If you’re reading this, it’s highly likely that you have an interest in cryptocurrency trading. By now, virtually everyone knows that crypto is a volatile digital currency that constantly fluctuates in highs and lows.
While that may make it seem riskier than other financial markets, it also provides bigger gains when you play it right.
One of the most popular ways to offset risk is to use trading bots, but to be more specific, the best crypto arbitrage bots.
There is much to learn about taking advantage of the arbitrage strategy for trading in crypto.
We will dig into the best crypto arbitrage bots that can help you to mitigate the risks more effectively than trying to do it on your own.
Best Crypto Arbitrage Bots 2022
Pionex is an exchange that offers built-in cryptocurrency trading bots.
Pionex also offers low fees, as evidenced by the 0.05% costs of their total arbitrage package. Did we tell you that the bot is free to use?
Pionex’s cryptocurrency arbitrage bot lets you perform spot-futures trades between Huobi and Binance. The Binance broker resource is what drives this type of trading.
If you aren’t aware of what spot-futures trading entails, it’s a strategy where you hold a short position within the perpetual futures crypto market, and yet you maintain the same stance in the spot market while executing crypto arbitrage trades with market-neutral positioning.
That is the definition of spot-futures arbitrage.
You also get paid every 8 hours on this exchange. If you are seeking an affordable, yet high yield crypto arbitrage bot, Pionex may be a good place for you.
Coinrule is known to work with the top 10 most popular cryptocurrency exchanges and offers military-grade encryption and security.
According to its users, it is an intuitive, yet simple system to set up and use.
When using this crypto arbitrage bot, you won’t need to know how to code. You can build your strategy without any coding experience.
You can partake in trading on Binance, Coinbase Pro, Kraken, Poloniex, BitMEX, and others.
This bot is free to use and offers 24/7 trades, market indicators, custom rules settings, real-time customer service, and many other features that make it popular among its existing users.
You may also opt for the paid plans. Coinrule is best known for its largest array of preset trading strategies, including arbitrage.
You should know that this company is constantly adding more templates, strategies, and information regarding cryptocurrencies to its site.
If you are new to crypto arbitrage trading, you will find the one-on-one trading tutorials and lessons to be a big help.
Hands down, Bitsgap is probably one of the most popular of crypto arbitrage trading bots in the industry.
This is a cloud-based system that offers ease of navigation, easy to use interface, and ample options for using arbitrage as your trading strategy,
It supports OKEX, Binance, Coinbase, Kraken, Huobi, and around 25 more cryptocurrency exchanges.,
Plus, Bitsgap offers a large collection of cryptocurrencies as well as fiat currencies with which to trade.
For arbitrage trades, you must first deposit fiat cash into one exchange and crypto-assets on another. You can trade using thousands of pairs like ETH/USD and EOS/EUR.
You should know that on Bitsgap, your arbitrage deals are figured based on your account balance. Your fees will be set by your cryptocurrency exchanges, and are included with the profit.
You can execute an arbitrage trade with only one click, a little perk from the AI-driven system.
All arbitrage is noncustodial, so the funds belong to you and are stored securely within the exchange, which is accessed via unique API keys.
Bitsgap pricing structure is pretty affordable and suitable for almost any trader skill.
Cryptohopper is a registered crypto trading bot in the Netherlands that is known for being one of the most effective and seamless in the industry.
Through its user-friendly interface, you will have access to trading indicators used by the most experienced traders.
When it comes to the arbitrage trading strategy, Cryptohopper seems to take this strategy to the next level.
You can use this bot to make profits between multiple trading pairs on the same exchange. This is a complex, triangular strategy for cryptocurrency arbitrage.
This platform also allows you to profit from Exchange Arbitrage, where the bot seeks for opportunities across multiple exchanges without sending an asset from one exchange to another.
One of the most appealing solutions for novice crypto traders is that they can join the marketplace to learn from the pros who share their successful trading templates, so others can also prosper.
The only drawback that might hinder a person from using this bot is the pricing. However, you get what you pay for.
The HaasBot bot platform was created in 2014, so it’s been around for some time now. This system is an automated trading service that provides ways for traders to make trades across multiple digital coins.
Since we are focusing on the arbitrage crypto trading strategy, you can use this platform to set your buying and selling limits, as well as other elements of your crypto arbitrage trading strategy.
HaasBot’s Inter-Exchange Arbitrage Bot is what allows you to profit from the price differences that occur across exchanges.
You will also find that you have access to the inter-market price spread ticker, so you can monitor multiple price movements across several exchanges.
There is no trial version for HaasBot, and there is a learning curve involved in using it, but there are also comprehensive video tutorials to help walk you through or guide you to the best arbitrage trading experience in the cryptocurrency realm.
What is Crypto Arbitrage?
Cryptocurrency arbitrage is where one buys digital coins on one exchange to sell the coins on another. The goal of the arbitrage strategy is to profit from the difference in exchange values placed on said coins.
This is a relatively simple strategy in comparison to some other strategies that require a lot of technical analysis.
It’s one of the best strategies for the cryptocurrency markets because it is well-suited to markets that are highly volatile.
What are the Risks of Crypto Arbitrage?
Crypto arbitrage strategies do come with a few risks, just like any trading strategy. The primary risks involve slippage and price movement.
Slippage occurs between the moment you begin your trade to the final transaction. It relates to how much the price of the digital asset changed since you started the trade process.
While the amount may appear to be insignificant, every cent counts in the crypto trading market. Remember, you are trading within exponentially tight margins when you engage in crypto arbitrage.
Also, since the small digital coins often have issues with liquidity, you could end up gaining less or playing more than you want.
Price movement is technically associated with the volatile nature of digital assets. It can be a two-edged sword in this case.
While you can find more than enough opportunities for making profits with arbitrage, you can also lose it all very quickly, resulting in losses that reduce your digital assets.
Price movement is most common when using this strategy for trading in the smaller crypto due to the higher volatility.
Finally, you have fees associated with each cryptocurrency trade you make. Fees are attached to trades, deposits, withdrawals, etc.
When you are using the crypto arbitrage trading strategy, your margins will be small, therefore, it’s imperative that you factor fees into your trades.
For instance, you decide to buy a coin on one exchange that looks like you can sell on another one at a 1% profit.
Now, let’s say that each exchange you’re using has a 0.3% fee. You have just lost around 60% of the profits you planned to get from this trade.
You are likely to lose even more if you’re trading on an exchange where you pay withdrawal and deposit fees.
Now you have a basic idea of what cryptocurrency arbitrage is, how it works, and the pitfalls and advantages that come with this crypto trading strategy.
Cryptocurrency Arbitrage Trading Selection
What’s the best way to choose an arbitrage Bot for crypto? Most crypto trading arbitrage bots offer competitive features, pricing, and strategies.
That is what makes it such a challenge to choose one for your needs. The following will help you with the process of choosing crypto arbitrage bots.
The Safety of Your Funds/Assets
A reputable trading bot will offer private, unique API keys for whatever exchanges you use. You can further protect yourself by disabling withdrawal access before sharing your API keys.
Exchanges Supported By the Crypto Arbitrage Bot
It stands to reason that when a crypto arbitrage bot supports multiple exchanges, that you will enjoy a higher level of opportunities across the leading cryptocurrency exchanges.
For example, Bitsgap supports more than 25 exchanges, and Cryptohopper supports about 14 exchanges.
Bitsgap supports some of the biggest names in exchanges including Coinbase Pro, Binance, Kraken, and others.
Cryptohopper supports BlackBird, Bittrex, HitBTC, Bitfinex, and others. Therefore, much of your decision will be based on whether a bot supports your exchanges.
Price Justification of Crypto Arbitrage
Pricing is imperative in regard to bot selection. The arbitrage bot should fit into your budget. More importantly, the crypto arbitrage bot should substantiate the value of what you’re getting for the price you pay.
For instance, while Bitsgap and Cryptohopper both come with higher pricing, both offer value in the features and strategies offered,
The Ease of Use
Let’s face it, some of these crypto arbitrage bots are easy to use, while others come with more complex systems that may require coding knowledge.
The easy-to-use bots sometimes allow some coding for bot creation and customization, but they also offer options for those without coding skills.
The Crypto Arbitrage Bot’s Community
Does the arbitrage bot you’re looking at have a solid and good-sized community? An active community is a helpful community that helps with issues and concerns along your crypto arbitrage trading journey.
Telegram, Twitter, and Facebook are often social platforms where bot community members congregate and discuss all things crypto trading bots.
Besides the information contained in this review article, it may help you to know that cryptocurrency arbitrage bots are legal to use. This is a legitimate method of trading digital assets.
You will see this kind of trading happening across all financial trading markets. The idea of buying low to sell high is not new. It’s an age-old tradition.
Also, bot usage is not uncommon across trading markets, as they are used for reducing risk and for improving your chances of profits. The arbitrage trading strategy can also be quite profitable when your strategy is effective.
The bot you choose for this form of trading should be incredibly fast due to the short timeframes involved in cryptocurrency pricing.
This happens because the market is volatile, and the pricing is constantly in flux. You have only a few seconds for the arbitrage to be profitable.
Backtesting is an efficient way to find out if your arbitrage strategy will work and if the bot is quick enough. Be sure to use small test amounts before you submit more funds. The strategies of cryptocurrency arbitrage trading are quickly and literally becoming more popular every single day.
All you need is the desire to turn profits quickly through ample opportunities and to be able to quickly execute them with the lowest costs and fees available and the highest rate of return in profits.
Any of the aforementioned best crypto arbitrage bots can help you take full advantage of the many arbitrage opportunities within the cryptocurrency markets.
If you choose wisely, you will successfully make gains and lower your risks for losses.