Bitcoin cross exchange trading
Without going into technicalities, this is a process that takes around 10 minutes to complete. Most exchanges require 6 confirmations before allowing you to use newly transferred funds. If you're executing arbitrage, you'll need to wait an hour before selling the same bitcoin on the other market. As you can see in the hypothetical timeline above, an extra hour can eliminate any arbitrage available. By keeping a small balance of Bitcoin in the larger exchange, you can take advantage of immediate arbitrage.
If you're trading 0. After an hour, your 0. If you want to be able to conduct arbitrage more than once per hour, just keep a little extra funds in the more expensive exchange. You have to account for transaction fees when determining whether to conduct arbitrage. Most exchanges have a transaction fee of 0.
This fee gets taken twice because it happens for each exchange. In the above arbitrage example, the fees would look like this:. Arbitrage is absolutely still possible with fees, you just have to account for them when calculating profit levels. Arbitrage is available to more than just hedge funds and high frequency traders. If you have some programming skills, there are tons of open source arbitrage libraries out there that you can play with. I wrote one in Ruby! I'm also crowdfunding a course on creating your own bitcoin arbitrage bot, no programming skills required!
Everything you need to know about Bitcoin arbitrage posted over 4 years ago - 3 min read Bitcoin interest has been growing lately, and with that comes volatility. Before I get into details of Bitcoin arbitrage, lets get this out of the way: An example Imagine something fantastic happens to the value of Bitcoin. Imagine this hypothetical timeline: Complexities Blockchain confirmation One point of confusion is the delay between exchanges during a Bitcoin transfer.
You can get around this limitation! This is a bit different from traditional exchanges, where you must deposit fiat money in your exchange account before placing a buy order.
GDAX, an extension of Coinbase, functions as a traditional exchange offering a real-time marketplace for trading the same four coins as mentioned above. However, being more of the tradional exchange that it is, traders may swap their Bitcoin for other coins.
For example, you have the option to trade your Bitcoin for Ethereum and vice versa. Beginners who need a simple platform for buying and selling. Day traders who are looking for serious technical analysis tools and a large selection of coin pairs to trade between.
Limit, stop limit AND margin trading Transaction fees: Yet another of the most popular exchanges worldwide, Poloniex is a solid and reputable choice for traders looking for a decent selection of altcoins.
A major advantage of Poloniex is the ability to trade on margin , giving seasoned traders the option to short coins. Although there are only a handful of coins available for margin trading, this is a very welcome feature that seems to be pretty rare to find in the current state of crypto exchanges. Like many of the others, the Poloniex UI does not offer much in the realm of advanced technical analysis tools, but overall is a great interface that provides tons of useful information without seeming too cluttered.
Traders who are looking to margin trade. Traders who are looking for access to the largest number of altcoins. Market, limit AND margin trading Transaction fees: Kraken is a San Francisco-based exchange that sees the highest volume among European traders. It boasts some perhaps one of the most complete set of perks with fiat support, a few altcoins, and margin trading. The only issue is the Kraken UI. Traders looking for complete-set of features.
Traders looking for simple user interface or large altcoin selection. Bittrex is another US based exchange, with usage all across the world. This exchange puts a lot of focus on supporting as many altcoins as possible, including very new and emerging ones. Currently, they support over coins. A common complaint with Bittrex is high transaction fees currently at 0. The UI is pretty good and gives a fairly high number of technical analysis tools for those who are interested.
Traders who are looking for access to as many altcoins as possible. Traders looking to minimize fees. A Hong Kong based exchange, Binance is another very popular choice across the globe. With recent news that China has banned cryptocurrency exchanges , there is reason to be weary, however Binance is registered outside of China and so is not currently subject to this ban.
This has helped Binance to keep a very low transaction fee of 0. The goal is to help other pre-ICO blockchain startups achieve their goals. Fiat money can not be used on Binnace so you will need to have purchased Bitcoin, etc. On the other hand, there are tons of altcoins available with trading pairs for the aforementioned Binance coin, Bitcoin, Ethereum and Tether.
Those just getting started will find the Basic view to be simple enough, while the Advanced view provides some tools for more experienced uses to do some basic technical analysis. Traders looking for unique platform with a broad selection of coins and low fees.
Those who do not want to worry about keeping an eye on Chinese cryptocurrency regulations. Market, limit, stop limit, trailing stop AND margin trading Transaction fees: Bitfinex is perhaps the most professional exchanges out there right now. Although Bitfinex seems to take security very seriously, a hack is something to take note of. Having no hiccups to speak of since that attack, Bitfinex has done well to bounce back.
For those willing to wait in line for a Bitfinex account and look past the security breach, you will be getting a feature-rich platform. Perhaps the best set of order types out there, including a trailing stop loss, as well as fiat support and margin trading, experienced traders should be satisfied. Another great and unique feature of Bitfinex is a customizable interface and in browser notifications. Serious traders looking for top-notch features.
Those not interested in doing much trading or traders who are looking for a large altcoin selection. Yes KRW only Altcoin support: Market, limit Transaction fees: Bithumb regularly sits among the leaders in trading volume despite being an exchange exclusively for Koreans or at least those using the South Korean Won as their currency.
It offers fiat support for a dozen of the biggest coins in regards to market cap , making it one of the few places where you can trade straight between your base fiat currency and coins like Ripple and Monero.
The Bithumb UI is very simple, yet effective for getting your hands on some of the most popular cryptocurrencies. Those with access to the Korean Won and looking for an easy place to trade it for popular cryptocurrencies.
Anyone without access to Korean currency or anyone looking to day trade. Shapeshift of the most unique exchanges out there. It stays with the nature of cryptocurrencies by decentralizing the trading process. In other words users need no account in order to swap their Bitcoin for Ethereum.
With no fiat support, but a low practically nonexistent barrier of entry to a pretty large selection of altcoins, Shapeshift has continued to grow as a popular exchange among traders. Another promising development from the Shapeshift team, Prism , currently sits in closed beta and has attracted a lot of interest among crypto investors. Traders looking for a quick and decentralized way of swapping between cryptocurrencies.
This exchange supports a lot of altcoins including recent ICOs and emerging cryptocurrencies. Currently, they support over 50 coins.