Cryptocurrency Arbitrage (Tips Needed to Start Crypto Arbitrage Business in Nigeria)

Actually, this cryptocurrency arbitrage article isn't for Nigerians only, everyone can benefits from it.

Cryptocurrency in Africa is becoming popular and more site have started accepting crypto as mode of payment. Moreso, this has contributed of the increase in popularity of the format and in a country where jobs are not readily available, this has provided lots of opportunities to Nigerians including Cryptocurrency Arbitrage.

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Cryptocurrency has liberated a lots of Nigerians, starting from buying and selling of coins to exchange of cryptocurrencies with giftcard. Now, the new one is crypto arbitrage which are not well-known by people in the country, however, actually pays alots. Without much Ado, let's get started.

What is Cryptocurrency Arbitrage?

Crypto arbitrage is a system where by buying and selling cryptocurrencies such as Ethereum, Tether, Bitcoin, USDT etc for profit using price differences from different source.

In a simple definition, cryptocurrency arbitrage is a business model where by you buy cryptocurrencies from one source at cheaper price or rate and sell it to another source for profit.

Crypto Arbitrage is one of the numerous ways to make money online from cryptocurrency. This idea is very simple but the truth of the matter is that - as with any cryptocurrency related businesess, it always have it risk and required expertness for you to be successful as a trader. However, you might find yourself in an occuring huge losses when carrying out arbitrage.

Investors usually note price difference in different exchanges and try to capitalize on it in other to gain from it. Now take for instance, BTC is being sold in Exchange A for $2, while in Exchange B, it's being sold for $3, you can decide to buy from Exchange A and sell it to Exchange B to make $1 profit.

What is Cryptocurrency Arbitrage Business?

Crypto arbitrage business is a type of crypto trading and business model whereby investors spotlight, analyse and capitalize cryptocurrencies price differences among crypto exchanges it to make a profit.

This simply involves buying of one particular coin in one exchange and sell it high to another exchange just to make profit.

An example of how crypto arbitrage works has been given above. This business model isn't new in the crypto global space - it was the secret to the early success of the crypto investor - Billionaire Sam Bankman-Fried. After his success stories with crypto arbitrage trading, he decided to create the world's one of the largest and fastest-growing cryptocurrency exchange called FTX.

Crypto Arbitrage Trading Strategies to Make Profit

Here are some strategies you can use to make more profits than losses when carrying out cryptocurrency arbitrage trading:

Basic Crypto Arbitrage Trading

This is the normal arbitrage trading that traders make use of on a daily basis - which involves buying and selling of coins from one exchange to another exchange in order to make money or gain.

Decentralized Crypto Arbitrage Trading

This trading strategy is the using of decentralized apps and most time smart contracts to discover the prices of crypto trading pairs.

This strategy is mostly used at automated market makers AMMs and decentralized exchanges to automatically discover coins price among trading pairs.

Triangular Crypto Arbitrage Trading

This strategy involves exchanging of three (3) coins in the same crypto exchanging platform. For example, you can trade ETH, BTC and one stable coin such as BUSD or USDT at the same time in one exchange for more profit.

Statistical Crypto Arbitrage Trading

This is an arbitrage trading strategy that involves the use of computational, statistical, and econometric techniques to carry out arbitrage trades. Trading robots and mathematical models are the major utilities needed to carry out this type of trade.

Requirements to start crypto arbitrage business in Nigeria

Arbitrage trading depends on many factors, tools and requirements for one to be successful in the business. To get started with crypto arbitrage trading, these factors are to be considered:

Crypto P2P Exchanges

First thing first, to start any form of crypto arbitrage trading in Nigeria or anywhere, you will need P2P exchanges to process the arbitrage business model early - buying and selling of crypto early.

You'll need to find P2P exchanges that have favourable rates where you can buy at low price and sell at a profitable or high price. I'm not going to recommend any exchanges in this article. However, you can do your research and know which ones are best for you.

Stable Coins (BUSD or USDT)

As one of the things needed, stable coin is among them. The stable coin is used to hold your profits after arbitrage so that it won't lose values.

There are many stable coins out there, the most popular ones are USDT and BUSD, which you will need any one of them to carryout your crypto arbitrage business.

Stable coin helps to keep profits safe from crypto volatile that may cause huge losses. For example, if you made $50 from bitcoin arbitrage trading, you will then convert or exchange it to a stable coin to make sure that it doesn't lose values.

How to become a successful trader in crypto arbitrage business?

To be successful and to run crypto arbitrage trading business successfully, here are things you should look out for or have at the back of your mind:

Find opportunities

To become a successful trader in crypto arbitrage business, you must know how to look-out for opportunities and how to be calculative. The more opportunities your finds, the more chance you have to make profits.

Validate the opportunities

After you've look out for opportunities and you found it, you will need to validate it, to make sure that the opportunity worth it or not. Jumping at every opportunity without checking if it is worth the time and resources you willing to dedicate will only lead to more losses than profits.

You will need to look out for charges and fees involves such as transactions fees, network fees, wallet fees and others fees. Proceed with the trading only when you've calculated these costs and they meet your expectations.

Be Time Sensitive

Like one of my boss always say that "time is money". I think this adage is applicable to crypto arbitrage traders. As we all know that cryptocurrencies are volatile and their price can change at any time, even at exchange. 

So be time sensitive and always learn how to act fast, never misused opportunities and at the same time, always validate every opportunity to avoid unnecessary losses.

I hope you find this article interesting and helpful? Do more by sharing this article anywhere in the world. Thanks for reading, cheers!