Over the past decade, cryptocurrencies have become widespread and important tools in the global economy. The question of what cryptocurrency arbitrage will be like in 2024 is of interest to many investors and traders.

Let’s imagine that this year has already arrived, and let’s try to predict what changes may occur in this area.

Integration of cryptocurrencies into the global economy

Large companies and financial institutions are already actively implementing blockchain technologies and considering cryptocurrencies as an alternative asset. This means that in the future, cryptocurrency arbitrage may become even more attractive to investors as trading volumes grow and, consequently, profit opportunities.

Regulation of cryptocurrencies and arbitrage

In recent years, many countries have been developing and implementing their own rules and regulations related to cryptocurrencies. In 2024, regulation is expected to become even stricter and more transparent. This may affect arbitration, as some countries may impose restrictions on cryptocurrency trading or tax arbitration transactions. However, given the gradual recognition of cryptocurrencies in the global community, it is likely that most countries will take regulatory measures to promote the development and protection of investors’ interests.

Development of technological tools for cryptocurrency arbitrage

Automated trading bots and algorithms are already being used to execute trading operations. In the future, new innovative tools may appear that will help traders better analyze the market and make more effective decisions.

Cryptocurrency arbitrage schemes in 2023-2024

In this section, we will present popular crypto arbitrage strategies and methods used by traders. With sufficient experience and desire, each of these schemes can be modified and adapted to your own needs, but at the initial stage, it is recommended to use already proven methods.

Playing on the interbank spread

This strategy is to sell cryptocurrency at a higher rate on one exchange and buy it at a lower rate on another exchange. This is one of the simplest arbitrage schemes, but it can be inefficient due to the rarely occurring differences in rates for large cryptocurrencies. Traders have to stay vigilant and wait for suitable opportunities, or use less popular assets.
In 2023, arbitrage between different exchanges remains relevant, as there are many players with high liquidity on the market, and new projects in the field of cryptocurrency trading are constantly emerging.

Inter-exchange arbitrage

This method is also known as synthetic arbitrage and is used when the quotes of the same cryptocurrency differ on the same exchange. Here, an exchange triangle is created and traders use an intermediate cryptocurrency. For example

• Trader buys BTC for USDT.
• Then exchanges BTC for ETH.
• And finally, selling ETH for USDT.

This strategy is more complicated for beginners, and that’s why many traders use specialized websites or bots to perform these operations.

Exchange deposits

If you have a cryptocurrency on one exchange, such as USDT, and another cryptocurrency on another exchange, such as BTC, you can use this strategy. If the BTC rate on the second exchange grows and differs from the rate on the first exchange by an amount greater than the commission, the trader can buy BTC on the first exchange at a lower price and sell it on the second exchange at a higher price, earning the difference.
This method works when your assets are located on different exchanges.

Statistical arbitrage

This strategy requires more expertise. It consists in finding correlations between price movements on different cryptocurrencies. For example, when the Bitcoin (BTC) exchange rate is rising, prices for altcoins can fall and vice versa. A trader can buy BTC when its rate is falling compared to ETH and sell BTC when ETH has risen, increasing the amount of BTC.
This strategy is more complicated for beginners and it is recommended to start with simpler methods.

Choice of exchange and selection of cryptocurrencies

Choosing the right cryptocurrency exchange is an important step in the process of getting ready for crypto arbitrage. The success of your transaction will depend on how quickly you can execute the cryptocurrency exchange, and this directly affects your potential income. If the process of withdrawing funds from a crypto exchange takes a long time, it can cause significant changes in the cryptocurrency rate, which in turn can lead to losses or even negative financial consequences.

Here is a list of some of the largest and most reliable crypto exchanges with high liquidity that are recommended to be considered when choosing to conduct crypto arbitrage, according to CoinMarketCap’s rating:

1. Binance;
2. Coinbase Exchange;
3. Kraken;
4. KuCoin;
5. ByBit;
6. OKX;
7. Bitstamp;
8. Gate.io;
9. Bitfinex;
10. Gemini.

We would like to note that you can use both local and international crypto exchanges to conduct crypto arbitration in Ukraine, depending on your own preferences and needs.

Tools (software) for crypto arbitration

In order to perform crypto arbitrage more efficiently, traders often use various auxiliary programs that help automate the monitoring and trading process. Here are some of these tools:

• Scanners: Cryptocurrency arbitrage scanners monitor the rates on different exchanges and identify those pairs where prices are drastically different. Some scanners also provide the ability to trade and withdraw funds through an API, which simplifies and speeds up the process for traders. They are especially useful during inter-exchange arbitrage of cryptocurrencies.
• Trading bots for crypto arbitrage: Arbitrage bots not only detect the difference in rates between different exchanges, but can also execute trades automatically without trader involvement. They react much faster than humans and can work around the clock, which increases potential income. However, setting up such a bot for cryptocurrency inter-exchange arbitrage requires certain skills, and it can be difficult for beginners to properly configure the parameters for automated work.
• Tools for comparing rates: These are simple tools that allow you to track cryptocurrency rates and find the best pairs for arbitrage. They are especially useful for beginners as they save time needed to execute trades by being able to identify profitable opportunities instantly.