto Arbitrage Screeners
Screeners are a valuable auxiliary tool in arbitrage trading. They enable the identification of pairs of assets with profit potential on supported exchanges. Opportunities arise both between exchanges and within a single exchange, and tracking these manually can be extremely challenging. Crypto arbitrage screeners address this issue. However, before utilizing screeners, it's essential to consider a few nuances.
The price difference in "pairs" is a result of market imbalance. Arbitrage trading works to balance the demand and supply, consequently affecting asset prices. This implies that pairs have a short lifespan, usually ranging from a few minutes to a few hours. Therefore, promptness is crucial in finding pairs. As a general rule, the smaller the spread, the more "reliable" the transaction, but it is also more likely to disappear quickly. Intra-exchange pairs typically vanish the fastest because exchanges are populated with bots.
Simultaneously, caution is advised. If we discover a pair with a 5% spread that has been lingering for a week, it doesn't necessarily mean it should be traded immediately. Wide spreads indicate market illiquidity. Placing an order in such a market may lead to a prolonged wait for execution, or it might not happen at all. This is precisely why wide spreads persist in such markets for an extended period.
Additionally, wide spreads could indicate high volatility, the risk of slippage, and substantial fees for asset deposits and withdrawals. Before engaging in such pairs, it's important to assess the liquidity of the trading instrument by examining charts on lower timeframes, the order book, and the transaction tape in the terminal. It's also advisable to work with such pairs only if there is noticeable activity in the instruments.
The Best Crypto Arbitrage Screeners
CScalp has created a guide for what we consider to be the best crypto arbitrage screeners available. Let's take a deeper look at them and discuss their main features.
P2P.Army
The P2P.Army crypto arbitrage screener is designed for P2P arbitrage on Binance, Bybit, and Huobi exchanges. Pairs are tracked for cryptocurrencies such as USDT, BTC, BUSD, BNB, ETH, and SHIB.
P2P.Army also supports fiat currencies, including USD, EUR, RUB, UAH, and TRY. Users can choose pairs in two or three steps. There is even an arbitrage calculator. The service also provides analytics on exchange rates and individual users on Binance P2P.
P2P.Army cost: There are two subscription plans – Standard and Premium. Subscription costs start at 99 USDT per month. Only a summary of exchange rates is available for free.
ArbitrageScanner
ArbitrageScanner is a comprehensive cryptocurrency arbitrage screener that spans both centralized and decentralized exchanges. It covers over 70 centralized exchanges (CEX) and more than 30 decentralized exchanges (DEX) across 10 blockchains, including Ethereum, BNB Chain, and Polygon.
The platform's unique support for cross-chain arbitrage empowers users to exploit price variations between different blockchain networks, potentially yielding more significant profit margins. Its customizable filtering feature allows users to define criteria and receive personalized notifications.
Subscription plans, ranging from $69 to $199 per month, cater to diverse needs. With support for various DEX and major centralized exchanges like Binance, Bybit, and Coinbase, ArbitrageScanner is a versatile tool for traders seeking arbitrage opportunities across different crypto assets and platforms. This crypto arbitrage screener also provides complimentary learning resources for those interested in mastering the intricacies of this trading strategy.
Alphador.ai
Alphador.ai is an innovative platform that offers an array of advanced analytical and trading tools tailored for crypto traders. Its standout feature is the arbitrage scanner, engineered to search for and identify profitable trading opportunities across multiple exchanges.
The Alphador arbitrage scanner operates in two distinct modes: CEX-CEX and CEX-DEX. This dual-mode capability allows it to scan for price differentials not only between centralized exchanges (CEX) but also between centralized and decentralized exchanges (DEX). The scanner uncovers 3-4 potential arbitrage opportunities daily.
Beyond the arbitrage scanner, Alphador.ai enriches the trading experience with features like wallet tracking, DEX trading bots, price alerts, and event tracking.
Algory.io
Algory is a tool designed for active cryptocurrency traders, featuring an advanced crypto scanner and a cryptocurrency news aggregator as its main products. The platform's screener is a powerful feature, providing traders with the capability to scan market data from 18 different cryptocurrency exchanges.
One of the unique aspects of Algory's cryptoscanner is its real-time functionality. It allows traders to find relevant opportunities. The scanner is also fully customizable, enabling traders to create their scanner windows based on more than 100 different alerts and filters.
Overall, Algory offers a multifunctional, actionable, and insightful set of tools for individual crypto traders. Its crypto scanner and news aggregator provide an edge in trading by analyzing data much faster than manually possible, scanning and filtering data for accurate trading signals, and delivering all services in real time.
Bitsgap
Bitsgap has become a standout automated cryptocurrency trading tool, offered at $23 per month. It's accessible on desktop and mobile, connecting users to major exchanges like Binance and Coinbase. The platform's centerpiece is its advanced arbitrage screener, which is capable of analyzing over 10,000 crypto pairs. This screener is designed to detect and highlight profitable arbitrage opportunities by identifying price discrepancies across various exchanges. It enables traders to capitalize on these gaps, thereby maximizing their potential gains.
Beyond arbitrage, Bitsgap simplifies trading with customizable settings, including a range of technical indicators such as Bollinger Bands and MACD. These features assist users in making informed decisions about entry and exit points in their trades.
Crypto Arbitrage Screeners – Conclusion
Crypto arbitrage screeners are in high demand. Due to the activity of exchange bots and arbitrage "whales," finding arbitrage opportunities can be challenging. Nevertheless, arbitrage trading is possible and is unlikely to lose its relevance anytime soon.
Arbitrage traders are essential to exchanges, as their actions help balance market prices. However, deriving real benefits from arbitrage is only feasible when engaging in it full-time.
With that said, the choice of specific tools to discover optimal arbitrage opportunities is crucial. If you're interested in learning more about the types of arbitrage and their functioning, we recommend checking out CScalp's blog.
Related article: Binance Arbitrage: How Does it Work?
